According to Point b, Clause 3, Article 41 of the Securities Law No. 54/2019/QH14, "3. Composition and responsibilities of the Board of Directors:

b) The Board of Directors shall be accountable to the shareholders for the company’s operation; ensure the company’s compliance with law, its charter and internal regulations; develop the internal regulations on corporate governance and submit it to the General Meeting of Shareholders for approval; designate executive officers; and have other responsibilities prescribed by law and the company’s charter; ensure the company’s compliance with law, its charter and internal regulations; develop the internal regulations on company administration and submit it to the General Meeting of Shareholders for approval; designate executive officers; and have other responsibilities prescribed by law and the company’s charter;

The sample Internal Regulations on Corporate Governance are specified in Appendix II attached to Circular 116/2020/TT-BTC. Public companies refer to this sample to build Internal Regulations on Corporate Governance.

The contents required to be presented in the Company Charter are specifically stipulated in Clause 2, Article 24, Enterprise Law 2020 - Company Charter:

a) The company’s name, addresses of the headquarters, branches and representative offices (if any);

b) The company’s business lines;

c) The charter capital; total quantity of shares, types of shares and face value of each type (for joint stock companies);

d) Full name, mailing address, nationality of each partner (for partnerships), the owner and each member (for limited liability companies) or the founding shareholders (for joint stock companies). Stakes held by each member or partner (for limited liability companies and partnerships) and values thereof. Quantity of shares, types of shares and value of each type held by founding shareholders (for joint stock companies);

dd) Rights and obligations of the members or partners (for limited liability companies and partnerships) or shareholders (for joint stock companies);

e) The organizational structure;

g) Quantity, titles, rights and obligations of each of the enterprise’s legal representatives;

h) Method for ratifying the company’s decisions; rules for settlement of internal disputes;

i) Basis and method for determination of salaries and bonuses of the executives and controllers;

k) Cases in which members/shareholders may request the company to repurchase their stakes/shares (For limited liability companies/joint stock companies);

l) Rules for distribution of post-tax profits and settlement of business losses;

m) Cases of dissolution; procedures for dissolution and liquidation of the company’s assets;

m) Procedures for revising the company's charter.

a) The company’s name, addresses of the headquarters, branches and representative offices (if any);

b) The company’s business lines;

c) The charter capital; total quantity of shares, types of shares and face value of each type (for joint stock companies);

d) Full name, mailing address, nationality of each partner (for partnerships), the owner and each member (for limited liability companies) or the founding shareholders (for joint stock companies). Stakes held by each member or partner (for limited liability companies and partnerships) and values thereof. Quantity of shares, types of shares and value of each type held by founding shareholders (for joint stock companies);

dd) Rights and obligations of the members or partners (for limited liability companies and partnerships) or shareholders (for joint stock companies);

e) The organizational structure;

g) Quantity, titles, rights and obligations of each of the enterprise’s legal representatives;

h) Method for ratifying the company’s decisions; rules for settlement of internal disputes;

i) Basis and method for determination of salaries and bonuses of the executives and controllers;

k) Cases in which members/shareholders may request the company to repurchase their stakes/shares (For limited liability companies/joint stock companies);

l) Rules for distribution of post-tax profits and settlement of business losses;

m) Cases of dissolution; procedures for dissolution and liquidation of the company’s assets;

n) Procedures for revising the company's charter.

According to Article 3, Circular 116/2020/TT-BTC guiding a number of articles of Decree No. 155/2020/ND-CP dated December 31, 2020 of the Government guiding corporate governance applicable to public companies - Company charter:

Public companies should refer to the model charter in Appendix I hereof to formulate their own charters in accordance with the Law on Enterprises, the Law on Securities, the Government’s Decree No. 155/2020/ND-CP dated December 30, 2020 and relevant laws.

The company charter is considered a bylaw of the company, which stipulates all matters concerning the organizational structure, management and operation, shareholder rights and obligations, and the resolution of internal disputes. The charter of a joint stock company is built on basic legal documents such as the Law on Enterprises, the Law on Securities, the Law on Accounting, the Law on Investment, the Civil Code and guiding documents for enforcement and must not be contrary to law.

According to Clause 1, Article 154, Law on Enterprises 2020 - Term of office and quantity of members of the Board of Directors: “The Board of Directors shall have 3-11 members. The specific quantity of members shall be prescribed by the company's charter.

