What conditions must be met to be appointed as a Director of a State-owned enterprise?

Pursuant to Article 101 of the Law on Enterprises 2020 Regulations on conditions and standards of Directors of State-owned enterprises are as follows:

Standards and conditions of Director and General Director
1. Not subject to the provisions of Clause 2, Article 17 of this Law.
2. Have professional qualifications and experience in business administration or in the company’s field, industry or business.
3. Not be a person related to the family of the head or deputy of the head of the owner’s representative agency; Member of the Board of Members, Chairman of the company; Deputy General Director, Deputy Director and Chief Accountant of the company; Company controller.
4. Never been dismissed as Chairman of the Board of Members, member of the Board of Members, President of the company, Director or General Director, Deputy Director or Deputy General Director at the company or at another state-owned enterprise.
5. Must not concurrently be Director or General Director of another enterprise.
6. Other standards and conditions specified in the company charter.

Thus, directors of state-owned enterprises need to meet the following conditions to be eligible for appointment, specifically including:

– Not subject to the right to establish and manage a business in Vietnam;

– Have professional qualifications and experience in business administration or in the field, industry or business of a state-owned enterprise.

– Must not be a person related to the family of the head, deputy head of the owner’s representative agency, member of the Board of Members, President of the company, Deputy General Director, Deputy Director, Chief Accountant, or Controller of the company.

– Have never been dismissed as Chairman of the Board of Members, member of the Board of Members, President of the company, Director or General Director, Deputy Director or Deputy General Director at the company or at another state-owned enterprise.

– Do not concurrently be Director or General Director of another enterprise.

– Meet other standards and conditions as prescribed in the company Charter.

In what cases will the Director of a State-owned enterprise be dismissed?

Pursuant to Clause 1, Article 102 of the Law on Enterprises 2020 Regulations on dismissal of directors of state-owned enterprises are as follows:

Removal and dismissal of the Director, General Director and other managers of the company, Chief Accountant
1. The Director or General Director is dismissed in the following cases:
a) No longer meets the standards and conditions prescribed in Article 101 of this Law;
b) There is an application for resignation.

Thus, the director of a State-owned enterprise will be dismissed if he no longer meets the conditions and standards to be a director according to regulations. In addition, in case the director of a State-owned enterprise requests resignation, he/she will also be dismissed.

In addition, within 60 days from the date of the decision to dismiss the director of the State-owned enterprise, the Board of Members or the Chairman of the company shall consider and decide to select and appoint another person to replace him.

What information must State-owned enterprises holding more than 50% of charter capital periodically disclose?

Pursuant to Article 23 of Decree 47/2021/ND-CP Amended by Article 13 of Decree 16/2023/ND-CP regulating periodically disclosed information for State-owned enterprises holding more than 50% of charter capital as follows:

Regularly published information.
1. Enterprises with 100% charter capital held by the State must periodically disclose the following information:
a) Basic information about the enterprise and the company’s Charter;
b) General objectives, goals, and specific targets of the annual business plan approved by the owner’s representative agency according to the content specified in Table No. 2, Appendix II attached to this Decree; The announcement deadline is before March 31 of the year of implementation;
c) Evaluation report on the results of implementation of the annual production and business plan according to the content specified in Table No. 3, Appendix II attached to this Decree; The announcement deadline is before June 30 of the year immediately following the year of implementation;
d) Report on the results of implementation of assigned public utility tasks according to plan or bidding (if any) and other social responsibilities according to the content specified in Table No. 4, Appendix II attached to this Decree; The announcement deadline is before June 30 of the year immediately following the year of implementation;
dd) Report on the 6-month management status and organizational structure of the enterprise according to the content specified in Table No. 5, Appendix II attached to this Decree; The publication deadline is before July 31 every year;
e) Report on the current state of management and annual organizational structure of the enterprise according to the content specified in Table No. 6, Appendix II attached to this Decree; The announcement deadline is before June 30 of the year immediately following the year of implementation;
g) Report and summary of mid-year financial statements, including the parent company’s financial statements and consolidated financial statements (if any); The announcement must be made before July 31 every year;
h) Report and summary of annual financial statements audited by an independent auditing organization, including the parent company’s financial statements and consolidated financial statements (if any) according to legal regulations on corporate accounting; The announcement deadline is within 150 days from the end of the fiscal year.
2. Enterprises in which the State holds more than 50% of charter capital or total number of voting shares shall disclose information according to the provisions of Points a, c, dd, e, h, Clause 1 of this Article.

Thus, enterprises in which the State holds more than 50% of charter capital or total voting shares must disclose the following information:

– Basic information about the business and company charter;

– Before June 30 of the year immediately following the year of implementation:

+ Announcing the Evaluation Report on the results of implementing annual production and business plans;

+ Announcing the annual report on management status and organizational structure of the enterprise.

– Before July 31 every year, publish a report on the enterprise’s 6-month management status and organizational structure;

– Within 150 days from the end of the fiscal year, publish the Report and summary of annual financial statements audited by an independent audit organization, including the parent company’s financial statements and consolidated financial statements.