Cơ chế đại diện chủ sở hữu vốn nhà nước trong các doanh nghiệp ở việt nam TT t anh

HO CHI MINH NATIONAL ACADEMY OF POLITICS

NGUYEN THI MINH PHUONG

MECHANISM OF REPRESENTATIVE OF STATE
CAPITAL OWNER IN ENTERPRISES IN VIETNAM

SUMMARY OF DOCTORAL THESIS
FIELD OF STUDY: POLITICAL ECONOMY
Code: 62 31 01 02

HA NOI - 2018


The thesis was completed at
Ho Chi Minh National Academy of Politics

Supervisors: 1. Assoc. Prof., Dr. Do Xuan Thuy
2. Dr. To Quang Thu

Review 1:

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Review 2:

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Review 3:

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The thesis shall be defended in front of the Thesis Committee at
Academy level at Ho Chi Minh National Academy of Politics
At...... hour....... date...... month...... year 2018

The thesis can be found at: the National Library and
the Library of Ho Chi Minh National Academy of Politics


1
INTRODUCTION
1. The necessity of the thesis
The sixth Congress of the Communist Party of Vietnam (December 1986)
proposed a policy of economic management reform: "to eliminate bureaucracy,
subsidize and develop a new mechanism in line with the law objective and with
the development level of the economy, "thereby posing a requirement for reform
of state-owned enterprises (SOEs). Resolution No. 3 of the Ninth National
Congress (2001) states that the state management agencies must step up the
restructuring and raise the efficiency of SOEs, resolutely terminating the state
administrative agencies directly and specifically intervene in production and
trading activities of the business; To clearly define the economic management
right of the State and the management of production and business of the
enterprise; The resolutions of the 10th, 11th, XIIth Congress continue to affirm
the right to "Strengthen the State management and management of owners (SOs)
for SOEs. Arrange the right leaders, improve the management capacity and
business efficiency of enterprises. Resolutions of the 5th plenum of the XIIth
Central Committee: "To urgently set up a specialized State agency acting as

representative of the State budget for SOEs to exercise the rights and
responsibilities of the representatives of State Owned Enterprises." To concretize
the Party's policy; The National Assembly has promulgated the Law on
Enterprises, the Law on Management and Use of State Capital to invest in
production and trading activities at enterprises; The Government issued decrees
to strengthen the management, inspection and supervision of representatives of
state capital in SOEs.
Currently, SOEs in Vietnam have managed a large amount of resources,
accounting for a high proportion of the economy. The development of SOEs is
particularly important for the development of the entire economy. Over the years,
the State has tried, reformed and reorganized SOEs and achieved certain
achievements. However, the performance of SOEs is limited. Many enterprises
still fail to meet the requirements of international economic integration and not
match the state investment; Business losses, unable to preserve capital, can not
pay debts, many cases of party cadres who are key cadres assigned to stateowned representatives violated the party discipline, there are law violations,
including cases being expelled from the Party or even received the death penalty.
The causes of low business performance of SOEs have been pointed out, but one
of the most important reasons is that the mechanism of representation of state
capital in enterprises has many shortcomings, showned in the identification of the


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entity and authority; inspecting and supervising the representatives of state
capital in enterprises. Therefore, the issue of "Representative mechanism of state
capital in enterprises in Vietnam" was selected as the topic of doctoral thesis in
political economy.
2. Research purposes and research tasks
2.1. Research purposes
Clarifying the basic theoretical issues on the mechanism of representation
of state capital in enterprises; Based on that analysis and assessment of the status

of representation mechanism of state capital in enterprises in Vietnam in the past
time; Proposing views and solutions to improve the mechanism of representing
state capital in enterprises in Vietnam in the coming time.
2.2. Research tasks
Firstly, analyzing and systematizing to clarify the theoretical basis for the
representation mechanism of state capital in the context of a socialist-oriented
market economy.
Secondly, to study the experience of state capital representation
mechanisms in enterprises in some countries and to draw lessons for perfecting
the mechanism for representation of state capital in enterprises in Vietnam. .
Thirdly, performing analysis and assessment of the state of representation
mechanism of state capital in enterprises in Vietnam over the past time draws
advantages, limitations and causes of limitations.
Fourthly, proposing specific viewpoints and solutions to improve the
mechanism of representing state capital in enterprises in Vietnam in the
coming time.
3. Research subjects and scope of research
3.1. Research subjects
The research subject of the thesis is the representation mechanism of state
capital owner as a whole of factors including the economic and legal relations
between the State and the collectives and individuals who are empowered by the
State State-owned capital in SOEs.
3.2. Research scope
The title is associated with "state capital in enterprises in Vietnam", in
which the term "enterprise" is understood as SOEs as state owned enterprises.
The scope of theoretical research is that state-owned enterprises, however, have a
very broad range of state-owned enterprises. Therefore, the thesis only focuses
on illustrating the current status of the representation mechanism of the state
capital owner in some enterprises that have 100% state capital.

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- Regarding space: Focus on the mechanism of representation of state
capital in SOEs in Vietnam.
- In terms of time: 2010-2016 period; referring to and consulting the
documents before 2010 and after 2016 for the comparison and evaluation.
4. Research Methodology
4.1. Methodology
The thesis uses the methodology of dialectical materialism and the
historical materialism of Marxism-Leninism.
4.2. Specific research methods
This includes: scientific abstract method; Logical method combined with
history; Methods of analysis, synthesis, inductive, interpretive, statistical,
comparative. In addition, the dissertation uses the method of summing up the
practice to study and evaluate the mechanism of representation of state capital in
enterprises in Vietnam.
4.3. Source of research information
Including scientific information in research works related to
representatives of state-owned capital in enterprises of domestic and foreign
authors; information and statistics from reports from research institutions,
relevant agencies of the Party Central Committee, state management agencies,
state owned representative agencies in state-owned enterprises mainly in the
period 2010-2016.
5. New scientific contributions of the thesis
- Contributing to further clarify the concept and content of the mechanism
for representation of state capital in enterprises in Vietnam; Analyze and clarify
the factors that influence the representation mechanism of state capital in
enterprises.
- Assess the status of state capital representation mechanism in enterprises
in Vietnam from 2010 to 2016.

