Enhancing the effectiveness of state capital representatives at the enterprises

Enhancing the effectiveness of state capital representatives at the enterprises

On 30^th September2016, in Ho Chi Minh City, the State Capital Investment Corporation (SCIC) held a meetin for state representatives at enterprises. This is an annual conference organized by SCIC with the participation of SCIC’s representatives in nearly 200 enterprises of portfolio companies.

Understanding the important role of state representatives, since the establishment (2006), along with classifying the taken-over enterprises into groups according to industrial performance, geographical area, proportion of the state capital, production and business situation ..., SCIC has quickly connected and built data systems on the dedicated representatives at the enterprise. According to the data received, the representative system is classified to create a favorable condistion for SCIC to support in a timely manner.

SCIC is the first corporation issued Regulation for the State Representatives at enterprises in a systematic and logical way on the rights, responsibilities and coordination mechanisms between the representatives and SCIC. Over the past 10 years, this Regulation has been repeatedly revised, amended, and now contained all working areas of the state capital representatives. This Regulation has been concerned and referred by many corporations and government agencies.

The SCIC’s State Representative at enterprises are combined between SCIC’s staffs and enterprise’s staffs to strengthen the effectiveness of coordination between SCIC and the representatives, between the representatives and the managements, between SCIC shareholders and enterprises. Based on each company’s situation, SCIC sends representatives to executive position of enterprises as Chairman, General Director, Deputy General Director ... When considering a representative to be in executive board, SCIC usually choose officials who are working at the enterprise. SCIC’s staffs are appointed as the position of chairman or dispatched directly in the BOD only in companies working in difficulties and complexity conditions or in companies that the State intends to hold capital for long-time or need of restructuring to enhance the corporate’s value as well as ensure the successful and high efficient divestments.

In recent years, as a shareholder, SCIC regularly support to improve the corporate governance in state enterprises by organizing seminars and training courses for the representatives, leaders of enterprises; and SCIC is now trying to apply the advanced corporate governance into state enterprises’ operation.

Within in the framework of State representative meeting this year, SCIC held a workshop named "Embracing advanced corporate governance in state-invested enterprises." The workshop aims to share experiences in corporate governance, promote the advanced corporate standards in conformity with the Vietnamese enterprises’ characteristics, approaching to international standards and practical experience in state capital restructuring

At the Representative meeting this year, within the framework of cooperation projects with the International Cooperation Agency of Japan (JICA), the SCIC has completed and circulated the "Voting guideline" for the SCIC’s Representatives. Along with the regulation for Representatives, Voting Guideline represents how representatives make a decision on issues in the Annual General Meeting and the BOD meeting based on international advanced corporate governance practice. After the first publication, the draft of voting guidelines has received many positive feedbacks from the state representatives. The material then was under pilot project during the shareholders meeting in April 2016 and continued to be revised annually to be practical and updated with changes in Vietnam's economic situation.

Besides, JICA also supports SCIC to build “The Corporate governance code" used for investment management staffs and "The key risk indicators" for new investment activities of the SCIC. Along with the Voting guidelines, all documents will improve the effectiveness of capital management in the enterprise, so that promote the performance of enterprises, and increase corporate value. This is also the SCIC's efforts to become a pioneer in introducing international advanced corporate governance standards to portfolio companies, and enhance the capacity for SCIC to ensure the successful implementation in the progress of receiving and restructuring taken-over corporation, which is the mission assigned by the Government.

Mr. Nguyen Duc Chi, Chairman of SCIC said “during the previous time, theRepresentatives have cooperated effectively with SCIC, reflected the role of an active shareholder, contributed to improve the efficiency of capital investments, preservation and development the state capital in enterprises. In order to enhance the effectiveness of Representatives mission, in the near future, SCIC will continue to strengthen the network of representative andimprove the liability and the quality of representative’smission in state enterprises. "

Featured at the seminar:

- Video 1

- Video 2

- Video 3

- Video 4