Quá trình cổ phần và đại chúng hóa của các doanh nghiệp Việt Nam tuy chỉ ở giai đọan khởi điểm, tuy nhiên đã không ít sự kiện tai...
Ha Kim Dung's insight:
Interestingly, CEO-Chairman separate is the main model in European companies, for example, 95% listed companies in London SE splits the top-positions. In contrast, during the last 15 years in USA, combination CEO-Chairman is the main trend: 80% companies in S&P500 combine 2 to 1.
In Vietnam, it is not compulsory to separate the 2 top jobs under the Security Law 2006 and Enterprise Law 2005. However, the split is suggested and preferable
Argument: “CEOs who are stewards, their pro-organizational actions are best facilitated when the corporate structure gives them the high authority and discretion”… “Stewards maximize their utility as they achieve organizational rather than self-serving objectives.”
Result: Steward Theory supports that the CEO duality establishes strong, unambiguous leadership embodied in an unify of command and that firms with CEO duality may make better and faster decisions, may outperform those which split the two positions.
Suggest for the relevant research in Vietnam: develop and test the hypothesis to see that CEO duality in Vietnam follows which theory (agency/stewardship/neutral theory)
"The OECD Principles of Corporate Governance (CG) were endorsed by OECD Ministers in 1999 and have since become an international benchmark for policy makers, investors, corporations and other stakeholders worldwide".
There are six main principles: (1) Ensuring the Basic for an Effective CG framework, (2) The rights of Shareholders and Key ownership functions, (3) The Equitable Treatment of Shareholders, (4) The role of Stakeholders in CG, (5) Disclosure and Transperancy, (6) The responsibilities of the Board.
Vietnam has followed the OECD principles of CG since 2010 and had three CG scorecards (2010, 2011, 2012).
The framework for corporate governance in Vietnam, especially for listed companies, is in the early stages of development. This study examines the corporate governance of Vietnamese listed companies.
Ha Kim Dung's insight:
The study’s purpose is to exam the corporate governance of listed company inVietnamin the early stage (2008) based on the current Vietnamese legal framework and the OECD implementation principles. The authors provided some case studies to illustrate the corporate governance inVietnam, such as FPT corporation case, Bibica case, Vipco case.
In regarding to the duality of CEO, under the Vietnamese Enterprise Law 2005, the head of the BOM is a chairperson who is appointed by the GSM or the BOM in accordance with the charter. The chairperson of the board can also be the CEO of the company, unless otherwise provided for by the charter.
One of the main suggestions of the study is that “corporate governance of listed companies should require the independence of directors on the BOM and a strengthening of the role of the Control Board”. The listed companies should have the difference between CEO and Chairman to increase the effectiveness and transparency.
The main purpose of this part is find the relationships between board structure an takeover defenses. The author chose the sample of 1.334 firms listed in governance index in 2002, the duality (CEO-Chairman is one of the variable. As the result, 74% of firms have a CEO who is also the chairman of the board. At the 0.01 significant level, the duality has the positive result (1.050) with the governance index. It showed that the duality has significantly correlated with the governance index, the duality can help firm to get the better governance index.
According to the article, the duality of the CEO in Vietnam (the Chairman is also the CEO) has positively correlated with the firm performance. It can be interpreted that the duality of CEO can improve the the corporate performance.
Argument: The agency costs in large organizations are reduced by institutional arrangements that separate decision management from decision control. Decision management refers to the rights to initiate and implement recommendations for resource allocation, while decision control refers to the rights to ratify and to monitor the implementation of resource commitments.
Research question: How the difference types of CEO-Chairman separation impacts the future firm performance.
Data & method: collected data on S&P 1500 companies that underwent a CEO-board chair separation between 2003 and 2005 and categorized each separation event as apprentice, departure, or demotion.
Hypothesis and result:
(1) Hypothesis: the company which had the poor performance before separating has the positive effect on the future performance after the separation.
Results: The results support strongly that a CEO-board chair separation would promote strong future performance only when it followed weak performance, as well as for the hypothesis that a separation following strong performance would hurt future performance.
(2) Hypothesis: Three kinds of separation affect the forward financial performance of the firm after separation
Result: Apprentice and departure separations had no effect on company performance beyond the typical regression to the mean often seen in performance measures. Demotions, however, generated a considerable reversal of fortune for the firms that implemented them
In general, CEO turnover has been researched widely following numerous studies in developed countries.
Ha Kim Dung's insight:
Vietnamis the transition country with the incomplete legal framework and the enfant financial system and corporate governance. The study aims to provide the better view of the factors which affected on CEO turnover and the link between CEO turnover and firm performance.
The sample of the theisis was conducted on 780 firms (including 156 listed firms inHanoiand Ho Chi Minh stock exchange) from 2006-2010. There were 88 CEO turnovers during the time scale of research. The study found that the firm performance had the negative relationship with the CEO turnover while the ownership structure kept the positive significant effect on the CEO turnover. Beside, the age also reduced the influence of CEO duality on CEO turnover. Consequently, the author suggested that the independence of BOM could help to improve the efficiency and effectiveness of corporate governance and management.
As the resulf of the article's hypothesis, it is strong link between the shareholders' rights and firm performance/stock returns: the higher the shareholders' rights have, the higher the firm valuation, profits, sales growths are, the lower the capital expenditure is.
This is the third year that Vietnam has employed a scorecard survey to monitor CG standards and practices in Vietnamese companies.
Ha Kim Dung's insight:
According to the Corporate Governance Scorecard for Vietnam 2012, the question E05 "Is the Chairman a non-executive director?" can help to distinguish the role of CEO and Chairmain in Vietnam listed company. Of 75-listed-company-sample, 66% of cases are that the chairman is the non-executive director, 34% of the other are the duality.
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