[Press release] A virtual ceremony to honor best-listed enterprises in Vietnam in 2021

(December 28, 2021) A ceremony to honor the best-listed enterprises in Vietnam in 2021 was held online for the first time after 14 years. The  virtual event was held along with the Annual Listed Enterprises Conference themed “Listed Enterprises and New Requirements for Transparency of Environmental Information”.

The ceremony saw the participation of leaders of the State Securities Commission, leaders of the Vietnam Stock Exchange; Securities Depository Center, members of the Judging Panel and the Sustainable Development Council, leaders of supporting units such as the International Finance Corporation and the Association of Chartered Certified Accountants ACCA. It was also attended by leaders of the world’s leading auditing companies Deloitte, Ernst and Young, KPMG and PwC, leaders of the VLCA 2021 voting organizations like Ho Chi Minh Stock Exchange, Hanoi Stock Exchange, Investment Newspaper, the award sponsor Dragon Capital and representatives of listed enterprises on the Vietnamese stock market.

Overcoming the obstacles and impacts of the COVID-19 pandemic, the Judging Panel decided to award 38 best-listed companies in three categories – Annual Report, Corporate Governance and Sustainability Reporting. In addition, in each category, one enterprise that made outstanding progress in information transparency was granted an award.

For Annual Report Category: This year, for the first time, the scoring of the annual report in the preliminary round was conducted by a group of independent experts from the Research and Training Center under Ho Chi Minh City University of Technology. The preliminary results were then reviewed by Ho Chi Minh Stock Exchange and Hanoi Stock Exchange, before  submitting these results to the four leading auditing companies (Big 4) – Deloitte, Ernst & Young, KPMG and PwC for review, to ensure accuracy, objectivity and depth in the evaluation.

The Voting Council also added the content of the report on greenhouse gas emissions to the evaluation criteria in the form of bonus points. This move aimed to  encourage listed companies to take the lead in implementing their commitment to social corporate responsibility to respond to climate change, thereby spreading positive effects to the business community.

According to the council’s assessment, the difficulties caused by the pandemic affected businesses in 2020 and 2021, and more or less influenced the work of collecting information, summarizing the drafting and publishing of annual reports.

Despite challenges, businesses still strived to draft their annual reports, providing useful information to readers. The scores for the enterprises’ annual reports improved in 2021, with many of them achieving higher scores than in 2020. The best enterprises in the three capitalization groups all invested well in the form and achieved equally high scores. However, large-cap enterprises made more effective investments in the content of annual reports compared to mid- and small-cap ones.

In 2021, the mid-cap group of 145 companies improved its score compared to 2020 in both the form and content of annual reports. In the group of top 10 mid-cap companies, there was no clear difference in quality compared to the group of top 10 large-cap firms. The outstanding reports of 10 leading companies had clear, detailed, specific and diverse content, showing that they invested carefully in their annual reports.

Meanwhile, 306 firms in the small-cap group had weak reporting quality, the average and median scores were both low, and below average, showing that these firms failed to meet the basic requirements of annual reports. Although the average score of the small-cap group was not high, the five mid-cap enterprises who received the award in the Annual Report category were truly worthy of honor.

Notably, most listed companies hosted Annual General Meetings (AGMs) in the first four months of the year and paid dividends within six months after the AGMs ended. In 2020, these businesses organized online voting at their AGMs. That was a good practice that allowed shareholders to exercise their rights while contributing to saving resources for society.

Regarding the Corporate Governance Category, the scores improved compared to 2020, with many enterprises getting higher scores. The Voting Council said that more enterprises had a score of over 80 points. That meant these firms could become potential candidates for the ASEAN Corporate Governance Scorecard (ACGS) Awards.

However, meeting good governance practices posed a big challenge for listed enterprises in Vietnam. In fact, in the ACGS project, Vietnam’s listed firms had lower scores for many years compared to those in other regional countries.

Enterprises in other countries were familiar with the application of progressive governance practices in the world, while Vietnamese firms were yet to be ready to put these good practices into practice. Large and mid-cap enterprises had higher compliance levels, and the good practice scores of large-cap enterprises were twice as high as those of small-cap ones.

