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Investor Relations » Corporate Governance Regulation

Corporate Governance Regulation

 

VIETNAM NATIONAL REINSURANCE CORPORATION

 

 

CORPORATE GOVERNANCE

REGULATION

 

 

CHAPTER I

GENERAL PROVISIONS

 

Article 1. Rationale and scope of application

Corporate governance is a set of mechanism and provisions through which the Corporation is managed and controlled to ensure the best benefits of shareholders and stakeholders.

Corporate governance establishes a framework for relations between Shareholders, Board of Management (BOM), Board of Control (BOC), Board of Directors (BOD) and stakeholders of the Corporation. The principles of corporate governance lay out the processes and procedures for making execution decisions so as to minimize risk, enhance efficiency and ensure transparency.

Article 2. Definitions and interpretations

  1. The following words and expressions shall be interpreted as follows: 

Corporate Governance” means the system of rules to ensure that the Company is oriented in its management and controlled in an efficient manner for the best interests of its shareholders and stakeholders.

Corporation” means Vietnam National Reinsurance Joint Stock Corporation, having  registered office located at 141 Le Duan, Hoan Kiem District, Hanoi, and its shares listed on Hanoi Stock Exchange (HNX).  

General Meeting of Shareholders” means the highest competent authority of the Corporation having rights and responsibilities set forth in the Charter of Organisation and Operation (hereinafter referred to as “the Charter”).

Board of Management” (BOM) means the management agency and is governed by the highest standards of corporate management and administration and is responsible for managing the Corporation in the best interests of  the shareholders.  

Board of Control” (BOC) means the agency responsible for controlling the operation of the Corporation and assisting the Board of Management in managing the Corporation.  

Senior Managers” includes the positions of Chief Executive Officer (CEO), Deputy Chief Executive Officer, Chief Accountant and other managers approved by the Board of Management. The Chief Executive Officer is responsible for managing day-to-day business operation of the Corporation and reports to the Board of Management and the law for the assigned powers and obligations.

Board of Directors” (BOD), consisting of the Chief Executive Officer and Deputy Chief Executive Officers, is appointed by the Board of Management and has the functions and responsibilities as stipulated in the Charter of Organization and Operation.

Related person” means any individual or organization as provided in Article 6.34 of the Securities Law / Article 4.17 of the Enterprise Law.

Non-executive Member of Board of Management” are members of the Board of Management other than the Chief Executive Officer, Deputy Chief Executive Officer, Chief Accountant and other managers appointed by the Board of Management.

“Independent Member of Board of Management” are members of the Board of Management that satisfy the following conditions:

  • Being a non-executive member of the Board of Management and not related to the Chief Executive Officer (CEO), Deputy Chief Executive Officer (Deputy CEO), Chief Accountant and other managers appointed by the Board of Management;
  • Not being a member of the Board of Management, Director (General Director), Deputy Director (Deputy General Director) of subsidiary companies, associated companies, or companies controlled by public companies;
  • Not being a major shareholder or the representative of a major shareholder, or the related person of a major shareholder of the Corporation;
  • Not working for organizations that provide legal consulting or auditing services for the Corporation within the previous two (02) years;
  • Not being a partner of a related person of a partner who has the annual value of transaction with the Corporation accounting for thirty percent (30%) or more of the total revenue, or of the total value of goods and services purchased by the Corporation within the previous two (02) years.

 ‘Information Disclosure Policy” means the regulation on information disclosure of Vietnam National Reinsurance Corporation, issued as an attachment of Decision No. …… dated …… by the Chairman of the Board of Management.

  1. In this Regulation, references to one or some articles or legal documents will include amendments or replacement of such documents.

Article 3: Principles of corporate governance

Corporate Governance is structured to protect the interest of shareholders, to ensure transparency and risk management on the following principles:

  1. To comply with the prevailing statutoty regulations;
  2. To ensure an effective management structure;  
  3. To ensure the shareholders’ interests;
  4. To provide shareholders with fair treatment;
  5. To avoid conflict of interests with persons related to the Corporation;
  6. To be transparent in operation;
  7. The BOM and the BOD manage and control the Corporation in an efficient manner.

