Regulations on the Board of Supervisors in a Joint Stock Company under Vietnamese Law

Short answer: Not every joint stock company (JSC) is required to have a Board of Supervisors. Under Clause 1, Article 137 of the Law on Enterprises 2020 (unchanged by Law No. 76/2025/QH15), a JSC may choose between two management models: (a) the General Meeting of Shareholders, the Board of Directors, the Board of Supervisors and the Director/General Director — where a company with fewer than 11 shareholders and organizational shareholders holding less than 50% of total shares is not required to have a Board of Supervisors; or (b) the General Meeting of Shareholders, the Board of Directors and the Director/General Director — in which case at least 20% of the members of the Board of Directors must be independent members and an Audit Committee under the Board of Directors must be established. Thus, whether a company has a Board of Supervisors depends on the model it chooses.

The Board of Supervisors is the supervisory body of a JSC, overseeing the Board of Directors and the Director/General Director in managing and operating the company. Under Article 168 of the Law on Enterprises 2020 (unchanged by Law No. 76/2025/QH15), the Board of Supervisors consists of 3 to 5 Supervisors; the term of office of a Supervisor does not exceed 5 years and Supervisors may be re-elected for an unlimited number of terms.

1. Composition of the Board of Supervisors and qualifications of Supervisors

Under Articles 168 and 169 of the Law on Enterprises 2020: the Head of the Board of Supervisors is elected by the Board of Supervisors from among the Supervisors by majority vote; the rights and obligations of the Head of the Board of Supervisors are prescribed by the company charter. More than half of the Supervisors must reside in Vietnam. The Head of the Board of Supervisors must hold a bachelor’s degree or higher in economics, finance, accounting, auditing, law, business administration or a discipline related to the company’s business operations. A Supervisor may not concurrently be a member of the Board of Directors, the Director/General Director or another manager of the same company.

2. Rights and obligations of the Board of Supervisors

Under Article 170 of the Law on Enterprises 2020, the Board of Supervisors has the following rights and obligations: supervising the Board of Directors and the Director/General Director in managing and operating the company; examining the reasonableness, legality, honesty and prudence in the management and operation of business activities, in the organization of accounting and statistics work and in the preparation of financial statements; appraising the completeness, legality and honesty of business performance reports, annual and 6-month financial statements, and the Board of Directors’ management evaluation reports; reviewing, inspecting and evaluating the effectiveness and efficiency of the internal control, internal audit, risk management and early-warning systems; examining accounting books, accounting records and other documents of the company; recommending to the Board of Directors or the General Meeting of Shareholders measures to amend, supplement and improve the organizational structure of management, supervision and business operations; and, upon detecting a violation, notifying in writing the Board of Directors, requiring the violator to cease the violation and take remedial measures.

3. Responsibilities of Supervisors

Supervisors must comply with the responsibilities of company managers (honesty, prudence, loyalty to the company’s interests) and are responsible before the law and before the General Meeting of Shareholders for performing their assigned rights and obligations. A Supervisor who violates regulations and causes damage to the company must compensate in accordance with regulations.

Notes on applying current legal provisions

This article is for reference, helping readers understand the legal issue at a general level. The company charter may prescribe in more detail the organization and operation of the Board of Supervisors. Where advice is needed, readers should contact ANT Legal’s lawyers at 0966.475.966 for verification and advice before proceeding.

Common risks to note

• Choosing the model with a Board of Supervisors but failing to establish it.
• Choosing the Audit Committee model but not meeting the 20% independent Board members ratio.
• A Supervisor concurrently serving as a company manager — violating the eligibility conditions.
• The Board of Supervisors operating nominally, without substantive supervision.
• Not meeting the residence and qualification requirements for the Head of the Board of Supervisors.

How can ANT Legal help?

ANT Legal assists with reviewing company charters, advising on the organization of the Board of Supervisors, and handling internal JSC disputes. For quick advice, you may contact our lawyers at 0966.475.966.

Frequently asked questions

Is every joint stock company required to have a Board of Supervisors?
No. Under Clause 1, Article 137 of the Law on Enterprises 2020, a company may choose the model with a Board of Supervisors or the model with an Audit Committee under the Board of Directors (with at least 20% of Board members being independent members).

How many members does the Board of Supervisors of a JSC have?
From 3 to 5 Supervisors; the term of office of a Supervisor does not exceed 5 years and Supervisors may be re-elected for an unlimited number of terms (Article 168 of the Law on Enterprises 2020).

May a Supervisor concurrently serve as the company’s Director?
No. A Supervisor may not concurrently be a member of the Board of Directors, the Director/General Director or another manager of the same company.

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