Thus, the maximum number of members of the Board of Directors of a joint stock company is 11 members. To avoid possible disagreements, the company's charter and governance regulations need to specifically stipulate the number, composition of the Board of Directors, rights, obligations, organization and coordination of activities of members of the Board of Directors.

In addition, to effectively arrange the schedule of Board of Directors meetings, the Board of Directors should have a regular meeting schedule, set the agenda, send documents in advance, and facilitate the Board of Directors to attend and vote at the meeting in other forms such as authorization, online voting or other similar forms (sending voting ballots to the meeting via mail, fax and email).

There are four levels and benefits of effective corporate governance. The first step to implement good corporate governance, companies must implement from Level 1 - Compliance with laws and regulations under the law: Ensure the rights of shareholders, fair treatment of shareholders, the role of stakeholders, information disclosure and transparency, the responsibility of the Board of Directors.

Companies (General Meeting of Shareholders, Board of Directors, Board of Management) need to focus on developing and issuing internal documents on corporate governance, which can comply with higher regulations and standards applicable to listed companies:

- Company charter according to the Law on Enterprises 2020, a model charter appended to Circular 116/2020/TT-BTC and other relevant legal regulations.

- Corporate governance regulations according to Circular 116/2020/TT-BTC applicable to public companies.

- Other internal regulations (business ethics, labor regulations, financial regulations, investment, risk management, etc.)

- Compliance with information disclosure obligations according to Circular 96/2015/TT-BTC - Guidance on Information Disclosure on the Stock Market.

Regarding corporate governance, companies must comply with the Law on Enterprises 2020, c1 the Law on Securities and instructive decrees (Decree 155/2020/ND-CP); Circular 96/2020/TT-BTC - Guidance on Information Disclosure on the Stock Market, regulations of specialized laws if any.

Clause 1, Article 157, the Law on Enterprises 2020 - Meetings of the Board of Directors

“The Chair of the Board of Directors shall be elected during the first meeting of the Board of Directors within 07 working days from the election of that Board of Directors. This meeting shall be convened and chaired by the member that received the highest number of votes. In case more than one member received the same highest number of votes, one of them will be elected by the members under majority rule to convene the meeting of the Board of Directors.”

Accordingly, the Chair of the Board of Directors shall be elected by the members of the Board of Directors of the new term within 07 working days from the date of the completed election of the Board of Directors of that term (from the effective date of the resolution of the General Meeting of Shareholders approving the list of members of the Board of Directors of the new term).

The Law on Enterprises does not stipulate how long the Head of the Supervisory Board must be elected from the date of completed election of the Supervisory Board of the new term. However, the Company Charter should provide the time limit for electing the Head of the Supervisory Board together with the time limit for electing the Chair of the Board of Directors, so that the Supervisory Board can quickly set up its organizational structure and perform its supervisory duties when the Board of Directors of the new term comes into operation.

According to Clause 9, Article 157, Law on Enterprises 2020 - Meetings of the Board of Directors:

“A member is considered attending and voting at the meeting of the Board of Directors in the following cases

a) Directly participate in and vote at the meeting;

b) Authorize another person to participate in and vote at the meeting as prescribed in Clause 11 of this Article;

c) Participate in the meeting and vote online or through other electronic methods;

d) Sends his/her vote to the meeting by post, fax or email;

dd) Send the votes by other means specified in the company's charter.”

For that reason, the Board of Directors can implement the online conference meeting method so that members can give opinions and vote on issues at the meeting. The Law on Enterprises 2020 also encourages enterprises to apply information technology to minimize costs and increase the success rate of the meetings of the Board of Directors or the General Meetings of Shareholders.

Regarding the minutes of the Board of Directors meeting, according to the provisions of Article 158, Enterprise Law 2020 - Minutes of the Board of Directors meeting, accordingly, the Minutes of the Board of Directors meeting must be prepared in Vietnamese and can be prepared in a foreign language, including the following main contents:

According to Article 158, Law on Enterprises 2020 - Minutes of meetings of the Board of Directors, the minutes shall be written in Vietnamese language, may be translated into foreign languages, and shall contain the following information:

a) The company’s name, company code, headquarters address;

b) Time and venue of the meeting;

c) Purposes and agenda of the meeting;

d) Full names of participating members and the persons authorized to participate in the meeting and how they participate; full names of non-participating members and their excuses;

dd) The issues to be discussed and voted on at the meeting;

e) Summary of comments of each participating member in chronological order;

g) Voting result, the members that cast affirmative votes, negative votes and abstentions;

h) Ratified decisions and corresponding ratio of affirmative votes;

i) Full names, signatures of the chair and the minute taker, except the case in Clause 2 of this Article.