- Proposing key ideas and solutions to improve the mechanism of
representing state capital in enterprises in Vietnam in the coming time to 2030 in
order to contribute to ensuring the operating conditions of SOEs. The State's
capital in enterprises is appropriately owned, managed and used, preserved and
not lost, embezzled, corrupted or wasted.
6. Structure of the thesis
In addition to the introduction, conclusion and list of works published by
the author relating to the dissertation, list of references and annexes, the contents
of the dissertation are divided into 4 chapters and 14 sections.


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Chapter 1
OVERVIEW OF RESEARCH SITUATION
RELATED TO THE MECHANISM OF REPRESENTATIVES OF
STATE CAPITAL OWNERS IN ENTERPRISES
1.1. FOREIGN RESEARCH PROJECTS CONCERNING THE MECHANISM
FOR REPRESENTATIVES OF STATE OWNED CAPITAL IN ENTERPRISES

1.1.1. State ownership and ownership of state capital in enterprises
Kar-Marx, Capitalism Critique of Political Economy, 3rd Book: The Whole
Process of Capital Production; Professor Coc Thu Duong: The New Theory of
Socialist Economics; Prof. Trau Dong Dao (Editor): China's Economic
Development and Reform (China Development Reform) Report - 30 Years of
China's Open Reform (1978-2008); Professor Dong Duc Cuong: The
transformation of ideological views since the reform was opened up to now.
1.1.2. The appointment, inspection and supervision of representatives
of state capital owners in State enterprises and reform of State-owned
enterprises
OECD (2005): OECD Guidelines on Corporate Governance of StateOwned Enterprises (OECD Guidelines); Department of Finance and

Deregulation, Australian Government (December 2011): Commonwealth
Government Business Enterprise Governance and Oversight Guidelines; UNICO
(UK) Limited (2013): Report No. 2- Comparative World Experience Report on
State Capital Management for the Asian Development Bank and the Ministry of
Finance under Project ADB TA-8016 VIE: Strengthening support to the SOE
Reform and Corporate Governance Program (39538-034); Prof. Trau Dong Dao
and Dr. Au Duong Nhat Huy: 30 Years of Reforming the State of Private
Ownership and Economic Development in China; UNDP in partnership with the
Ministry of Foreign Affairs of Vietnam and the Vietnam Academy of Social
Sciences (2014): International Conference on Economic Reform for
Comprehensive and Sustainable Growth, International Experience and Lessons
for Viet Nam year 2014; Prof. Gary H. Jefferson, Brandeis University: SOE
Reform - Lessons for Vietnam; Professor Zhang Jun, Fudan University, China:
China's SOE Reform - Policy, Process and Assessment; By Laksamana Sukardi,
Former Minister of Indonesian SOE Investment and Development: Indonesia
SOE Reform Experience


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1.2. DOMESTIC RESEARCH WORKS CONCERNING THE MECHANISM
FOR REPRESENTATIVES OF STATE OWNED CAPITAL IN ENTERPRISES

1.2.1. Study on representation of owners of state capital in enterprises
and models of ownership representation of state capital in enterprises
National Science Project KX04.09 / 06-10, period 2006-2010: Ownership
in the socialist-oriented market economy of Vietnam chaired by Prof. Dr.
Nguyen Ke Tuan. The state-invested enterprise book- adjusting law and
ownership model according to international experience, led by Dr. Dr. Tran Tien
Cuong, Central Institute for Economic Management (Editor), published in 2005.
The book (reference) Renovation of the representative model of representatives

of State-owned enterprises for SOEs: National Theories and Experiences applied
and applied in Vietnam by authors Nguyen Dinh Cung and Bui Van Dung,
Central Institute for Economic Management (co-editors), published in 2013; PhD
thesis in Economics, Academy of Finance: State capital management mechanism
for investment in enterprises in Vietnam by Pham Thi Thanh Hoa (2012); PhD
thesis in Economics, Ho Chi Minh National Political Academy: State capital
management in SOEs in Da Nang City by Nguyen Thi Kim Doan (2016); PhD
thesis in economics, Ho Chi Minh National Political Academy: The mechanism
of management of public property in the administrative and professional sector in
Vietnam by Nguyen Manh Hung (2014); The draft law on management and use
of state capital invested in production and business of the Government shall be
submitted to the XIIIth National Assembly, at its seventh, eighth session (2015);
Dr. Nguyen Ngoc Thanh (2010), Issues of owner and Representatives - Some
policy implications for Vietnam; Assoc. Prof., Dr. Tran Viet Lam (2013)
Representation theory, game theory and problem Representation of state capital
in enterprises.
1.2.2. Study on the mechanism for inspecting and supervising
representatives of state capital owners in state enterprises
The book explores the abnormal relationship between a section of cadres,
party members in office, the right to profit from businesses (Reference Book)
and the book Some solutions to limit the relationship. It is normal for a part of
cadres and party members to have rights with profiteers in Vietnam by Dr. Le
Hong Liem (Editor), National Politics Publishing House 2014; The book on
Current Trends and Solutions for Prevention of "Group Benefits" in Vietnam
(Reference Paper), National Political Publishing House 2015; Ministry of
Finance, Ministry of Finance: State financial supervision of SOEs and state
owned enterprises in Vietnam: Current status and solutions of Assoc. Prof. Dr.
Bui Van Van and MSc. Dang Quyet Tien (co-head of the project); Proceedings

