- Organizational structure, governance and control of the company
Pursuant to the provisions of Article 11 Section V of Appendix I promulgated together with Circular 116/2020/TT-BTC, the organizational structure, governance and control of the company applicable to public companies is as follows:
“1. General Meeting of Shareholders.
- [Board of Directors, Control Board (in case the company organizes management and operates according to the model of Point a, Clause 1, Article 137 of the Law on Enterprises)].
- [The Board of Directors, the Audit Committee under the Board of Directors (in case the company organizes management and operates according to the model of Point b, Clause 1, Article 137 of the Law on Enterprises)].
- Director (General Director).“
| Structure | General Meeting of Shareholders | Board of Directors | Board of Supervisors | Audit Committee under the Board of Directors |
| Definition | The General Meeting of Shareholders consists of all shareholders with voting rights, is the highest decision-making body of a joint-stock company.
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The Board of Directors is the management body of the Company, has full power on behalf of the Company to decide and exercise the rights and obligations of the company, except for the rights and obligations under the competence of the General Meeting of Shareholders. | The Supervisory Board has the same duties as the judiciary in the separation of powers model to help shareholders control the governance and management of the company. | The audit committee is a committee under the Board of Directors, whose function is to advise and assist the Board of Directors in ensuring an effective system of internal control and legal compliance; fully meet the requirements of external financial reporting, Includes requirements applicable to listing on the stock exchange. |
| Position, role | The General Meeting of Shareholders plays an important role in ensuring transparency, accountability and shareholder participation in the management and decisions of public companies. | The board of directors plays an important role in shaping and overseeing the performance of a public company, ensuring that the company operates efficiently and benefits shareholders and the community. | Security controls play an important role in protecting shareholder interests and ensuring transparency and honesty in the financial performance of public companies. This enhances shareholder and other stakeholders’ confidence in the company. | In the organization of a public company, the Audit Committee is an integral part of ensuring transparency, honesty and confidence of shareholders and the market about the financial position of the company. |
- Meaning and role of the governance structure of public companies
It can be seen that corporate governance is a framework in which the Board of Directors has a key role as a bridge between shareholders and those who directly manage/operate the company as well as between the company and other stakeholders. The organizational structure of the governance of a public company is the established system of agencies, divisions and processes for managing and administering the company’s activities. Therefore, the organizational structure of governance in public companies has a very important meaning and role. Because, the organizational structure of governance has set out a clear structure and divided roles and responsibilities among departments and agencies in the company. This helps create consensus and guidance in the company’s operations in a rigorous and effective manner. In addition, the governance organizational structure is designed to optimize the company’s operations and enhance performance. Clearly defined processes and regulations help ensure flexibility and efficiency in day-to-day decisions and operations. In summary, the governance organizational structure of a public company is not only a system of dividing roles and responsibilities but also an important tool for creating consensus, enhancing accountability and transparency, improving performance, and protecting shareholder interests.
- The importance of maintaining and developing an effective governance structure
Overall, having a good governance system will help the company achieve long-term success. This is not only for the benefit of shareholders but also for the interests of entities dealing with the company and wider society. Maintaining and developing an effective governance structure is critical to the success and sustainability of an organization. In order to maintain and develop the organizational structure effectively, it is necessary to enhance the performance and performance of that management organization. Besides, it needs to be more flexible and effective in facilitating development and innovation. To create a positive working environment and encourage creativity and discovery. In addition, for an effective governance structure, transparency and accountability are needed, which contributes to creating trust and confidence from shareholders, investors and other stakeholders.
In conclusion, maintaining and developing an effective governance organizational structure is critical to ensuring the success and sustainability of an organization. It not only enhances performance and operational efficiency, but also creates transparency, protects shareholder interests, and facilitates growth and innovation.
Above is the content of KALF’s advice on the organizational structure of public company governance, and some related legal issues. All of our above advice opinions are based on applicable legal provisions. If you have any questions or requests about legal issues, please contact us for timely answers.
