Decree 71/2017 provides for a various corporate governance rules applicable to public joint stock companies in Vietnam. Decree 71/2017 takes effect from 1 August 2017. Below is a detailed comparison between Decree 71/2017 and the old corporate governance rules under Circular 121/2012 of the Ministry of Finance. This post is contributed by Ha Thanh Phuc and Nguyen Hang Nga, legal interns at Venture North Law.

Issues	Circular 121/2012	Decree 71/2017
Definition	Related persons are individuals, organizations provided in Article 6.34 of the Securities Law.	Related persons are individuals, organizations provided in Article 4.17 of the Enterprise Law and Article 6.34 of the Securities Law. The combination of two definitions of related persons could make it very difficult to determine the list of related persons of a public joint stock company.
Internal Governance Policy	The Board is responsible for devising and issuing the Internal Governance Policy. This regulation is applied to large-scale public companies and listed companies.	The Internal Governance Policy is devised by the Board and ratified by the Shareholder Meeting. The Ministry of Finance will issue a Model Policy for public companies’ reference. The Internal Governance Policy provision is applicable to all public companies, not just large-scale companies or listed companies
Shareholder Meetings	The public company must disclose information regarding the finalization of the list of shareholders entitled to attend the Shareholder Meeting at least 5 days before the final registration date.	The public company must disclose information regarding the registration of shareholders entitled to attend the Shareholder Meeting at least 20 days prior to the final registration date.
Board Member Qualification	The board member of a large-scale public company or listed company cannot concurrently be Board member of more than 5 other company, unless he/she is a Board member of companies within a corporate group, or a representative of fund manager, securities investment company.	The board member of a public company cannot be concurrently a member of the Board of more than 5 other companies. This provision takes effect from 1 August 2019.
Board Member Qualification	The Chairman of the Board cannot concurrently be Director (General Director) unless approved each year by the annual Shareholder Meeting.	The Chairman of the Board cannot concurrently be Director (General Director) of the same public company. This provision takes effect from 1 August 2020.
Board Makeup	The structure of the Board must ensure a balance between the members having knowledge and experience in law, finance, and business sector of the company.	The structure of the Board must ensure a balance between the members having knowledge and experience in law, finance, and business sector of the company, with consideration to gender diversity.
Board Makeup	No equivalent provisions	If a unlisted public company operates under the model provided in Article 134.1(b) of the Enterprise Law, at least 1/5 of total members of the Board must be independent members. If the Board is composed of less than 5 members, there must be 1 independent member. [This provision is carried over from Article 134.1(b) of the Enterprise Law with a minor tweak]
Board Makeup	At least 1/3 of a total number of the board members of a large scale or listed public company must be independent members.	Independent members must account to at least 1/3 of the board members of a listed public company.
Board Makeup	If a board member cannot continue serving at the Board, the Board may appoint another person to be a temporary board member in accordance with the company charter. The new election of a substitute member must be implemented at the next general shareholder meeting.	No equivalent provision.
Meetings of the Board	No equivalent provisions	Each year, the Board requests its independent member to report on the operation of the Board, and this report may be disclosed at the annual Shareholder Meeting.
Meetings of the Board	The secretary and the attending Board members must sign in the meeting minutes.	The chair of the meeting and the minutes drafter must sign in the meeting minutes.
Responsibilities of the Board	The Board has to devise an assortment of corporate governance regulations.	The Board has to devise the Internal Corporate Governance Policy. [It is likely that the regulations prescribed in Article 14.4, 14.5, and 14.6 of Circular 121 will be included in the Internal Corporate Governance Policy as the Article 31 of Circular 121/2012 suggests likewise. Nevertheless, it would be prudent to wait for official guidance on the Internal Corporate Governance Policy from the Ministry of Finance before making any conclusions.]
Subcommittees of the Board	The Board needs to set up subcommittees to support the Board, including development policy sub-committee, human resource sub-committee, salary sub-committee, and other special sub-committees according to Shareholder Meeting’s resolutions. If no sub-committee is established, the Board will appoint independent board members to be in charge of each issue separately, such as salary and personnel. [This regulation is only applied to large-scale public companies and listed companies.]	The Board of the listed company may set up subcommittees to support the Board, including human resource sub-committee, salary sub-committee, and other sub-committees. The establishment of such sub-committees must be approved by the Shareholder Meeting. If no sub-committee is established, the Board may deploy independent members to help the Board with human resource and salary issues. [This regulation is confined to listed companies]
Company manager or company management supporter	The Board must appoint at least one Company Secretary with legal understanding to ensure the efficiency of company management. The Company Secretary must not concurrently work for the auditing firm which currently audits the company’s financial statements.	The Board of a listed company must appoint at least one person with legal understanding to ensure the efficiency of company management to perform responsibilities of a Company Manager. The Company Manager must not concurrently work for the auditting firm which currently audits the company’s financial statements. The Company Manager can concurrently act as the Secretary of the company.