 


CHAPTER II

SHAREHOLDERS AND GENERAL MEETING OF SHAREHOLDERS

 

Article 4: Rights and obligations of shareholders

  1. Shareholders have all the rights and obligations as prescibed by the Law on Enterprise, the Law on Securities, related legal documents and the Charter of the Corporation, specifically:
    1. The right to transfer the shares which have been fully paid and recorded in the Corporation’s Book of Shareholders, except for the shares transfer of which is restricted by statutory regulations, the Charter of the Corporation and the decision of the General Meeting of Shareholders;
    2. The right to fair treatment: Each share of same type provides its holder with equal rights, obligations and interests. In case the Corporation issues preferrential shares, the rights and obligations associated with such preferential shares must be fully declared to shareholders and approved by the General Meeting of Shareholders;
    3. The right to be notified of periodic and irregular information about the Corporation’s operation;
    4. The right and obligation to attend the General Meeting of Shareholders and to vote on a direct or distant basis or via an authorized representative;
    5. The priority to purchase the Corporation’s new shares offered proportionally to the shares being held.
  2. Shareholders have the right to protect their lawful interests. In case the decisions made by the General Meeting of Shareholders or the Board of Management are unlawful or violate the fundamental interests of shareholders as prescribed by the law, shareholders have the right to request the cancellation of such decisions following the procedures prescribled by the law. In case such decisions cause damages to the Corporation, the Board of Management, the Board of Control and the Chief Executive Officer must compensate the Corporation within their scope of responsibility. Shareholders have the right to claim compensation from the Corporation as prescribed by the law.

Article 5: Responsibilities of major shareholders

  1. Major shareholders must not take advantage of their position to jeopardise the rights and interests of the Corporation and other shareholders.
  2. Major shareholders are responsible for disclosing information as prescribed by the law.

Article 6: Roles and responsibilities of shareholders in corporate governance

  1. Founding shareholders – shareholders who satisfy the conditions provided for in Article 13.2 of the Charter – shall be entitled to and responsible for the inward/outward reinsurance commitments with the Corporation.
  2. Nomination of BOM members: A shareholder or a group of shareholders holding between 3 - 10 per cent of voting shares for at least six consecutive months shall be entitled to nominate one member; from 10% to 15%, two members; from 15% to less than 25%, three members and from 25% and over, four members.
  3. Nomination of BOC members:  A shareholder or a group of shareholders holding from 0.5% to less than 10% of the voting shares for at least six consecutive months shall be entitled to nominate one member; from 10% to 20%, two members and from 20% and over, three members.
  4. In addition to the above-mentioned rights and obligations, a shareholder or a group of shareholders holding more than 3% of the total ordinary shares for at least six consecutive months shall have the following rights:  
  1. To request for convention of  a General Meeting of Shareholders; 

  1. To check and receive copies or extraction of the list of shareholders egligible to attend and vote at the General Meeting of Shareholders;
  2. To read and copy minutes and resolutions of BOM meetings, interim and annual financial statements prepared in the form stipulated by Vietnamese Accounting System and reports of the BOC;
  3. To request the BOC to inspect each specific issue related to the management and operation of the Corporation when deemed necessary. Such request shall be made in writing and complied with provisions of Article 79.2(d) of the Enterprise Law;
  1. Shareholders shall have other rights and obligations as provided for by the Law on Enterpise and the Charter.  

Article 7: Sequence and procedure of convening annual and extraordinary General Meeting of Shareholders

  1. The Corporation shall organize the General Meeting of Shareholders at least once a year. The annual General Meeting of Shareholders is convened within four months of the end of the fiscal year. The annual General Meeting of Shareholders cannot be held under the form of collecting written opinions.
  2. The BOM convenes an extraordinary General Meeting of Shareholders in cases stipulated in Article 15.3 of the Charter or such extraordinary General Meeting of Shareholders can be convened as provided for in Article 15.4b or 15.4c of the Charter.
  3. Notice and delivering notice of the General Meeting of Shareholders: following Article 19.3 of the Charter.

Article 8: Registration at the General Meeting of Shareholders

Shareholders are entitled to attend the General Meeting of Shareholders in accordance with the law. They may attend the meeting by themselves or upon appointment of a proxy. Such authorization shall be executed as provided for in Article 17 of the Charter.

On the date of the General Meeting of Shareholders and prior to the commencement of the Meeting, the Corporation shall carry out the procedures of registration and verification of the shareholders’ status and must continue doing so until all the Shareholders entitled to attend and present at the Meeting are all registered.

The shareholders who come to the General Meeting of Shareholders late in time are entitled to register at once and then entitled to attend and vote at the Meeting.

