The Vietnam Chamber of Commerce and Industry (VCCI) in collaboration with the Vietnam Association of Corporate Directors (VACD) recently organised at a workshop entitled “Corporate governance and restructuring to overcome difficulties, continue development” in Hanoi in a bid to support businesses with more experience in corporate restructuring and governance in the current context of economic difficulty.
According to statistics, nearly 54,000 companies filed for bankruptcy or operational suspension in 2011 while the number of business collapses reached 30,000 in the first seven months of 2012. Mr Ha Manh Tien, Chairman of the Vietnam Association of Corporate Directors (VACD), said: Not all companies go bankrupt because of cash shortage. Many go bust because of poor administration and restructuring strategies. According to domestic and international experts, the outlook is likely to be dismal in the last months of 2012 and 2013. This is one of the difficulties Vietnamese enterprises, particularly small and medium ones, need to take into consideration to seek way-outs.
Master Nguyen Thi Nam Phuong, Head Consultant at OCD Company, said: At present, many Vietnamese enterprises have not shaped development strategies and enhanced corporate governance capacity, even at executive levels.
She said when she worked with big Vietnamese companies, many branch directors did not care about strategy building because they thought that this matter was out of their concern and because it belonged to supreme body, the board of directors. Ms Phuong added that strategy is particularly necessary for companies in the time of hot development or excessive inefficiency and in need of long-term orientation. Otherwise, they lack focus and spend too much resource on business operations. The efficiency of individual business field is low, which will give bad impact on their brand names. Especially, they should not think that only big companies need development strategies and governance enhancement while smaller ones do not need. At present, unprofessional business planning, excessive business diversification, unclear business restructuring, non-transparent information about stakeholders and unprofessional accounting system are the barriers that many Vietnamese businesses are facing.
Hence, according to Ms Phuong, companies need good strategy building and strategy management. When they carry out strategy building and strategy management, they necessarily reach agreement in aspects mentioned. They can also hire think-tanks for these jobs to seek valuable advice.
Dr Dinh Van Hien, General Director of DKNEC Automatic Measurement Electrical Mechanical Company, said: Businesses need to build automatic systems for corporate governance and operation. This will help them save time and cost. He introduced his company’s totally automatic system for corporate governance and operation, DME. This technological application creates “through” collaboration in all processes from management to production, thereby reducing waiting time and increasing labour productivity and profitability.
Mr Pham Quoc Manh, Deputy General Director of Phu Thai Group, said: To successfully restructuring a business, its leaders must first of all have innovative thinking. In addition, headcount reduction and operational streamlining not only help reduce wage burdens but also cut down office renting areas. Staff cut means cutting down a lot of things.
However, Dr Dinh Thi My Loan, General Secretary of the Association of Vietnamese Retailers, said, there are no common ‘denominator’ for corporate governance and restructuring. Each business should have its own suitable strategy.
Quynh Anh
Vietnamese