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of the Scientific Conference on Financial Monitoring for SOEs and SOEs in
Vietnam - Current status and solutions by the Finance Academy in 2015.
1.2.3. Research on state-owned enterprises and reform, reform of SOEs
The SOE book in the socialist-oriented market economy, the Scientific
Council of the Central Party Agencies and the Hanoi Business Association,
National Political Publishing House published in 2013; Success and costly
lessons of SOEs, by Assoc. Prof., Dr. Le Quoc Ly, Editor of National Political
Publishing House 2014; SOE Book and Distorting Market of the Vietnam
Competitiveness-Enhancing Economic Competitiveness (RCV), published in
2015; 2007, Central Institute for Economic Management, Ministry of Planning
and Investment: Continuing to renovate and implement the function of Stateowned capital investment in enterprises of the Ministry of Planning and
Investment. Pham Duc Trung; Ministry of Finance: A solution to improve the
efficiency of state capital management at current economic groups of Vietnam.
Do Thi Thuc and Dr. Nguyen Thi Thu Huong (co-host); Ministry of Finance:
Solutions to improve the efficiency of state capital investment management in
post-equitization enterprises (SOEs). Hoang Duc Long, PhD. Do Thi Thuc (cohost); Corporate Finance Department, Ministry of Finance: Assessing the real
state of the SOE system of author Tran Huu Tien (project leader); Proceedings of
the International Conference on Economic Reform for inclusive and sustainable
growth, international experience and lessons for Vietnam, in 2014 by UNDP in
cooperation with the Ministry of Foreign Affairs and the Vietnam Academy of
Social Sciences held in Hanoi; Workshop on SOE Renovation and Private
Economic Development organized by Center for Economic Information (Central
Economic Department) in collaboration with Research Institute for Brand
Strategy and Competition held on 30-5-2017 in Ha Cabinet.
1.3. COMMENT OF THE RESULTS OF THE RELATED PUBLISHED
WORKS AND IDENTIFYING PROBLEMS NEED RESEARCHING OF
THE THESIS

1.3.1. Theoretical and practical results that have been achieved

The above-mentioned domestic and foreign researches on theoretical and
substantive explanations on the ownership and ownership of SOEs; SOE Reform
... Some of the theoretical and practical issues of SOEs in the market economy
have been clarified, the need for state ownership of state capital in enterprises
through representation of state capital in enterprises in some countries in the
world as well as in Vietnam. At the same time, many published scientific papers
have focused on the state of SOEs' performance in the market economy, drawing
on the achievements and limitations and pointing out some shortcomings in the


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mechanism of representation. Ownership of state capital in the enterprise as the
cause of reducing the efficiency of enterprises with state capital. The thesis will
inherit and use these contents to analyze and evaluate the mechanism of
representing state capital in enterprises in Vietnam.
1.3.2. The gap needs to be supplemented and further refined in the
representation mechanism of state capital ownership in enterprises in
Vietnam
So far, there has not been much research on the mechanism of
representation of state capital in enterprises. Moreover, there is a great difference
in approach and solutions proposed in this regard. From a political economy
point of view, there have been no researches that adequately and
comprehensively discuss the mechanism of representation of state capital in
enterprises in Vietnam. The main issues of theoretical and practical issues
include:
- The objective necessity of state ownership through the mechanism of
state capital representation in enterprises in the socialist-oriented market
economy; rationale, nature, characteristics, roles and contents of state capital
representation mechanisms in enterprises and influencing factors.
- State of representation mechanism of state capital in enterprises in

Vietnam in the process of formation and development of socialist-oriented
market economy, inadequacies and causes.
- Solutions to improve and improve the efficiency of the state capital
representation mechanism in enterprises in Vietnam in the coming time.
Chapter 2
THEORETICAL BASIS AND PRACTICE
OF THE MECHANISM OF REPRESENTATIVE OF STATE CAPITAL
OWNER IN STATE-OWNED ENTERPRISE
2.1. CONCEPTS OF THE MECHANISM OF REPRESENTATIVES OF
THE STATE CAPITAL OWNER IN STATE OWNED ENTERPRISES IN THE
MARKET ECONOMY

2.1.1. State ownership in a market economy
In a market economy, state ownership and the ownership of the entire
population can have a certain relationship, the state as the subject representing
the whole society can manage and use the subject matter owned by the people.
This thesis will use the concept of state ownership as a particular form of
ownership in a market economy in which the owner is the State, the subject


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property being the property owned by the state and assets and resources under
the entire people's ownership that the State is the subject of management and use.
2.1.2. Representatives of owners of state capital in enterprises
Representatives of State-owned capital in enterprises are organizations and
individuals assigned by the State to exercise the powers and responsibilities of
state-owned enterprises at state-owned enterprises. The State exercises the rights
of state-owned enterprises through the representation mechanism.
2.1.3. The concept of representative mechanism of state owned capital
in enterprises

The representation mechanism of state capital owner in enterprises is the
indirect mode of state ownership of capital sources invested by the state through
the overall economic and legal relations between the state as the owner and the
representatives of state capital owner of state-owned enterprises in order to
efficiently implement the state ownership and properly and fully exercise the
powers and responsibilities of organizations and individuals that are
representatives of state capital owner in SÓEs, ensuring that SOEs operate
effectively, contributing to the state's economic role in the market economy.
The mechanism of representation of state capital owner in enterprises has
the following role:
Firstly, orientation, guidance, behavioral guidelines, and frameworks for
the implementation of state capital owner representative.
Secondly, being the basis, the standard for the representative of State
capital owner to implement.
Thirdly, to reduce uncertainty by providing the necessary information and
establishing a stable mechanism for the interrelation between agencies and units
in the state management apparatus.
2.2. CONTENTS OF THE REPRESENTATIVES OF REPRESENTATIVES
OF STATE OWNED CAPITAL IN ENTERPRISES

The contents of the state capital representation mechanism in enterprises
include:
- Methods of determining the authority of state capital owner and
representatives of the owner in organic relations.
- The mechanism for appointing, dismissing and remunerating
representatives of state capital owner in enterprises.
- Mechanism for checking, supervising and evaluating representatives of
state capital owner in enterprises.