Article 9: Voting, counting votes and declaring vote-counting results at the General  Meeting of Shareholders

  1. The conditions and sequence of carrying out the General Meeting of Shareholders are stipulated in Article 20 and Article 21 of the Charter. When registering for the Meeting, each shareholder or the representative of a shareholder’s group participating in voting and electing will be provided with a voting card and election card reflecting the number of  shares that they own.  
  2. Voting card and voting procedures at the General Meeting of Shareholders:
  1. The voting card contains the issues to be voted at the Meeting. The number of voting rights is equivalent to the number of shares held by each shareholder or representative of a shareholders’ group (one share = one voting right).
  2. Shareholder or representative of a shareholder’s group exercise his voting right by ticking in one of the three squares: “Agree”, “Disagree”, or “No opinion” in the voting card. Each shareholder or representative of a shareholder’s group is entitled to select one among the three squares and have to sign in the voting card before handing over to the Counting Committee.
  3. Valid voting cards are ready-printed voting cards provided by the Corporation with the hanging seal and without being erased, scratched, amended or added with new contents. Invalid voting cards are voting cards which fail to meet the requirements of valid voting cards mentioned above.
  4. The voting cards of shareholders who “Agree” shall be collected first, the voting cards of shareholders who “Disagree” shall be collected thereafter and the voting cards of shareholders who have “No opinion” shall be collected last. The Counting Committee shall then proceed to count the number of voting cards of each category.
  5. Subordinate cards may be used (in case of necessity) to vote for other matters which may arise during the course of the Meeting.
  1. Election card and election procedures at the General Meeting of Shareholders:
  1. The election card contains the list of candidates to be elected to the BOM and the BOC. The list of candidates and the number of members to be elected to the BOM or the BOC will be proposed and approved by the General Meeting of Shareholders as provided for in Articles 26.3, 26.4 and 38.2 of the Charter.
  2. The election of members of the BOM and the BOC shall be carried out following the principle of cumulative voting. Accordingly, each shareholder has the total number of rights corresponding to his/her number of shares multiplied with the number of members of the BOM or the BOC to be elected and each shareholder shall have the right to gather all his/her voting rights for one or several candidates.
  3. Shareholder or representative of a shareholders’ group participating in the election shall indicate the number of voting rights for each candidate in his/her election card.
  4. Valid election cards are ready-printed election cards provided by the Corporation without being erased, scratched, amended, or electing more than the number of members prescribed for the BOM or the BOC, or added with new names of persons who are not the approved candidates. The total number of election rights for each candidate shall not exceed the total number of voting rights of each shareholder or his/her representative. Invalid election cards are those which do not satisfy requirements for the valid election cards as mentioned above.
  5. The winning candidates shall be the candidates having the highest number of votes calculated from top to bottom until the prescribed number is sufficient but must be elected by at least 65% of the total shares of shareholders or shareholders’ representatives attending the Meeting.
  1. The Chairman of the Meeting will nominate members of the Counting Committee to be approved by the Meeting. Members of the Counting Committee shall not exceed 3 and at least one (1) member must be the BOC member.
  2. Vote counting results shall be declared by the chairman immediately before closing the meeting.

Article 10:  Approval of the resolutions of the General Meeting of Shareholders

The General Meeting of Shareholders approves resolutions by direct voting at the Meeting or by obtaining written opinions.

  1. Direct voting at the meeting
  1. Resolutions of the General Meeting of Shareholders shall be passed if they are agreed by shareholders who hold at least 65% of the total voting rights of the participating shareholders.
  2. Resolutions of the General Meeting of Shareholders on the amendment of the Charter, types of shares and number of shares to be offered, merger, re-organization or dissolution of the Corporation, sale of assets of the Corporation or of its branches or on the purchase, by the Corporation or its branches, of assets the value of which is equal or more than 50% of the total value of assets of the Corporation and its branches, as recorded in the latest audited financial statement shall only be passed if they are agreed by shareholders who hold at least 75% of the total voting rights of the shareholders participating in person or by proxy.
  1. Approving resolutions by collecting written opinions
  1. The procedures of collecting written opinions and the content of the opinion form are  provided for in Article 23 of the Charter.
  2. The BOM shall organize to count the votes and prepare the voting counting minutes under the supervision of the BOC or a shareholder who does not hold a management position in the Corporation.
  3. A resolution of the General Meeting of Shareholders shall be passed if it is agreed by shareholders who represent at least 75% of the total voting rights. The vote counting minutes shall be sent to shareholders within fifteen (15) days from the date when the counting is completed.
  4. Resolutions which are passed by collecting written opinions of shareholders shall have the same value as they are adopted at a General Meeting of Shareholders.