The chairperson and the minute taker are responsible for the truthfulness and accuracy of the minutes of the Board of Directors' meeting. In the case of online meetings, the company may use additional audio or video recording to confirm that the contents of the meeting recorded in the minutes are truthful and accurate.

The law does not require companies to establish committees/subcommittees under the Board of Directors. However, according to Article 31 of Appendix I of the Company Charter applicable to public companies in Circular 116/2020/TT-BTC - Subcommittees under the Board of Directors, it is recommended that listed companies establish subcommittees to support the activities of the Board of Directors, specifically:

1. The Board of Directors may establish subcommittees that will take charge of development policies, personnel, wages and rewards, internal audit and risk management. The number of members of each subcommittee shall be decided by the Board of Directors with at least 03 persons that are members of the Board of Directors and external members. Independent members of the Board of Directors/non-executive members of the Board of Directors shall make up a majority of the subcommittee and one of these member shall be designated as the chief of the subcommittee under a decision of the Board of Directors. The subcommittees shall operate in accordance with regulations of the Board of Directors. A subcommittee's resolution is only effective when it is voted for by the majority of its members during its meetings.

2. The effect of decisions of the Board of Directors or its subcommittees shall be conformable with applicable regulations of law, the Company Charter and company administration regulations.

Whether it is necessary to establish subcommittees to support the Board of Directors or not depends on the size, complexity, professional expertise, and objectivity and transparency requirements regarding the issues that need to be decided by the Board of Directors. The Board of Directors should only establish subcommittees when the need arises, starting with the most essential committees/subcommittees such as the Internal Audit Committee and the Remuneration Committee.

In cases where companies do not establish subcommittees, the Board of Directors shall appoint responsible independent members of the Board of Directors from time to time. In both cases, whether establishing a committee/subcommittee or appointing independent members of the Board of Directors to be in charge of each issue, the charter or corporate governance regulations must clearly stipulate relevant compositions, functions, scope, and operating procedures of such committee or independent members of the Board of Directors.

According to Clause 1, Article 137, Law on Enterprises 2020:

 “1. Unless otherwise provided by the law on securities, a joint stock company has the right to opt out its own management and operation organization according to one of the following two models:

a) General Meeting of Shareholders, the Board of Directors, the Supervisory Board and the Director/General Director. In case a joint stock company has less than 11 shareholders and the shareholders are organizations owning less than 50% of the total shares of the company, having a Supervisory Board is not

b) General Meeting of Shareholders, the Board of Directors and the Director/General Director. In this case, at least 20% of the members of the Board of Directors must be independent members and there must be an Audit Committee under the Board of Directors. The organizational structure, functions and tasks of the Audit Committee are specified in the Company Charter or the regulations on the operation of the Audit Committee issued by the Board of Directors."

Thus, in case a joint stock company operates under a model without a Supervisory Board (but is not in a case where a Supervisory Board is not required), it must establish an Audit Committee under the Board of Directors.

According to Clause 3, Article 167, Law on Enterprises 2020:

“3. The General Meeting of Shareholders shall approve the following contracts and transactions:

…

b) Contracts and transactions that involve borrowing, lending, selling assets that are worth more than 10% of the company’s total assets according to the latest financial statement between the company and shareholders that hold at least 51% of the total voting shares or their related persons.

Thus, the Board of Directors can enter into a transaction contract worth up to 10% of its asset values with a parent company owning 51% or more of its charter capital. If the value exceeds this level, the Board of Directors must submit it to the General Meeting of Shareholders for approval. The Board of Directors shall submit a draft contract or transaction or explain the main content of the contract or transaction at the General Meeting of Shareholders or obtain written opinions from shareholders. In this case, shareholders with interests in connection with the parties to the contract or transaction shall not have the right to vote; the contract or transaction shall be approved in accordance with Clause 1 and Clause 4, Article 148 of the Law on Enterprises 2020 unless otherwise provided by the Company Charter.