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2.3. CRITERIA FOR EVALUATION OF THE MECHANISM FOR
REPRESENTATIVES OF STATE CAPITAL OWNER IN ENTERPRISES

2.3.1. Qualitative Criteria for evaluation
Reflects quantitative evaluation criteria:
- The strictness of the mechanism of representation of state capital owner
in enterprises.
- Level of self-consciousness in implementation of the representative
mechanism of state capital owner in enterprises represented by state-owned
representatives, representatives of state capital owner in SOEs.
- The regulations are based on the socio-economic bases and laws of the
State as a basis for comparison and evaluation of the mechanism of
representation of state capital in enterprises.
- Some basic qualitative criteria when evaluating the effectiveness of state
capital representation mechanism in enterprises, such as: 1) socio-economic
efficiency brought about by the mechanism; 2) The appropriateness of the
mechanism with the powers and responsibilities of the representatives of state
capital in enterprises and the operation of SOEs; 3) The impact of the mechanism
on the powers and responsibilities of the representatives of state capital in
enterprises and SOEs.
2.3.2. Quantitative evaluation criteria
These are the criteria used to measure quantity with specific units:
- By quantitative calculations such as state budget revenue increase,
increase in number of employed persons; The number of agencies and
organizations assigned to represent state ownership in SOEs is effective or
ineffective, violating laws; the amount of state capital lost in the enterprises; The
number of persons assigned the right to represent the owner of state capital in the
enterprise must satisfy the conditions and criteria prescribed by law; Number of
people failing to meet the conditions and standards; The number of people

considered and disciplined due to failing to meet the conditions and criteria for
appointment or law breaking.
- Based on specific factors such as the criteria for evaluating the
performance of SOEs: Turnover; After-tax profit and after-tax profit ratio;
Overdue debts, ability to pay due debts; The observance of current law
provisions, such as legislation on investment, management and use of state
capital at enterprises, tax law and other State budget remittances, regulations on
reporting regime finance and reporting to carry out financial oversight. The
performance of products and services of the public interest.


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2.4. FACTORS AFFECTING THE MECHANISM OF REPRESENTATIVES
OF STATE CAPITAL OWNER IN ENTERPRISES

2.4.1. Internal Factor
- The appropriateness of the system of legal documents and policies to
represent state capital owner with reality.
- Capacity of staff assigned to represent state capital owner in enterprises
(representatives).
- Efficiency and effectiveness of state capital representation agencies in
enterprises.
- Characteristics of the organization and operation of SOEs, such as the
model and organizational structure of the enterprise; the economic and technical
characteristics of the business; The capacity and qualifications of the managerial
apparatus in the State enterprises.
2.4.2. External factors
The conditions of international economic integration have a great influence
on the effectiveness and efficiency of the state capital representation mechanism
in enterprises, both in terms of thinking, perception and practical operation of the

mechanism. Therefore, the state capital owner representation mechanism in
enterprises has to adapt to new conditions for SOEs to operate effectively.
2.5. EXPERIENCE ON THE MECHANISM OF REPRESENTATIVES
OF STATE CAPITAL OWNER IN ENTERPRISES OF SOME COUNTRIES
AND LESSONS FOR VIETNAM

2.5.1. Experience on the mechanism of state capital ownership
representation in enterprises in some countries
2.5.1.1. Representative
Proposing representatives in SOEs: Representatives may be state officials
or officials in management ministries or officials in enterprises; Basing
themselves on the relevant provisions on appointment and dismissal of
representatives in enterprises; The mechanism of appointing a representative to
comply with the corporate law, in which the chairman and the executive director
are appointed based on the number of shares owned by the company ... Salary
paid to business leaders, representatives is stipulated not to exceed 20 times the
lowest salary level in the group of key SOEs or pay by agreement of salary plus
allowances such as housing and education expenses of dependent children.
Representative evaluation: The basic assessment criteria include gross
margins and economic value added, taking into account factors of historical
condition and advantages of the enterprise.
2.5.1.2. Model of implementation of state capital ownership
In the world, the model of representation of state capital in enterprises can
be divided into three categories:


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Scattering model: The sector manager implements CSH rights for SOEs
owned by the central government (similar to local SOEs).
Centralized model: SOEs are concentrated on a specialized organization

that performs the functions of State Owned Enterprises (SOEs) for SOEs.
The "bi" (centralized and scattered) model: Most SOEs are focused on a
specialized agency to manage, monitor, restructure, develop and improve
efficiency, dispersion To manage, supervise and perform the function of
representing owners in branches, domains and localities.
2.5.1.3. Supervision of owner representatives
In general, countries implement two main modes: direct monitoring
through representatives of CSOs in enterprises and indirect monitoring through
reporting systems.
2.5.2. Lessons for Vietnam on developing, implementing, and
improving the representation mechanism for state capital owner in
enterprises
First of all, it is necessary to clearly define and institutionalize the
separation between the ownership and the right to trade state capital, the state
management function with the task of exercising the right of CSH to SOEs.
Secondly, innovation and application of modern governance frameworks to
SOEs must be reformed.
Thirdly, select the appropriate model of organization of state capital
representation agencies in enterprises.
Fourth, focus on staff work, especially the selection mechanism,
appointment of representatives of CSH and leaders of SOEs on a large scale.
Fifthly, strengthen the examination and supervision of state-owned
enterprises in SOEs.
Chapter 3
ACTUAL SITUATION OF THE MECHANISM
OF REPRESENTATIVE FOR STATE CAPITAL OWNER IN STATEOWNED ENTERPRISES IN VIETNAM
3.1. ACTIVITIES AND MODELS OF THE ORGANIZATION AND
APPARATUS OF STATE-OWNED ENTERPRISES