Article 11: Minutes of the General Meeting of Shareholders

  1. Minutes of the General Meeting of Shareholders must be finalized and passed before closing the Meeting and kept at the head office of the Corporation.
  2. The chairman of a General Meeting of Shareholders shall be responsible for preserving the Meeting minutes. Minutes of the General Meeting of Shareholders shall be published on the website of the Corporation within 24 hours and sent to all shareholders within 15 days from the closing of the General Meeting of Shareholders. The minutes of General Shareholders’ Meeting shall be considered to be valid evidence of works carried out at the General Shareholders’ Meeting, unless there are reasonable objections on the contents of the meeting minutes which are duly raised within ten (10) days from the date of delivery of the minutes.
  3. Minutes of General Shareholders' Meeting, appendix of list of Shareholders registering to attend the meeting, the approved resolutions and relevant document attached to a meeting invitation notice shall be kept at the head office of the Corporation.  

Article 12: Publicising resolutions of the General Meeting of Shareholders

The disclosure of the General Meeting of Shareholders’ resolutions shall be in compliance with the Information Disclosure Policy.

Article 13: Reports of the BOM at the General Meeting of Shareholders

The operation report of the BOM submitted to the General Meeting of Shareholders must include the following contents:

  • Evaluation of the operation of the Corporation in the fiscal year;
  • Activities, remunerations and operational expenses of the BOM and of each BOM member;
  • Summary of the meetings and decisions of the BOM;
  • Supervision of the Chief Executive Officer;
  • Supervision of other managers;
  • Plans for the coming time.

Article 14: Reports of the BOC at the General Meeting of Shareholders

The operation report of the BOC submitted to the General Meeting of Shareholders must include the following contents:

  • Activities, remunerations and operational expenses of the BOC and of each BOC member;
  • Summary of the meetings and decisions of the BOC;
  • Supervision of the operation and financial standing of the Corporation;
  • Supervision of BOM members, the Chief Executive Officer and other managers;
  • Evaluation of the coordination between the BOC and the BOM, the Chief Executive Officer and shareholders

 

CHAPTER III

MEMBERS OF THE BOARD OF MANAGEMENT AND THE BOARD OF MANAGEMENT

 

Article 15: Members of BOM and procedures for nominating, standing for election and electing members of BOM

  1. Standards and eligibility of BOM Members:
  1. BOM members have to satisfy all the standards set forth in Article 26.2 of the Charter.
  2. BOM members will not be qualified as BOM members in the cases set forth in Article 26.5 of the Charter.
    1. Standing for election, nomination and election of BOM members
  1. The procedures for nominating and standing for a position in the BOM are stipulated in Articles 26.3 and 26.4 of the Charter.
  2. The term of office of a BOM member is not more than five (5) years and a BOM member can be re-elected for an indefinite number of terms. The Corporation’s BOM members shall only participate in the  Board of Management of not more than five (5) other companies.
  3. The election of BOM members is be carried out as provided for in Article 9.3 of this regulation.
    1. Responsibilities and obligations of BOM members:
  1. A BOM member is responsible for fulfilling his/her duties in an honest and cautious manner and in the best interests of the shareholders and the Corporation.
  2. A BOM member must attend all the meetings of the BOM and provide his/her opinion on the issues in the agenda of the meeting. Any BOM member  can authorize  another person to attend the meeting on his behalf if this authorization is approved by the majority of BOM members.
  3. A BOM member must declare to the Corporation all the remunerations which he/she receives from subsidiaries, associated companies or other organizations of which they are representatives of the contributed capital of the Corporation.
  4. A BOM member and his/her related persons when purchasing/selling shares of the Corporation will have to report to the State Securities Commission and disclose the information of such transactions as prescribed by the law.
  5. Disclosure of benefits of BOM members: If a BOM member is directly or indirectly benefited from a contract or transaction signed or expected to be signed with the Corporation and aware of his/her benefits, he/she shall disclose the nature and content of such benefits in the meeting where the BOM for the first time reviews the execution of such contract or transaction. Or, such member may do this in the nearest meeting of the BOM held after he/she knows that he/she has benefits or will have benefits in a relevant transaction or contract.

In the circumstance that a BOM member is not aware that he/she and his/her related persons are benefited at the time the contract or the transaction is executed by the Corporation, that member must disclose the relating benefit in the first meeting of the Board of Management after that member is aware that he/she is benefited or will be benefited from the related contract or transaction.

