Under the Enterprise Law, the General Director of a joint stock company (JSC) has the authorities to decide all issues relating to the “day-to-day business operation” (công việc kinh doanh hàng ngày) of the company not requiring resolutions of the Board. One key issue about the authorities of the General Director is to decide which activities of a company constitute day-to-day business operation.

One may argue that all activities of the company which are not subject to the authorities of the Board or the Shareholders’ Meeting should be considered as “day-to-day business operation”. On the other hand, deciding whether an activity is day-to-day business operation is a case by case decision subject to actual business of the company. The latter view appears to be the more prudent view  because:

• under the Enterprise Law, the Board has the authority to decide on any matter relating to the company which is not subject to the authorities of the Shareholders Meeting. Therefore, it is difficult to know which matters are not within the authorities of the Board; and
• the Board has authority to supervise and direct the General Director in conducting the day-to-day business operation of the company. Based on this provision, the Board may reject any matter already decided by the General Director if the Board considers that such matter is not a day-to-day business operation of the company.

To address the ambiguity on day-to-day business operation, the charter of a JSC should clearly determine what constitutes a day-to-day business operation and be subject to the General Director’s authorities.