3.1.1. The formation, development and operation of state-owned

enterprises
Vietnam's state-owned enterprises were formed during the period of central
planning, which was constantly renewed and developed in the process of


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formation and development of a socialist-oriented market economy since 1986.
In the past time, SOEs have basically performed the role and tasks assigned by
CSOs, contributing to promoting socio-economic development. It is an important
material force for the State to regulate the economy, stabilize the macroeconomy, ensure a great balance of the economy.
In the late 1980s, the number of SOEs was over 12,000, of which localmanaged enterprises accounted for 75%. During the period 1991-1994, more
than 250 corporations, unions of enterprises and independent SOEs were
reorganized; 17 corporations were established under Decision 91 / TTg dated 7
March 1994 and 76 corporations were established and managed under the
authority of the Prime Minister to Ministries and Provincial People's Committees
Decision No. 90 / TTg dated March 7, 1994.
As of the beginning of 2000, the number of SOEs decreased to about 6,000
SOEs. However, the average annual growth rate of state owned enterprises was
11, 7%, 1.5 times the average growth rate of the whole economy and nearly
double the non-state economy (the average GDP growth rate of the whole
economy in the period 1977-1980 was 0.4% in the period 1981-1985, 3.9% in
the period 1986-1990 and 8.2% in the period 1991-1995. As a result, SOEs have
grown steadily, making up 40.2% of GDP, over 50% of exports, contributing
39.25% of total state budget remittances.
Over the past 15 years (2001-2016), the number of SOEs has decreased
sharply. As of October 2016, there were 718 SOEs, but the real GDP at current
prices was always higher Last year, even in the period when Vietnam was
affected by financial crisis and economic recession. The share of the state-owned
economy in GDP tends to decrease but remains above 30% annually, of which
the share of SOEs is about 27-28%.

The SOEs have shown remarkable development as mentioned above, but
the activities of SOEs are still limited. They are:
- The performance of SOEs is not commensurate with the scale of capital
and resources held; Competitive power is low.
- The scale of state ownership is large, but in many SOEs exist bad debts,
overdue debt hundreds of billion, even up to trillions.
- A number of SOEs are still weak, causing loss of capital, assets, bad
debts, continuous losses.
3.1.2. Overview of the organization and structure of state-owned
enterprises
For one-member limited liability companies: Where the company
authorizes two or more persons to act as representatives, the managerial structure


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of the company shall be composed of the members council (chairman of the
council); The Director or the General Director and the Controller. Of which:
Council members include all authorized representatives. Board members on
behalf of CSH company perform rights and obligations of CSH. Chairman of the
Board is appointed by the company. The Board of Management operates under
the Charter of the company. In the case of a company authorized by an
authorized representative, the managerial structure of the company shall include:
Chairman of the company; The director or general director; Surveyor. As such,
the authorized representative will hold the position of Chairman of the company.
Chairman of the company on behalf of CSH performs the rights and obligations
of the company CSH. Such rights and obligations shall comply with the company
charter and related laws.
For a limited liability company with two or more members, the
management organization model includes: Council of Members (Chairman of the
company); The Director or the General Director and the Control Board. In

particular, the Council is composed of all members, the highest decision-making
body in the company. The Board of Directors operates on an infrequent basis,
performs functions through meetings and makes decisions on important issues of
the company, based on votes of the members at the meeting. The Chairman of
the Board, elected by the Board, may also be the Director or General Director.
The Chairman of the Board of Management shall exercise the rights and
obligations under the Law on Enterprises and the Charter of the Company.
For joint-stock companies, the regulations on the organizational structure
for management of joint-stock companies shall be as follows: "1. Shareholding
companies have the right to select management organizations and operate under
one of the following two models, unless otherwise provided for by the law on
securities: a) General Assembly of Shareholders, Board of Directors, Inspection
Committee and the director or general director. b) General Assembly of
Shareholders, Board of Directors and Director or General Director.
Party organization in the SOE sector
Party organizations in SOEs include party committees, party committees,
and subordinate committees. Party organizations in economic groups and
corporations are affiliated to the Party Central Committee; Under the provincial
Party Committee, the Party Committee or the Party Committee of the business
unit of the provincial Party Committee, the Party Committee is organized
according to two models: the Party Committee of the entire economic group, the
corporation and the Party Committee of the parent company of the economic
group, the total company. For economic groups and state corporations which are


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not yet operating under the parent company-subsidiary model, the Party
organization of the economic group and corporation. After the parent companysubsidiary model, reorganize following the parent company model. In general,
the Party cells and subordinate units in SOEs are the political nucleus, leaders of
enterprises implement the Party's policies and guidelines, policies and laws of the

State; To effectively carry out political tasks; Improving the material and
spiritual life of laborers, fulfilling their obligations towards the State; To build up
a clean and strong party branch and branch, contributing to promoting the
leading role of the state economy in the socialist-oriented market economy and
building a strong working class.
3.2. ACTUAL SITUATION OF THE MECHANISM OF REPRESENTATIVE
OF THE STATE CAPITAL OWNER IN VIETNAMESE ENTERPRISES