Article 16: The Board of Management

  1. Composition of BOM
  1. The Board of Management shall consist of minimum five (05) and maximum eleven (11) members. The number of independent members must make up at least one-third of the total members of the BOM. The minimum number of independent members is determined by the method of rounding down.
  2. In case a BOM member ceases hih/her capacity as BOM member provided for in the law and the Charter, is dismissed or cannot for any reason continue to be a BOM member, the BOM may appoint a substitute. In this case, the substituted member of the BOM must be approved at the nearest General Meeting of Shareholders.
    1. Responsibilities and obligations of the Board of Management
  1. The BOM is responsible to the shareholders about the operation of the Corporation, defining the strategic orientation and supervising the implementation of the strategy.
  2. The BOM is responsible for ensuring that the Corporation fully comply with the provisions of the law, the Charter and the internal regulation of the Corporation, providing shareholders with equal treatment and respecting the interests of the stakeholders of the Corporation.
  3. The BOM is responsible for formulating the mechanism of assessment, rewarding and punishment applicable to BOM members, the Chief Executive Officer and other managers.
  4. The BOM is responsible for reporting about its operation at the General Meeting of Shareholders.  
  5. Specific responsibilities, rights and obligations of the BOM are prescribed in Article 27 of the Charter.
    1. Remuneration for the BOM:
  1. BOM members (excluding the authorized representatives) are entitled to receiving remuneration for their assignments in their capacity as BOM members. A total remuneration fund for the BOM shall be approved by the Annual General Meeting of Shareholders and declared in details in the Annual Report of the Corporation as prescribed by the law.
  2. A BOM member who holds an executive position (including the Chairman or Vice Chairman) or a BOM member who carries out other assignments which are, in the opinion of the BOM, beyond the normal assignment of one BOM member may receive additional remuneration in the form of a lump-sum amount, salary, commission, percentage of profit, or in any other forms in accordance with the decision of the BOM.
  3. A BOM member who concurrently holds a position in the management of the Corporation or its subsidiaries will have to declare all the salaries and bonuses and/or other remunerations associated with such position together with his/her remuneration in the position of a BOM member.
  4. A BOM member will be reimbursed all travel, accommodation expenses and other reasonable expenses incurred by them when performing their duties as BOM members, including all expenses arising in relation to participation in BOM meetings, or meetings of sub-committees of the BOM or the General Meeting of Shareholders.   

Article 17: BOM meetings and minutes of BOM meetings

  1. The convention of BOM meetings, conditions of validity, procedures, voting at BOM meetings are prescribed in Article 30 of the Charter.
  2. Minutes of BOM meetings are prepared in Vietnamese and signed by all the BOM members attending the meeting. The chairman of the BOM shall be responsible for delivering Minutes of Meeting to the members and such Minutes shall be deemed as authentic evidences of the work performed in such meeting unless opposition to the contents of the minutes is received within 10 days of delivering. Documents for the BOM meeting and Minutes of Meeting shall be kept at the head office of the Corporation.

Article 18: Approval of BOM decisions

  1. Voting at the meeting
  1. Each BOM member or his/her replacement and the authorized representative attending the meeting will have one voting right.
  2. The BOM will pass resolutions and make decisions following the consent of most of the BOM members present (more than 50%). In case the votes “For” and “Against” are equal, the vote of the BOM Chairman will be the decisive vote.
  1. Approving a decision in the form of obtaining written opinions:

In case of necessity, the BOM Chairman may decide to obtain opinions from the BOM members entitled to vote in writing in accordance with the following procedures:

  1. Send a notice of obtaining written opinions (Opinion Notice) enclosed with documents relating to the decision to be approved to BOM members;
  2. The BOM members vote for the issues at the request of the BOM Chairman stated in the Opinion Notice;
  3. The BOM counts the votes and makes the Minutes of Vote Counting under the witness of not less than one BOC member and the BOM Chairman will notify and send vote-counting results to the BOM members.
  4. A resolution is passed when most of the BOM members (over 50%) send their ‘Agree” opinions in writing. In case the “Agree” and “Disagree” opinions are equal, the opinion given by the BOM Chairman will be the decisive one.
  5. Based on the vote-counting results, the BOM Chairman on behalf of the BOM signs and issues decisions on the matters already approved by BOM members.  

Such decision will be effective and valid as a decision approved by BOM members at a meeting which is convened and held in a proper manner.

