Tiếng Việt
中文Yes — the law requires public companies to formulate and promulgate Internal Regulations on Corporate Governance. Under Clause 3, Article 41 of the Securities Law 2019 (not amended by Law No. 56/2024/QH15), the corporate governance content applicable to public companies includes the Internal Regulations on Corporate Governance, while detailing the composition, structure and responsibilities of the Board of Directors.
1. Mandatory contents on the Board of Directors
Under Point b, Clause 3, Article 41 of the Securities Law 2019: (i) the structure of the Board of Directors of a public company must ensure balance between executive and non-executive members of the Board of Directors, and the number of independent members of the Board of Directors to ensure the independence of the Board of Directors; (ii) the Board of Directors must be accountable to shareholders for the company’s operations; ensure the company’s operations comply with the law, the company Charter and the company’s internal regulations; (iii) the nomination, candidacy, election, dismissal and removal of members of the Board of Directors shall be carried out as prescribed (candidate information must be published at least 10 days before the date of the General Meeting of Shareholders).
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2. Other corporate governance contents of public companies
In addition to the Internal Regulations on Corporate Governance, public companies must also: promulgate Regulations on the operation of the Board of Directors and the Board of Supervisors (or the Audit Committee); conduct information disclosure as prescribed; ensure shareholders’ rights (voting rights, access to information, dividends); organize the General Meeting of Shareholders in due order; implement internal governance and control and periodically submit corporate governance reports to the State Securities Commission.
3. Consequences when a public company fails to formulate the regulations
A public company that fails to formulate Internal Regulations on Corporate Governance or formulates them inconsistently with regulations may be subject to administrative sanctions in the securities sector (Decree 156/2020/ND-CP, as amended by Decree 128/2021/ND-CP), while affecting governance transparency, investor confidence and the ability to maintain public company status.
Notes on applying current legal regulations
The content of this article is presented for reference purposes, helping readers understand the legal issue at an overview level. The detailed contents of the Regulations are implemented in accordance with the model charter and guidance of the Ministry of Finance. Where advice is needed, you should contact an ANT Legal lawyer via 0966.475.966 for review and advice before proceeding.
Common risks to note
– Failing to formulate Internal Regulations on Corporate Governance.
– Board structure lacking independent members.
– Failing to publish Board candidate information on time.
– Failing to submit corporate governance reports to the SSC.
How can ANT Legal help?
ANT Legal assists in drafting Internal Regulations on Corporate Governance and Regulations on the Board of Directors/Board of Supervisors for public companies. For prompt advice, please contact our lawyers via 0966.475.966.
Frequently asked questions
Must public companies formulate Internal Regulations on Corporate Governance?
Yes. Under Clause 3, Article 41 of the Securities Law 2019, the corporate governance content applicable to public companies includes the Internal Regulations on Corporate Governance, while detailing the composition, structure and responsibilities of the Board of Directors.
What contents do the Internal Regulations on Corporate Governance of public companies include?
The structure of the Board of Directors ensuring balance between executive and non-executive members and the number of independent members; the accountability of the Board of Directors to shareholders; the nomination, candidacy, election, dismissal and removal of Board members (candidate information must be published at least 10 days before the date of the General Meeting of Shareholders).
How is a public company handled if it fails to formulate the regulations?
It may be subject to administrative sanctions in the securities sector (Decree 156/2020/ND-CP, as amended by Decree 128/2021/ND-CP), while affecting governance transparency, investor confidence and the ability to maintain public company status.