Most members of the Voting Council agreed that the pandemic was a test of the risk management capacity of the enterprises’ Board of Directors. In 2021, the company’s annual report published quite well on how to manage important risks such as finance, accounting, internal control, operations, information technology, environment, society and economy.

In terms of Sustainability Reporting Category, 2021 was a year that saw many international events on the impact of climate change and the role of businesses in promoting sustainable development. Businesses were an important link in sustainable development and to achieve this, it was necessary to have an important guiding and monitoring role of the business leadership to achieve ESG (Environmental-Social – Governance) standards.

According to the Voting Council, amid the COVID-19 pandemic, many businesses showed a strong commitment to ensuring the health and safety of employees, jobs, welfare, salary payments and bonuses for employees. At the same time, many businesses implemented community programs and supported localities in fighting against the pandemic.

Enterprises with a clearer commitment to ESG governance were demonstrated through a separate sustainable development department under the Board of Directors or General Directors and the participation of departments and divisions throughout the enterprise with clear responsibilities and action plans.

In spite of the positive aspects, there remained many limitations as many enterprises lacked a description of the management of environmental and social risks. Most enterprises failed to publish their information collection process for reporting.

The data lacked analysis of fluctuations between periods or comparisons with the industry. In addition, very few enterprises had reports analyzing the impact of the value chain, especially from suppliers or integrating sustainable development factors into the criteria for selecting suppliers, leading to a decrease in the completeness and reliability of the report.

Enterprises had not yet demonstrated the connection of corporate social responsibility (CSR) strategies to their operations. They also failed to have a reward mechanism directly linked to sustainable development indicators.

Tran Anh Dao, Acting CEO in charge of the Board of Management of Ho Chi Minh Stock Exchange and head of the Award Voting Council said through the award, the council wanted to send to the listed business community a message about responding to climate change starting from the smallest actions shown in the presentation on their annual reports, and team up to create great achievements contributing to changing the living environment.

The above message demonstrated the pioneering role of listed firms, aiming for the goal of green growth, economic growth associated with environmental sustainability and social justice.

In the upcoming development period, when Vietnam integrated more and more deeply and strongly into the international economy, good governance and orientation towards sustainable development were inevitable trends for businesses worldwide as well as financial institutions and investors, Dao said.

The Voting Council would continue to work with relevant parties to improve transparency in information disclosure and corporate governance capacity of listed companies, aiming at upgrading the market and further enhancing the image and position of the Vietnamese stock market in the region and the world, according to Dao.

Dominic Scriven, Chairman of Dragon Capital which is the sponsor of the award, said Dragon Capital had been a sponsor of VLCA for 14 consecutive years. The company also accompanied the Voting Council to promote transparency, towards good practices in corporate governance and sustainable development.

Faced with the urgent trends and demands from relevant partners on issues related to climate change, greenhouse gas reduction and biodiversity protection, Dominic said he hoped that Vietnamese enterprises would soon start measuring and managing their carbon footprints to have a plan to gradually reduce greenhouse gas emissions to the environment, and publish this information in their annual reports.

The Vietnam Listed Company Awards (VLCA) evolved from the Annual Report Awards. Jointly organized by the Ho Chi Minh Stock Exchange (HoSE), the Hanoi Stock Exchange (HNX), and Dau Tu Newspaper, the VLCA is solely sponsored by Dragon Capital Vietnam Management Company.

2021 was the 14th year that the award had accompanied Vietnam’s stock market and the listed business community. The award aimed to support and encourage listed businesses to improve their professionalism, and transparency, and enhance the ability to convey information to investors, aiming for effective governance and increasingly sustainable development.

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For more information about the award, please visit the website (www.aravietnam.vn), the website of HOSE (www.hsx.vn), HNX (www.hnx.vn) or Securities Investment Newspaper (www.dtck.vn), or contact:

Ms. Tran Anh Dao

Acting CEO in charge of the Board of Management of Ho Chi Minh Stock Exchange

Tel: 08-3821 7713

Email: anhdao@hsx.vn

 

Mr. Nguyen Hong

Deputy Editor-in-Chief

Investment Newspaper

Tel: 08-3930 5319 – 0903 684 558

Email: nguyenhong@virhcm.com.vn