Article 19:  Procedures of selection, appointment and dismissal of senior managers

  1. The BOM appoint one Chief Executive Officer, one or several Deputy Chief Executive Officers, one Chief Accountant and other Senior Managers of  the Corporation by means of decisions which have been properly passed. The term of office of the Chief Executive Officer shall be five (5) years unless otherwise stated and may be re-appointed by the BOM.
  2. The BOM will decide salary, remuneration, benefits and other provisions in the Employment Contract for the Chief Executive Officer. Employment Contracts with other senior managers shall be decided by the BOM after consulting opinion of the Chief Executive Officer.  
  3. The BOM may dismiss the Chief Executive Officer when two-thirds of BOM members and over agree by voting (in this case, excluding the vote of the Chief Executive Officer) and appoint another person to be the Chief Executive Officer. The Chief Executive Officer who has been dismissed shall have the right to object to such dismissal decision in the next General Meeting of Shareholders.

Article 20: Corporate Secretary

  1. To support the management operation of the Corporation, the BOM shall appoint at least one (1) secretary for the Corporation. The corporate secretary must have proper understanding of the law. The corporate secretary shall not concurrently work for the auditing company which is providing auditing service for the Corporation.
  2. The roles and duties of the corporate secretary are prescribed in Article 34 of the Charter.  

CHAPTER IV

MEMBES OF BOARD OF CONTROL AND BOARD OF CONTROL

 

Article 21: BOC members and composition of BOC   

  1. BOC members must not be such persons that are prohibited from being BOC members according to the law and the Charter of the Corporation. BOC members must have proper knowledge and experience to perform their functions. BOC members may not be shareholders of the Corporation.

BOC members must not work in the accounting and/or finance department of the Corporation, must not be members or employees of the independent auditing company which is auditing the financial statements of the Corporation.

  1. BOC membership status shall be terminated in the following cases:  
  1. If such member is prohibited to act as BOC member by the law;
  2. If such member resigns and sends a notice thereof to the head office of the Corporation;
  3. The member is influenced by his mental disorder and other BOC members  realize that he/she is of insufficient civil capacity;
  4. If such member is absent from BOC meetings within six consecutive months without permission of the BOC and the BOC makes a decision that his/her position is vacant.
  5. Such member is dismissed in accordance with a decision by the General Meeting of Shareholders.
  1. The BOC shall have minimum three (3) and maximum five (5) members. The BOC members shall be elected by the General Meeting of Shareholders. The term of office of the BOC shall not be more than five (5) years and the BOC members may be re-elected with an indefinite number of terms. The nomination of a BOC member shall be carried out as provided for in Article 38.2 of the Charter.
  2. The Chief Controller must be qualified in accounting.

Article 22: Rights, responsibilities and remuneration of BOC  

The BOC members have the rights and responsibilities and receive remuneration as provided for in Article 123 of the Enterprise Law and Article 39 of the Charter.

Article 23: Access to information and independence of BOC  

The BOC members will have access to all the information and documents relating to the operation of the Corporation, the shareholder register book of the Corporation, the list of Shareholders and other books and records of the Corporation for the purposes relating to their position on the condition that such information shall be kept “confidential”.

The BOM members, the Chief Executive Officer and managers shall supply information at the request of the BOC members.

The BOC members are independent in their operations and the implementation of their assignments in accordance with regulations of the law and the Charter.

 

CHAPTER V

COORDINATION BETWEEN

BOARD OF MANAGEMENT – BOARD OF CONTROL – BOARD OF DIRECTORS 

 

Article 24: Procedures of coordination between Board of Management, Board of Control and Board of Directors

1. Board of Management

  1. The agenda, contents and issues to be decided at BOM meetings shall be sent to the BOC members at the same time as to BOM members. Decisions made by the BOM  shall also be delivered to the BOD and the BOC.
  2. The BOM Chairman must convene a BOM meeting without delay if there are no proper reasons when a written request stating the purpose of the meeting and issues to be discussed is made by:
  • The Chief Executive Officer or no less than 5 managers
  • Two BOM members 
  • The majority of  the BOC

