ASEAN Corporate Governance Scorecard findings indicate Vietnam needs improvement in board responsibilities and minority shareholder protections, underscoring the urgency of the Code to boost market attractiveness.

SECO notes the CG Code 2026 aligns Vietnam with international best practices, strengthens sustainability integration, and supports deeper international market integration amid a changing global business environment.

Vietnam launches the Vietnam Corporate Governance Code 2026, built on G20/OECD standards, to upgrade governance quality and attract foreign investment as the market targets a reclassification from Frontier to Emerging status.

The code’s core is a nine-principle, board-centric framework that emphasizes clear board responsibilities, independence, diversity, risk management, internal controls, and enhanced disclosures to protect shareholder rights and align with ESG factors.

A key innovation is the Comply or Explain mechanism, requiring listed firms to meet higher standards and publicly explain any non-compliance in annual reports, preserving transparency while offering flexibility.

Sustainability and ESG considerations are embedded, including climate governance and environmental and social responsibilities.

IFC notes that higher governance standards correlate with stronger performance and better decision-making, while SECO highlights heightened investor demand for transparency and trust.

The SSC will coordinate with stock exchanges to consider the code as a priority criterion for index inclusion to promote high-governance assets.

The code strengthens the control environment and risk management across listed and public companies.

Nine core principles place the board of directors at the center, stressing independent and diverse composition, strategic oversight, risk management alignment, and robust internal controls.

The CG Code 2026 reduces the previous ten principles to nine while expanding coverage on modern governance issues and enhancing disclosures, shareholder rights, and ESG integration.

Overall, the framework is principles-based, with stronger independence, risk management, transparency, and protection of shareholder rights centered on the board.