BCI - Barometer to Corporate Governance

2:15:00 PM | 2/10/2019

 “Selecting listed companies for the BCI index is appropriate. This is the best part of the Vietnamese market, which is qualified for both performance and transparency. Listed companies are the barometer for Vietnamese businesses as a whole,” said Dr. Vu Tien Loc, President of the Vietnam Chamber of Commerce and Industry (VCCI), at the Announcing and Awarding Ceremony of Best Corporate Governance - Finance Index to listed companies in Hanoi.

Since 2013, under the direction of VCCI, the Business Forum Newspaper has worked with the Institute of Business Studies and Development (INBUS), the Vietnam Association of Accountants and Auditors (VAA), and the Vietnam Association of Corporate Directors (VACD) to launch the Vietnam the Best Company Program (BCI).

The annual surveying and benchmarking program is based on 21 financial criteria relating to all business aspects of 1,566 listed companies in Vietnam classified into 32 economic sectors. Based on their audited financial statements of 2018 the program used a comprehensive assessment method to ensure accurate and objective results.

He said, analysis, assessment and ranking results are important for enterprises to know their “health” to address limitations and carry out development solutions in the next period. In particular, these results will also be important indicators for shareholders and stock investors. This is considered the direction for them to scale up capital for business operations from sources other than banks.

Dr. Loc added, VCCI will request the program organizers to expand and diversify survey and evaluation forms to have a more realistic view of business capacity for the given period so as to illustrate the “health” of enterprises with BCI.

Dr. Nguyen Manh Quan, Director of the Institute of Business Studies and Development, said that, on scientific basis, industry and company research, using the BCI Index, is a very popular method in the world and proven to be practical. This methodology is adapted for the Global Competitiveness Index (GCI) by the World Economic Forum (WEF), the Global Innovation Index (GII) by INSEAD, the S&P 500/1000 by McGraw-Hill, the Fortune 500 by Fortune, and the VNR 500 by Vietnam Report Joint Stock Company.

He said, corporate information is not only useful for businesses from a system perspective but also useful as standard criteria for others to determine market capitalization, financial management, capital investment and business connections.

“Contributions of businesses to the Vietnamese economy have increased significantly in recent years. However, when we consider each criterion, their contributions have not yet met expectations. Therefore, to make a breakthrough, a lot of efforts should be made,” Mr. Quan added.

Ms. Ta Thi Tue Anh, Director of HSBC Vietnam - Hanoi Branch, said that many Vietnamese businesses have, in fact, not adopted electronic payments owing to cybersecurity concerns. However, at present, some banks have invested much in technology to enable swift connectivity for customers and reduce time and risks in traditional payment methods. Therefore, in order to improve governance quality, especially in corporate finance management, chief financial officers (CFOs) should plan to use digital management services and electronic payment to improve operational quality and reduce cost.

In 2019, VCCI and relevant units have conducted surveys and assessments, announced and awarded certificates to top-rated companies in 32 economic sectors and best financially managed companies in Vietnam's stock exchange in 2018, especially, top 10 listed companies with best governance. This is a timely recognition and encouragement for well-managed businesses.

The top 10 listed companies with best governance in 2018 not only have the best financial capacity but also have reputable brands, large market capitalization; best human resource management, large market share, good revenue and stability.

Anh Mai