Regulations on control boards in joint stock companies according to Vietnamese law

1. How are the rights and obligations of the Supervisory Board regulated?

According to Article 170 of the Law on Enterprises 2020, the rights and obligations of the Supervisory Board are specified as follows:

– The Supervisory Board supervises the Board of Directors, Director or General Director in the management and operation of the company.

– Checks the reasonableness, legality, honesty and level of caution in managing and operating business activities; the systematic, consistent and appropriate nature of accounting, statistics and financial reporting.

– Appraise the completeness, legality and honesty of the company’s business situation report, annual and 6-month financial reports, management evaluation report of the Board of Directors and submit the appraisal report at the annual General Meeting of Shareholders. Review contracts and transactions with related persons under the approval authority of the Board of Directors or the General Meeting of Shareholders and make recommendations on contracts and transactions that require approval from the Board of Directors or the General Meeting of Shareholders.

– Review, test and evaluate the effectiveness and efficiency of the company’s internal control, internal audit, risk management and early warning systems company.

– Review accounting books, accounting records and other documents of the company, management and operations of the company when deemed necessary or according to the resolution of the General Meeting of Shareholders or at the request of a shareholder or group of shareholders specified in Clause 2, Article 115 of this Law.

– When requested by a shareholder or group of shareholders specified in Clause 2, Article 115 of this Law, the Inspection Committee shall carry out the inspection within 07 working days from the date of receipt of the request. Within 15 days from the date of completion of the inspection, the Supervisory Board must report on the issues required to be inspected to the Board of Directors and the requesting shareholder or group of shareholders. The inspection by the Supervisory Board specified in this Clause must not hinder the normal operations of the Board of Directors or cause disruption to the company’s business operations.

– Recommend to the Board of Directors or the General Meeting of Shareholders measures to amend, supplement and improve the organizational structure of management, supervision and administration of business activities of the company.

– When detecting that a member of the Board of Directors, Director or General Director violates the provisions of Article 165 of this Law, they must immediately notify the Board of Directors in writing, requesting the person committing the act. stop the violation and have solutions to overcome the consequences.

– Attend and participate in discussions at the General Meeting of Shareholders, the Board of Directors and other meetings of the company.

– Use independent consultants, the company’s internal audit department to perform assigned tasks.

– The Board of Supervisors can consult the opinion opinions of the Board of Directors before submitting reports, conclusions and recommendations to the General Meeting of Shareholders.

– Other rights and obligations according to the provisions of this Law, the Company’s Charter and resolutions of the General Meeting of Shareholders.

2. Is it mandatory for the Board of Supervisors in a joint stock company to have 01 person who is an accountant?

According to Article 168 of the Law on Enterprises 2020, the regulations on the Board of Supervisors are as follows:

“Article 168. Board of Supervisors

1. The Board of Supervisors has from 03 to 05 Supervisors. Term of office of Supervisors Supervisors for no more than 05 years and can be re-elected for an unlimited number of terms.

2. The Head of the Supervisory Board is elected from among the Supervisors; the rights and obligations of the Supervisory Board Head are prescribed by the Company’s Charter. More than half of the Supervisory Board Heads must have a university degree or higher majoring in economics, finance, accounting, auditing, law, business administration or majors related to the business activities of the enterprise, unless the Company Charter stipulates other higher standards.

3. In case the Controller has the same term ending and the new term Controller has not been elected, the Controller whose term has expired will continue to exercise the rights and obligations until the new term Controller is elected and accepted. tasks.”

At the same time, Article 169 of the Law on Enterprises 2020 stipulates the standards and conditions of Controllers in joint stock companies as follows:

“Article 169. Standards and conditions of Controllers

1. Controllers must have the following standards and conditions:

a) Not subject to the provisions of Clause 2, Article 17 of this Law;

b) Be trained in one of the majors in economics or finance finance, accounting, auditing, law, business administration or a major relevant to the business activities of the enterprise;

c) Not a family relative of a member of the Board of Directors, Director or General Director and other managers;

d) Not a company manager; not necessarily a shareholder or employee of the company, unless otherwise stipulated in the company’s Charter Other regulations;

dd) Other standards and conditions according to other provisions of relevant laws and the company’s Charter.

2. In addition to the standards and conditions specified in Clause 1 of this Article, the Controller of a public company or state-owned enterprise as prescribed in Point b, Clause 1, Article 88 of this Law must not be a person related to the family of the company’s business manager and the company. parent; representative of the capital of the enterprise, representative of the state capital at the parent company and at the company.”

Accordingly, for a joint stock company, there is no requirement to have 01 person who is an accountant as a member of the Supervisory Board, but only requires the head of the Supervisory Board to have a university degree or higher in one of the following majors: economics, finance, accounting, auditing, law, business administration or related major. related to the business activities of the enterprise. One of the conditions and standards of a Controller is to be trained in one of the majors in economics, finance, accounting, auditing, law, business administration or a major suitable to the business activities of the enterprise.

3. How long is a term of office for a controller in a joint stock company?

According to Clause 1, Article 168 of the Law on Enterprises 2020, it is stipulated as follows:

“Article 168. Board of Supervisors

1. The Board of Supervisors has from 03 to 05 Controllers. The term of office of a Controller does not exceed 05 years and can be re-elected for an unlimited number of terms.

[…]”

Accordingly, the term of the Supervisor is not to exceed 05 years and can be re-elected for an unlimited number of terms.