BUSI­NESS Firms have so­cial re­spon­si­bil­ity

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HCM CITY — Highly ca­pa­ble and di­verse boards of di­rec­tors that ad­here to so­cial re­spon­si­bil­ity are cru­cial for cor­po­rate sus­tain­abil­ity, ex­perts said dur­ing a fo­rum in HCM City on yesterday.

The fo­rum was held by Vieät Nam In­sti­tute of Di­rec­tors (VIOD) and Vieät Nam Cor­po­rate Gov­er­nance Ini­tia­tive ( VCGI), both of which fo­cus on pro­mot­ing good cor­po­rate gov­er­nance prac­tices.

Amar Gill, man­ag­ing di­rec­tor of Black­Rock, a New York-based global in­vest­ment man­age­ment cor­po­ra­tion, said that to achieve cor­po­rate sus­tain­abil­ity, a com­pany has to fo­cus on its op­er­a­tion and long term vi­sion, and ex­am­ine its man­age­ment ca­pa­bil­ity and im­pact on the en­vi­ron­ment and so­ci­ety.

In ad­di­tion to keep­ing the best in­ter­ests of share­hold­ers, boards of di­rec­tors need to care­fully mon­i­tor busi­ness strat­egy plan­ning and im­ple­men­ta­tion as well as ef­fec­tive re­source al­lo­ca­tion.

Risk man­age­ment re­gard­ing fi­nance, busi­ness op­er­a­tions and cli­mate change is also cru­cial.

Gill also said that com­pa­nies must keep track of their im­pact or “foot­print” on the en­vi­ron­ment and so­ci­ety and min­imise the neg­a­tive im­pact.

If not, they risk los­ing their “so­cial li­cence to op­er­ate”, which refers to stake­hold­ers’ac­cep­tance of a firm’s busi­ness prac­tices.

Vuõ Thò Thuaän, chair­woman of Traphaco, a Viet­namese phar­ma­ceu­ti­cal com­pany, said that com­pa­nies should man­age their risks well as in­vestors al­ways look to the fu­ture.

In the case of Traphaco, the com­pany in­vested in its own in­gre­di­ent zones to har­vest high qual­ity ma­te­ri­als, be­cause it could not af­ford a short­age of ma­te­ri­als or low qual­ity in­gre­di­ents.

She also said that aware­ness of the im­por­tance of cli­mate change and man­age­ment to en­sure sus­tain­abil­ity should be im­proved.

Boards should also have diver­sity, in­clud­ing peo­ple of dif­fer­ent back­grounds and ex­pe­ri­ences, and both men and women.

“The diver­sity of board mem­bers helps them eval­u­ate is­sues from a va­ri­ety of per­spec­tives be­fore mak­ing de­ci­sions, and com­ple­ments each other to in­crease the ef­fec­tive­ness of the boards of di­rec­tors,” said Dr. Vuõ Baèng, a mem­ber of the Prime Minister’s Ad­vi­sory Group and the chair­man of VCGI.

How­ever, Vuõ Quang Thònh, CEO and board mem­ber of Dy­nam Cap­i­tal, which spe­cialises in as­set man­age­ment, said that the diver­sity of many boards of di­rec­tors in Vieät Nam, es­pe­cially in fam­ily-owned busi­nesses, is lim­ited.

Many boards of di­rec­tors in Viet­namese com­pa­nies are com­posed pri­mar­ily of rel­a­tives, as op­posed to fully in­de­pen­dent mem­bers.

Many Viet­namese board mem­bers gen­er­ally have sim­i­lar back­grounds and ex­pe­ri­ences, which mean they may be used to a lim­ited num­ber of ways of op­er­at­ing.

Vieät Nam’s cor­po­rate gov­er­nance has seen im­prove­ment over the years due to de­vel­op­ment of reg­u­la­tions and as­sis­tance from con­sul­tant firms and busi­ness groups, ac­cord­ing to VIOD.

Nonethe­less, it is still lack­lus­ter com­pared to other ASEAN coun­tries. More reg­u­la­tions to en­sure clar­ity and fair­ness, as well as higher qual­ity and re­spon­si­ble boards of di­rec­tors, are re­quired. — VNS

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