3.2.1. Status of mechanisms for determining ownership of owners and
representatives of owners of state capital in enterprises in Vietnam
The formation of specific views on the mechanism for defining the
competence of CSH and representatives of state capital in enterprises in Vietnam
in the renovation period is carried out on the basis of the Party's guidelines and
policies and laws of the State.
The Party's policy adopts the resolution of congresses, resolutions and
conclusions of the Party Central Committee.
Since the ninth congress of the Party (2001), the Central Government has
repeatedly issued many resolutions and conclusions on SOEs, emphasizing the
need to reform and change the way of exercising state ownership. in business. In
particular, in the Congresses (X, XI, XII), this issue is mentioned in the
convention documents. The XIIth Congress (January, 2016) affirmed the need to
further improve the institutional structure of ownership, which defined:
Separation of functions of assets, capital of the State and functions of state
management, management functions business of SOEs; Early termination of the
function of representatives of state ministries of state ministries and People's
Committees on capital and state property at enterprises. The Central Committee,
the Ministry of Political Affairs, the Secretariat issued 9 resolutions, directives,
conclusions and notices on this issue.
State policies and laws on the representation of State capital in enterprises
in Vietnam: Law on State Enterprises in 1995 and Law on State Enterprises in

2003 (replacing the Law on State Enterprises in 1995). Then, the Law on
Enterprises in 2005 marked a big change in the law on enterprises in Vietnam is
to form a common legal framework, uniformly applied to all types of enterprises.
The government issued decrees. Until now, the rights and responsibilities of


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State Owned Enterprises (SOEs) have been fundamentally determined, with the
main responsible agency. The Board of Directors or the Chairman of the
company is also responsible for managing and operating the enterprise in
compliance with the law and the decisions of the CSH, the management of the
use, preservation and development of capital effectively, reports CSH. The loss
of business operations, insecure solvency, failing to fulfill the objectives and
tasks assigned by the SEC or wrongful acts. At the same time, new regulations
on the rights and responsibilities of State Owned Enterprises (SOEs) for SOEs,
on SOEs' performance appraisal, are also promulgated and improved, as reflected
in the Enterprise Law of the year 2014. and the Law on Management and Use of
State Capital for Investment in Production and Business in Enterprises; Decree
No. 99/2012 / ND-CP dated November 15, 2012 of the Government on
assignment and decentralization of the implementation of rights, responsibilities
and obligations of State Owned Enterprises (SOEs) and state capital invested in
Enterprises, regulating and decentralizing the contents of state management with
state management of SOEs.
3.2.2. Current status of the mechanism for the appointment,
commendation and discipline of representatives of state capital owners in
enterprises in Vietnam
According to the Party's regulations on the decentralization of personnel
management (attached to Decision No. 67-QD / TW dated 04/7/2007 of the
Politburo), the title of Chairman of the Board of Directors / Chairman of the
Board of Management is especially important for the state to participate in the

appraisal of the personnel of the Central Party committees. The Government's
Board of Directors decides the positions of Chairman of the Board of Directors
of groups and corporations of special importance (according to the Government's
ranking). On 19/12/2017, the Politburo issued the Regulation No. 105-QD / TW
on decentralization of personnel management and the nomination and
introduction of candidates (replacing Decision No. 67-QD / TW), including basic
and comprehensive contents in all aspects, steps by steps in cadre work. The
Ministry of Home Affairs issued Circular No. 01/2008 / TT-BNV dated January
15, 2008 guiding the order and procedures for the appointment, reappointment,
dismissal, commendation and disciplining of the Chairman, Board members,
General Director, Director. According to the 2008 Law on Cadres and Civil
Servants, the Government shall specify the application of the Law on Cadres and
Civil Servants to the Chairman, members of the Board of Directors, General
Director, Deputy General Director, Director and Deputy Directors, Chief
Accountant and other holders of leading and managerial positions in SOEs;


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Those who are nominated by the State as representatives of CSH of the State
capital at enterprises with capital contributed by the State.
Decree No. 66/2011 / ND-CP dated 01/8/2011 of the Government
regulating the application of the Law on Cadres and Civil Servants to the
leadership and management of one member limited liability companies. CSH and
the person nominated to be a representative of CSH of the State capital at
enterprises with contributed capital of the State. Decree No. 97/2015 / ND-CP of
October 19, 2015 of the Government stipulating the management of holders of
posts and posts at enterprises is a one-member limited liability company with
100% regulations. At the same time, the Government issued decrees on the
management of labor and wages for laborers in line with the roadmap for
arranging and converting state companies. On October 23, 2015, the Government

issued Decree No. 106/2015 / ND-CP on the management of representatives of
state capital holding managerial positions at enterprises with over 50% ,
replacing Decree No. 66/2011 / ND-CP dated 01/08/2011. The new Decree No.
106/2015 / ND-CP has narrowed the scope of adjustment and only adjusted for
the Representative to manage the State share of capital in enterprises with more
than 50% the ratio; To supplement the provisions on: concurrently working for
the representative of the State capital portion; Specify the criteria for each level
of annual assessment for the representative and amend the evaluation order and
procedures; Agent's conditions; procedure for appointing Representative; the
Representative; Disciplinary action against the Representative and change of
dismissal rules
3.2.3. Current state of mechanism for inspecting and supervising
representatives of state capital owners in enterprises in Vietnam
Basing themselves on the Party's resolutions and charters, the Party
Committees at all levels have directed the inspection and supervision of the
results of production and trading as well as the management of the State capital
in the State groups and corporations in order to discover negative, negative; The
loss of a large number of state assets, some key officials were expelled from the
Party, prosecuted, public opinion jar. On the basis of the guiding principles of the
Party, the Government and the Prime Minister issued a number of decrees and
decisions, the concerned ministries and branches issued circulars guiding the
implementation of the mechanism of supervision and evaluation of efficiency.
for SOEs; Supervise and supervise representatives of state capital in SOEs.
The regulatory framework for SOE monitoring and evaluation has been
established since the adoption of the SOE Law in 2003 and is continuing to be
completed and supplemented. Prior to 2015, these documents were divided into