2. Supervision of BOC
 

  1. The BOC shall be responsible to Shareholders of the Corporation for its supervision activities. The BOC shall be responsible for supervising the financial standing of the Corporation, legality in actions of the BOM members, the BOD, the managers, the coordination between the BOM and the BOC, BOD and Shareholders and other missions as provided for by the law and the Charter, in order to protect the lawful/best interests of the Corporation and the Shareholders.
  2. The BOM, the Chief Executive Officer and the managers shall supply all the information and documents relating to operations of the Corporation, mainly:
    • Invitation Letter together with relevant documents, opinion notice from BOM members;
    • Minutes and decisions of the BOM;
    • Report of the Chief Executive Officer;
    • Information, documents on the management of business operations;
    • The Corporation’s reports on business performance, the annual, half-yearly and quarterly financial statements;  
    • Report on the activities of the  BOM.
  3. In the BOC meetings, the BOC can request the BOM and BOD members and the independent auditor to attend the meetings and answer the queries of the BOC.
  4. Based on regular reports and request for particular information by the BOC, the BOC  shall have the right to request the BOM to review decisions made by the Chief Executive Officer.
  5. In case there is any sign of violation of the law or the Charter which may cause serious material or reputational damage to the Corporation, the BOC shall have the right to request the Chief Executive Officer to immediately stop the execution of such decision. Within 24 hours of such request, the BOC shall notify its opinion to the BOM members. The BOM chairman will issue a notice on the execution of the Chief Executive Officer’s decision.
  6. Recommendation and/or assessment of BOD activities will be made every six months to submit to the BOM Chairman.
  7. The BOC may directly report to the State Securities Commission or other State agencies in case it discovesr the behaviours which are deemed to be in breach of the law or the Charter by the BOM members, the BOD or managers.
  8. The BOC shall have the obligation to keep confidential the information collected during the supervision of the Corporation’s operations. Disclosure of such information shall be only carried out at the request of competent authorities or with the approval of the General Meeting of Shareholders.

3. Board of Directors
 

The BOD has to report to the BOM and BOC on the implementation of resolutions of the General Shareholders' Meeting and the BOM, report on the implementation of business and management missions of the Corporation and other reports as specifically requested by the BOM and BOC.

 

CHAPTER VI

PREVENTION OF CONFLICT OF INTERESTS AND TRANSACTION WITH RELATED PARTIES OF THE CORPORATION

 

Article 25: Honesty and prevention of conflicts of interests of BOM members, BOC members, the CEO and other managers

  1. BOM members, BOC members, the Chief Executive Officer and other managers must disclose their related interests as prescribed by the Law on Enterprise and other related legal documents.
  2. BOM members, BOC members, the Chief Executive Officer, managers and their related persons must not take advantage of the business opportunities which are likely to benefit the Corporation for their personal sake; or use information obtained by their position for their own interest or for the interest of other organizations or individuals.
  3. BOM members, BOC members, the Chief Executive Officer and other managers must notify the BOM of the transactions between the Corporation, its subsidiaries, or companies controlled by the Corporation with themselves or with their related persons as prescribled by the law.
  4. The Corporation is not permitted to provide loans or guarantees for BOM members, BOC members, the Chief Executive Officer, managers or their related persons, unless otherwise decided by the General Meeting of Shareholders.
  5. A BOM member shall not vote for the transactions in which he/she or his/her related person participates, including the case where his/her benefit has not been identified be it material or non-material benefit. The aforesaid transactions have to be declared in the Annual Report of the Corporation.  
  6. BOM members, BOC members, the Chief Executive Officer, managers or their related person shall not use the information which has not been disclosed by the Corporation to disclose to the others or to execute the related transactions by themselves.
  7. BOM members, BOC members, the Chief Executive Officer, managers or their related person shall not purchase or sell or trade in any form the shares of the Corporation or its subsidiaries at the time they obtain the information which will certainly affect the prices of such shares and which is not known to other Shareholders.

Article 26: Transaction with related parties

  1. When executing a transaction with related persons, the Corporation shall sign a written contract on an equal and voluntary principle. The content of the contract must be clear and specific and the information must be disclosed to shareholders at their request.
  2. A contract or transaction between the Corporation with one or several BOM members, the Chief Executive Officer, managers, or their related persons or companies, partners, associations or organizations in which one or several BOM members, managers, or their related persons are members or are related in terms of financial benefits will not be nullified by the aforesaid relations, or because such BOM members or such managers are present or attend the related meeting or participate in the BOM or sub-committee which have approved the execution of the contract or transaction, or because their votes are counted for that purpose, if:  
  1. For contracts the value of which is less than 20% of the total assets recorded in the latest financial statement, important elements in such contracts or transactions as well as relations and interests of managers or BOM members have been reported to the BOM or the relevant sub-committee. At the same time, the BOM or such sub-committee has approved the execution of such contracts or transaction in an honest manner with the majority of affirmative votes of the BOM members who do not have related benefits, or
  2. For contracts the value of which is more than 20% of the total assets recorded in the latest financial statement, important elements as well as relations and interests of managers and BOM members have been declared to shareholders who have no related benefits and who are entitled to vote on such matter and such shareholders have voted for such contracts or transactions.
  3. Such contracts or transactions are deemed equal and fair by an independent consultant in all aspects related to shareholders of the Corporation at the time such transactions or contracts are permitted, passed or approved by the BOM or by one sub-committee under the BOM or by the Shareholders.

