Director & General Director of State Enterprises: Standards and Removal

Regulations on the Director, General Director, Deputy Director, and Deputy General Director in State Enterprises?

Pursuant to Article 100 of the Law on Enterprises 2020 (as amended and supplemented by Law No. 76/2025/QH15, effective from 01/7/2025), regulations on the Director, General Director, Deputy Director, and Deputy General Director in State Enterprises are as follows:

(1) The Director or General Director is appointed or hired by the Members’ Council or the Company Chairperson under the personnel plan approved by the owner’s representative agency.

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(2) The Director or General Director is responsible for administering the company’s day-to-day activities and has the following rights and obligations:

– Organizing implementation and evaluating the results of implementation of the company’s business plans and options and investment plans;

– Organizing implementation and evaluating the results of implementation of resolutions and decisions of the Members’ Council, the Company Chairperson, and the owner’s representative agency;

– Deciding on the company’s day-to-day work;

– Issuing the company’s internal management regulations approved by the Members’ Council or the Company Chairperson;

– Appointing, hiring, dismissing, removing, and terminating labor contracts with respect to company managers, except positions under the authority of the Members’ Council or the Company Chairperson;

– Signing contracts and transactions in the name of the company, except cases under the authority of the Chairperson of the Members’ Council or the Company Chairperson;

– Preparing and submitting to the Members’ Council or the Company Chairperson quarterly and annual periodic reports on the results of implementation of business plan objectives; financial statements;

– Proposing the distribution and use of after-tax profits and other financial obligations of the company;

– Recruiting laborers;

– Proposing plans for company reorganization;

– Other rights and obligations as prescribed by law and the company charter.

(3) The company has one or more Deputy Directors or Deputy General Directors. The number and appointment authority of Deputy Directors or Deputy General Directors are prescribed in the company charter. The rights and obligations of Deputy Directors or Deputy General Directors are prescribed in the company charter and labor contracts.

Standards and Conditions for the Director and General Director in State Enterprises?

The standards and conditions to become a Director or General Director in a State Enterprise are prescribed in Article 101 of the Law on Enterprises 2020, specifically:

“Article 101. Standards and Conditions for the Director and General Director

1. Not falling under the subjects prescribed in Clause 2, Article 17 of this Law.

2. Having professional qualifications and experience in business administration or in the fields, lines, or trades of the company’s business.

3. Not being a family member of the head or deputy head of the owner’s representative agency; members of the Members’ Council, the Company Chairperson; the Deputy General Director, Deputy Director, and Chief Accountant of the company; company Controllers.

4. Not having previously been removed from the position of Chairperson of the Members’ Council, member of the Members’ Council, Company Chairperson, Director or General Director, Deputy Director or Deputy General Director at the company or at another state enterprise.

5. Not concurrently serving as the Director or General Director of another enterprise.

6. Other standards and conditions prescribed in the company charter.”

Accordingly, to become a Director or General Director in a State Enterprise, the following must be satisfied:

– Not falling under the subjects prescribed in Clause 2, Article 17 of this Law.

– Having professional qualifications and experience in business administration or in the fields, lines, or trades of the company’s business.

– Not being a family member of the head or deputy head of the owner’s representative agency; members of the Members’ Council, the Company Chairperson; the Deputy General Director, Deputy Director, and Chief Accountant of the company; company Controllers.

– Not having previously been removed from the position of Chairperson of the Members’ Council, member of the Members’ Council, Company Chairperson, Director or General Director, Deputy Director or Deputy General Director at the company or at another state enterprise.

– Not concurrently serving as the Director or General Director of another enterprise.

– Other standards and conditions prescribed in the company charter.

In Which Cases Are the Director, General Director, Other Company Managers, and Chief Accountant in State Enterprises Dismissed or Removed?

Pursuant to Article 102 of the Law on Enterprises 2020 on the dismissal and removal of the Director, General Director, other company managers, and Chief Accountant, specifically as follows:

(1) The Director or General Director is dismissed in the following cases:

– No longer fully satisfying the standards and conditions prescribed in Article 101 of this Law;

– Having submitted a resignation letter.

(2) The Director or General Director is considered for removal in the following cases:

– The enterprise fails to preserve capital as prescribed by law;

– The enterprise fails to complete annual business plan objectives;

– The enterprise violates the law;

– Lacking the qualifications and capacity to meet the requirements of the enterprise’s new development strategy and business plan;

– Violating one of the rights, obligations, and responsibilities of managers prescribed in Articles 97 and 100 of this Law;

– Other cases prescribed in the company charter.

(3) Within 60 days from the date of the decision on dismissal or removal, the Members’ Council or the Company Chairperson considers and decides on the selection and appointment of a replacement.

(4) Dismissal and removal of Deputy General Directors, Deputy Directors, other company managers, and Chief Accountants are governed by the company charter.