17
two groups: (1) A set of documents regulating mechanisms for monitoring and

evaluating the operation of SOEs, regulations on methods, methods, tools, To
conduct monitoring and evaluation of SOEs' activities; (2) Group of legal
normative documents on monitoring and evaluation of SOEs 'operations or
related monitoring and evaluation of SOEs' operations.
Regarding the inspection and supervision of the Party: the term of the 11th
Party Congress (2011-2016), the inspection committee at all levels checked
55,250 party members when there were signs of violation, through inspection
found 42,757 members Violate, discipline 20,344 members of the party;
supervising 213,320 Party members on the contents of observance of policies
and laws of the State 110,214 cases; The performance of assigned duties and
responsibilities 77,775 cases ... in which the content inspection and supervision
of the performance of duties assigned to representatives of state capital in the
enterprise. In 2013, the Inspection Committee of the Ho Chi Minh City Party
Committee reviewed and concluded that many key leaders were Party
secretaries, chairmen of the Board of Directors, directors of four public service
enterprises Ho Chi Minh City has violated, causing very serious consequences
such as signing contracts in contravention of the provisions of the Labor Code to
infringe upon the interests of the laborers; Wage division for high business
leaders, unequal. Has been disciplined or recommended to the party discipline
authority in the form of warning or expulsion for many key leaders mentioned
above. Through the inspection work of the Central Commission of Inspection in
2014, discovered the former Director of Vietnam Maritime Bureau, former
Secretary of the Party Committee, Chairman of the Board of Vietnam Maritime
Corporation (Vinalines), former Commissioner Standing Party of the central
business party has the role of mastermind, leading in the 83M floating market,
causing damage to the State more than 366 billion, embezzlement more than 28
billion, has proposed the competent authority to expel out of the Party. As a
result, the Ministry of Transport, as the managing ministry, failed to fulfill its
responsibility to inspect and supervise the management and use of capital and
assess the business results of Vinalines. Serious results. In 2016, through the

inspection discovered former Party Secretary, Chairman of Petrovietnam
Construction Joint Stock Corporation (PVC) under the Vietnam National Oil and
Gas Group has been with the Standing Committee of the Party Committee, the
Board of Directors, The Board of General Directors, the Board of Supervisors of
the Corporation have been irresponsible, let loose the leadership, management,
lack of supervision and supervision, contrary to the provisions of the law on
economic management. many violations and losses of VND3,298.27 billion


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(2011-2013), has asked the competent authorities to clear out the Party and
prosecute investigation clarified.
The State inspection, supervision, inspection and audit of state capital
representatives in enterprises: The inspection, supervision, inspection and
auditing work for SOEs in the observance of law Laws and compliance with
decisions of CSH are emphasized. According to the Government's AntiCorruption Report 2014, state administrative agencies have deployed 7,596
administrative inspections and 193,508 specialized inspections. Through
inspections discovered violations of 31.885 billion, recommending the recovery
of state budget 27.109 billion, transferred to the criminal investigation agency 61
cases. The State Audit has issued 163 audit reports, proposals for financial
handling 13,626.4 billion, transferred the investigation agency 5 cases. Since
2005, there have been 13-14 inspections, audits, inspections in Vinashin.
Through these, also discovered a lot of mistakes, while detecting the mechanism
of supervision, inspection is in trouble.
3.3. ASSESSMENT OF ACTUAL SITUATION OF THE MECHANISM
OF REPRESENTATIVE OF STATE CAPITAL OWNER IN VIETNAMESE
ENTERPRISES

3.3.1. Advantages
Renovation of the mechanism of management, assignment and

decentralization in the implementation of rights and obligations of State Owned
Enterprises has contributed to renewing the mechanism of governance and
transparency of information on SOEs in accordance with international standards
and practices, from there:
Firstly, it contributes to renovating, enhancing the efficiency and
effectiveness of the state management and the owner agency for the state owned
enterprises.
Secondly, promoting organization, equitisation, SOE restructuring.
Thirdly, contributing to renovating and improving the operation efficiency
of state corporations; forming a number of strong economic groups; To perfect
policies on assignment, sale and business contracting.
Fourthly, contributing to renovating the management of cadres, civil
servants and employees at SOEs.
Fifthly, the guideline of the Party and the system of legal documents on
representatives of CSH, inspection and supervision of representatives of state
capital in enterprises and on supervision, inspection and inspection of investment
management, using state capital at enterprises is relatively full, initially creating a
legal corridor, ensuring the right of production and business enterprises, while


19
preserving and improving the efficiency of the use of capital and assets.
government.
3.3.2. Limitations
The institutionalization of resolutions of the Party on representation of
housing capital in enterprises has limitations and inadequacies. The new
documents only regulate the rights and obligations of state-owned State-owned
companies. There are no regulations, procedures, clear appointment,
reappointment, dismissal, commendation or discipline of the Chairman, members
of the Board, General Director, Director, Controller ... None. Separate

