On the Governance of State-Owned Economic Groups in Vietnam

Abstract

In this paper, we diagnose the current status of state-owned enterprises (SOEs) in Vietnam, identify their key governance challenges, and recommend policy directions in light of Korea’s and other countries’ experiences. Among various types of SOEs in Vietnam, we limit our focus to economic groups introduced since 2006. We recommend (i) to re-clarify the objective of economics groups, (ii) to reconcile the conflicting objectives, (iii) to expand and strengthen the role of SCIC, (iv) to strengthen the internal governance mechanism, (v) to develop a well-functioning capital market, (vi) to limit the diversification into non-core business areas, (vii) to enhance the transparency of ownership structure, and (viii) to strengthen the protection of minority shareholders.