On June 6, 2017, the Government issued Decree 71/2017/ND-CP providing guidance on corporate governance applicable to public companies.
Accordingly, regarding the structure of the Board of Directors, in addition to ensuring a balance between members with knowledge and experience in law, finance, and the company's business operations, gender considerations are also taken into account.
At the same time, the membership requirements for the Board of Directors have changed compared to the current regulations as follows:
– From August 1st, 2020, the Chairman of the Board of Directors is not allowed to simultaneously hold the position of Director (General Director) of the same public company (currently, this is still permitted if approved annually at the Annual General Meeting of Shareholders);
– From August 1st, 2019, a member of the Board of Directors of a public company may not simultaneously be a member of the Board of Directors of more than five other companies.
The auditor is not allowed to work in the company's accounting or finance department.
According to the Decree 71 / 2017 / ND-CP A public company must have 03-05 auditors who meet the requirements of Clause 1, Article 164 of the 2014 Enterprise Law, the company's charter, and do not fall under the following cases:
– Auditors are not allowed to work in the company's accounting or finance department.
- Not a member or employee of the independent auditing firm that audited the company's financial statements for the three consecutive years prior to the audit.
– For listed companies and public companies in which the State holds more than 50% of the charter capital, the Supervisory Board must be an auditor or accountant.
The head of the Supervisory Board must be a professional accountant or auditor and must work full-time at the company.
Therefore, the new regulations do not allow accountants to simultaneously hold the position of auditor from the date Decree 71/2017/ND-CP came into effect (August 1, 2017).
Download Decree 71/2017/ND-CP: https://goo.gl/yM5z9R
