Mon 2 Oct 2017
News - Awareness promoting seminars on key corporate governance topics in VIetnam by Andrew Finnemore (LuxDev)
ILA delivers Corporate Governance seminar in Vietnam

Luxembourg and Vietnam have enjoyed over 20 years of development cooperation partnership; projects funded by the Grand Duchy of Luxembourg and implemented by its development agency, Lux-Development (LuxDev), have targeted areas of need such as education, rural development and healthcare. LuxDev also started in 2016 a new project to support the development of the Vietnamese securities market with its Project VIE/032, “Capacity Building in Vietnam’s financial sector”. This follows a first financial sector project, VIE/026, which started in 2008 and achieved important contributions in securities law, funds and IT systems.

VIE/032 is managed for LuxDev by Chief Technical Adviser, Andrew Finnemore Capon, who is based in the project office in Hanoi, Vietnam’s capital, and works closely with the Vietnam State Securities Commission (SSC), the regulator of the securities market and LuxDev’s local counterpart and main beneficiary.

Vietnam is widely seen as one of the most dynamic countries in South East Asia, with GDP growth forecast at 6.3% for 2017 and 6.4% for 2018/19 period (World Bank). The securities market itself is relatively young still, in Vietnam started in 2000 and has seen good growth, from 42 listed companies in 2005 to 1388 by July 2017.

As Vietnam continues its path of development and opening, which includes the Free Trade Agreement with EU and Vietnam committed to ASEAN regionalisation initiatives there are many changes and challenges; for example the two existing stock exchanges, the Ho Chi Minh Stock Exchange (HOSE) and Hanoi Stock Exchange (HNX) are currently going through a merger and a derivatives market was opened this year in August which has started with an equity index future.

The project is focused on a number of key areas for strengthening Vietnam’s securities market, from support for the update of the Securities Law, through training and education (including derivatives workshops, an update of the curriculum for the licensing exams for securities brokers and an investor education website) to assistance for the upgrading of IT systems, such as the regulator’s trading surveillance systems and corporate information disclosure systems.

The project wishes to draw as much as possible on Luxembourg’s expertise in the finance sector and to this end LuxDev’s partner is Luxembourg based House of Training (HoT), which provides experts for training and technical assistance assignments. Under HoT’s former name, ATTF, Agence de Transfer de Technology Financière”, it has itself been delivering banking and finance courses in Vietnam since the early 2000s.

One important area is corporate governance. Vietnam still lags behind some of its regional ASEAN peers and to accelerate progress SSC became one of the founding members of the Vietnam Corporate Governance Initiative (VCGI) in 2016, along with HOSE, HNX and International Finance Corporation (IFC). The VCGI aims to build corporate governance awareness among directors of listed and public companies and the wider financial and corporate community and the idea is that this could lead in due course to an eventual Institute of Directors.

VCGI is embarking on a program of awareness promoting seminars on key corporate governance topics such as conflicts of interest and Board effectiveness. LuxDev is pleased to be supporting this initiative and with HoT support has been able to leverage Luxembourg expertise by bringing Institut Luxembourgeois des Administrateurs (ILA) on board.

ILA has already supplied one of their experts, Ms. Carole Wintersdorff. Ms. Wintersdorff delivered a workshop on Conflicts of Interest in July in the city of Danang, to a group of 15 to 20 directors and senior management of SSC. The workshop was well received and the VCGI is now planning to start a series of seminars for listed and public company directors, for which we anticipate further opportunities for ILA experts to participate.

Mr Finnemore Capon says, “we are delighted to launch our cooperation with ILA, and for Luxembourg expertise to make a tangible contribution to our project and for Vietnam.” Indeed, with Vietnam having reached lower middle income status this will be the last project under the development cooperation umbrella for the Vietnam financial sector, and one of the objectives is to solidify existing relations between Luxembourg and Vietnam, “ tisser les liens” and place them on a longer term footing, so that Luxembourg can be better placed to identify good business opportunities expected to emanate from this promising country. One of the most effective ways to do this is by deepening the institutional relations between the two countries and the project encourages other Luxembourg institutions to make use of the project’s platform and participate in speaker events or make short technical assistance contributions.

As a further business initiative the project has established a group of Luxembourg Vietnam alumni. Most of these alumni have been to Luxembourg already, via participation in ATTF banking courses, and there are also alumni from the former VIE/026 securities market project. The current project provides regular networking events for these alumni, typically with a presentation by an HoT speaker on a topic of interest such as risk management or cybersecurity.