     3. The Corporation must take necessary measures to prevent the related persons from intervene

with the Corporation’s operation and causing damages to the Corporation’s interests by controlling the sale and purchase channels of the Corporation or the prices.

  1. The Corporation must take necessary measures to prevent shareholders and related persons from making transactions which cause losses of capital, assets or other resources of the Corporation. The Corporation must not provide loans or guarantees to shareholders and related persons.

Article 27: Ensuring lawful interests of stakeholders

1. The Corporation undertakes to respect the lawful interests of stakeholders including banks, creditors, labourers, customers, counterparts, community and other stakeholders.

2. The Corporation at all times respects and actively cooperates with the stakeholders by:

  1. Providing all necessary information to enable them to assess the performance and financial standing of the Corporation and make decisions;
  2. Encouraging them to provide opinions on the business performance, financial standing and important decisions relating to their benefits via direct contact with the BOM, the BOD and the BOC.

3. Being an enterprise operating in Vietnam, the welfares, environmental protection, common interests of the public, and social responsibility are considered as one of the important policies of the Corporation together with other business management policies.

4. The Corporation will make compensation for the persons who have the possibility of becoming one related party in claims or legal proceedings having been, being or to be carried out if they were or have been BOM members, managers, employees or representatives of the Corporation and if such persons honestly and cautiously act with professional capacity in the manner that such persons believe to be beneficial for or not against the highest interest of the Corporation and in compliance with the law.

Expenses to be compensated include the arising expenses (including lawyer’s fee), judgement expenses, fines, payable amounts arising in fact or deemed to be at a reasonable level when these cases are settled in compliance with the law.  

The Corporation shall have the right to purchase insurance for such persons against the aforesaid compensation liabilities.

 

CHAPTER VII

INFORMATION DISCLOSURE AND TRANSPARENCY

 

Article 28: Information disclosure and implementation

  1. The Corporation has the obligation to disclose on a sufficient, precise and timely basis periodic and extraordinary information on the business performance, financial standing and corporate governance to shareholders and the public. The information and the method of information disclosure must be in compliance with the law, the Charter and the Information Disclosure Guidelines. In addition, the Corporation must disclose on a sufficient, precise and timely basis the other information which may affect the share price as well as the decisions of shareholders and investors.
  2. The information disclosure must be carried out in a manner which assures that shareholders and  investor community may have access to in an equal and concurrent manner. The wording of the information must be clear, easy to understand and avoid misunderstanding for shareholders and the public.
  3. The Chief Executive Officer appoints a staff in charge of information disclosure with his/her full name, title, fax and contact telephone number.

Article 29: Disclosing information about corporate governance

The Corporation must disclose information about corporate governance at the annual General Meeting of Shareholders and in the Annual Reports as prescribed by the law on securities and securities market.

Article 30: The responsibilities of reporting and disclosing information of BOM members, BOC members, the Chief Executive Officer

In addition to the responsibilities provided for in Article 25 of this Regulation, BOM members, BOC members, the Chief Executive Officer are responsible for reporting and disclosing information about the transactions in the following cases:

  1. Transactions between the Corporation with companies of which the aforesaid members are founding shareholders, or BOM members, or executive Director within the previous three (03) years.
  2. Transactions between the Corporation with companies of which the related persons of the aforesaid members are BOM members, executive Director or major shareholders.
  3. Transactions which may bring material or non-material benefits to the aforesaid members.

 

CHAPTER VIII

SUPERVISION MECHANISM AND DEALING WITH VIOLATIONS

 

Article 31: Supervision

The Corporation, related individuals and organizations and the shareholders of the Corporation shall be under the supervision in terms of corporate governance of the State Securities Commission, and other competent authorities in compliance with the law.

The BOD will disseminate and supervise the implementation of the Corporation’s regulations as well as internal regulations to each of the staff.

Article 32: Dealing with violations

In case the Corporation violates or fails to implement the provisions of this Regulation without disclosing information and reporting to the State Securities Commission as stipulated, it shall be held responsible for and shall pay the fines for administrative violation in accordance with regulation in the decree on administrative punishment in securities and securities market.

Other violation cases will be handled based on working rules and internal regulations on rewards and punishments regime of the Corporation. The handling of violation shall be in full compliance with the law, the Charter and other internal regulations.

 

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