Inspectors Qualification	An Inspector cannot be member or employee of the independent audit company that is auditing financial reports of the company.	An Inspector cannot be member or employee of the independent audit company that has audited financial reports of the company for the past 3 years.
Inspectors Qualification	There must be at least 1 member of the Inspection Committee to be an accountant or auditor. This provision is applicable to all public companies.	In the case that the State owns more than 50% of the charter capital of the public company and the listed company, an Inspector must be either an accountant or an auditor. [This provision is carried over from Article 164.2 of the Enterprise Law 2014 with the scope of application extended to public companies]
Inspectors Qualification	The Head of the Inspection Committee must be a professional accountant.	The Head of the Inspection Committee must be a professional accountant or auditor, and must work at the company. [This provision is carried over from Article 163.2 of the Enterprise Law 2014]
Obligations of the Inspection Committee	The Inspection Committee must report to the State Securities Commission if a violation of the Board members, Directors (General Directors), and other managing officers is not ceased and its consequences are not mitigated after seven days from the date of notification.	No equivalent provisions
Quantified control power regarding related party transactions	The transactions between the company or subsidiaries of the public company and its managing officers must be reported to the Board for approval.	The transactions between the company or subsidiaries which the public company holds at least 50% charter capital and its managing officer must be reported to the Board for approval.
Exemptions regarding related-person transactions	The public company cannot provide loans and guarantees to members of the Board, members of the Inspection Committee, Directors (General Directors), other managing officers, and related persons thereof unless approved by the Shareholder Meeting. The public company cannot provide loans and guarantees to shareholders and their related persons.	In case the public company is a credit institution, it is permitted to provide loans and guarantees to individual shareholders and related persons thereof. A public company can provide loans and guarantees to institutional shareholders and individual related persons thereof in the following cases: (1) the public company is a credit institution, or (2) the shareholder is a subsidiary whose shares or portions of capital are not owned by the State; and which has bought shares of and contributed capital to the public company before 11 July 2015 according to Article 16.6 of Decree 96/2015. A public company can provide loans and guarantees to institutional related persons of shareholders in the following cases (1) the public company is a credit institution; (2) the public company and the institutional related persons are of the same group or companies operating as a corporate group; and the Shareholder Meeting or the Board approves this transaction according to the company charter; or (3) other cases prescribed by law. A public company can provide loans and guarantees to Members of the Board, Inspectors, Directors (General Directors), other managing officers, and related persons thereof in the following cases: (1) the public company and the institutional related persons are of the same group or companies operating as a corporate group; (2) the Shareholder Meeting approves those transactions; or (3) other cases as prescribed by specialised law. Unless approved by the Shareholder Meeting, the public company cannot execute the transaction which makes the aggregate transaction of more than 35% of the total assists recorded in the latest financial report with the following entities: (1) Members of the Board, Inspectors, Directors (General Directors), other managing officers, and related persons thereof; (2) Shareholders, authorized representatives of shareholders owning more than 10% of total ordinary shares of the public company, and related persons thereof; or (3) Enterprises relating to the entities provided in Article 159.2 of the Enterprise Law.
Lard scale public companies	Circular 121/2012 sets out a chapter to address various aspects of corporate governance of large-scale public companies and listed companies.	Decree 71/2017 sets out no separate regulations on large-scale public companies and a few on listed companies.
Report and disclose information about the organizational structure of the company	No equivalent provisions	The public company must report to the State Securities Commission and Stock Exchange Centers, and disclose information regarding organizational structure of the company according to Article 134 of the Enterprise Law 2014. In case of changes to the organizational structure, the public company must report to the State Securities Commission and Stock Exchange Centers, and disclose that information within 24 hours from the moment the Shareholder Meeting issues decision approving the changes.
Other obligations regarding information disclosure	No equivalent provisions	The public company must devise and issue the information disclosure policy according to the Securities Law and its guidance. The public company must employ at least one employee to disclose information.

Vietnam Business Law