Corporate governance in Vietnam : a system in transition

Abstract

This paper looks at the development of company law and corporate governance in Vietnam – a transitional economy in South East Asia. It argues that corporate governance is a newly introduced concept but has become increasingly important in Vietnam, especially by the introduction of the new company legislation in 2005. 1. The Historical Background of Vietnamese Company Law and Corporate Governance Historical influences have the potential to leave their mark on corporate governance practices and the development of a corporate governance system. 2 Before considering the existing Vietnamese corporate governance system, it is necessary to understand the history of Vietnamese company law and its corporate governance law regimes. The historical development of company law and corporate governance law regimes in Vietnam can be divided into three stages: the period of French colonization, the period 1945-1990, and, since 1990 up to the present. By a brief examination of the historical development of company law and corporate governance regimes in Vietnam, this section of the paper comes to three fundamental conclusions. First, the history of Vietnamese company law is dominated by legal borrowings. Second, the contemporary corporate governance law regime is partly shaped by the past. Last, politics were 1 As to the development of company law in Vietnam, see Bui Xuan Hai, Vietnamese Company Law: The Development and Corporate Governance Issues, Bond Law Review, Australia, (2006) Vol. 18(1); 2 Sir Adrian Cadbury, 'Foreword' in Thomas Clarke (ed), Theories of Corporate Governance: the Philosophical Foundations of Corporate Governance (2004) ix; Lucian Arye Bebchuk and Mark J. Roe, ‘A Theory of Path Dependence in Corporate Ownership and Governance’ in Jeffrey N. Gordon and Mark J. Roe, Convergence and Persistence in Corporate Governance (2004) 69, 69.