regulations on reward and discipline of organizations and individuals are
authorized to represent state capital. There is no document on the party's
resolution on the Party's inspection of party organizations and party members at
state-owned enterprises and SOEs. Many regulations on SOEs are unclear,
overlapping or unrealistic so it is difficult to implement, but not amended or
supplemented in time. In the process of implementation of the equitisation
policy, the disclosure of inadequacies. Regarding regulations, the content of state
management with state management of SOEs has been identified. The main
shortcomings and constraints are as follows:
Firstly, there are too many clues to management, so it is in the situation of
overlapping and not clearly defined responsibilities.
Secondly, it is not yet clear whether the CSH function is representative of
state management functions.
Thirdly, there is still a dispersed, incompetent, professional and specialized
situation in the exercise of the rights, responsibilities and obligations of State
Owned Enterprises.
Fourthly, there is no mechanism for creating incentives and sanctions for
all agencies and individuals who successfully fulfill their tasks of performing the
function of representing State employees. The process of selecting and arranging
SOE managers is not suitable with the operation of enterprises according to the
market mechanism and international practices. The remuneration and treatment
regime applicable to SOEs' managers is basically the same as for public servants.
Fifthly, the model of implementing the rights and responsibilities of
representatives of state-owned enterprises and SOEs in enterprises has been
renewed, but has not kept pace with the requirements set out in the management
practice and supervision of enterprise. The decentralization of cadres who
represent SOEs at SOEs has many unreasonable points, which are more likely to
occur negatively and locally. A small part of SOEs' managers are weak in
management capacity, lack of responsibility, deterioration in ethical qualities,

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deliberate wrongdoing, violations of legal regulations, Taking advantage of
assigned tasks to gain their own benefits and causing big losses, big losses for
some SOEs, badly affecting the prestige of the Party and the State and belief in
SOEs. Inspection and supervision of the CSH is formal, there are places,
sometimes let loose.
3.3.3. Causes of limitations
Objective causes due to the global and domestic economic situation,
especially due to difficult situation of SOE sector from many years are not easy
to handle, solved immediately in a short time. The financial crisis, global
economic crisis has greatly affected the SOE system in the context of the country
has deepening integration and broad economic system in the world. Maintaining
the model of centrally planned planning is too long leading to backwardness and
difficulties in economic thinking, management mechanism and SOEs. The SOE
model in every country has always contained difficulties and complexity in
management.
Subjective causes are due to:
- Awareness of position, role of national economy and SOEs,
representatives of state capital owner in SOEs have sometimes been inadequate;
Many issues are unclear, but opinions are different but not summed up. Partial
representation of some capital owner agencies and SOEs.
- State management over SOEs is still weak. Mechanisms and policies on
SOEs, representatives of state capital owner in SOEs are still inadequate, slow
and incomprehensible, many of which are not compatible with the socialistoriented market economy.
- The organization of research and institutionalization of some policies of
the Party and State is not timely.
- Some ministries and agencies have not really focused on the
promulgation of mechanisms and policies on state capital representation in SOEs
in line with the set plan.

- The capacity of management of some corporations and corporations is
still weak. It also causes the loss of capital, assets and losses, but there is no clear
and specific mechanism for handling liabilities.
- Mechanism for monitoring and evaluating the operation of SOEs; The
mechanism of inspection and supervision of organizations and individuals that
have been assigned the right to represent the State budget has no warning or
prevention effect.


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Chapter 4
VIEWPOINTS AND SOLUTIONS TO PERFECT THE MECHANISM OF
REPRESENTATIVE OF STATE CAPITAL OWNER OF STATEOWNED ENTERPRISES IN VIETNAM IN THE FUTURE
4.1. VIEWPOINTS ON IMPROVEMENT OF THE MECHANISM FOR
REPRESENTATIVES OF STATE CAPITAL OWNER IN ENTERPRISES IN
VIETNAM

4.1.1. Forecasting situation
In the coming time, the globalization of the world economy will be
stronger; bilateral, regional and multilateral economic links continue to expand;
science and technology increasingly assert its role as one of the most important
direct production forces of the world economy; The tendency for negotiation and
conclusion of free trade agreements is broader than before, including nontraditional sectors (new FTAs). The Industrial Revolution 4.0 creates the
motivation for businesses in general as well as SOEs to change their production
methods, business and market thinking.
The domestic situation, over the past 30 years of innovation has created a
lot of strength and power than before, the economy of the country has changed in
terms of speed and growth of each industry, each However, Vietnam will still
have to face with difficulties and challenges arising from the inherent
weaknesses of the economy. So far, many of the Party's policies on state capital

representation in enterprises have not been fully institutionalized.
4.1.2. Some viewpoints
- State-owned enterprises are a part of the state economy.
- State-owned enterprises shall implement the strategic direction of the
State and submit to the comprehensive inspection and supervision of the State
capital owner.
- The organization and operation of SOEs must comply with the following
principles: Obey the laws, the objective laws of the market economy; Under the
management and regulation of the State.
- Separation of ownership and business rights, separation of state
management functions with the task of exercising the right of CSH to SOEs.
Establishing a specialized agency to act as representative of state owned
enterprises.
- Strengthening the leadership of the Party towards the reorganization,
renovation, development and improvement of SOEs' effectiveness; Renewal and
enhancement of the leadership role of party organizations in SOEs.


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4.1.3. Directions
- To define and strengthen the state management functions and functions of
implementing the CSH on the basis of perfecting the decentralization mechanism
for exercising the rights and obligations of the State Treasury.
- Separating the implementation of ownership rights to the right of
production and business of enterprises.
- Promoting equitization of SOEs.
- Renovation of governance and operation mechanism of SOEs moving
towards organization and operation in the form of joint stock companies, limiting
the operation in the form of limited liability companies.
- To publicize and clarify activities of SOEs, especially the SEs and the

State Corporations in the fields of natural monopoly.
- Renovation of appointment and commendation; Strengthening
examination and supervision Representative. Transparency in the recruitment
and appointment of representatives.
4.2. MAJOR SOLUTIONS TO PERFECT THE MECHANISM OF
REPRESENTATIVES OF STATE CAPITAL OWNER IN VIETNAMESE
ENTERPRISES IN THE FUTURE

4.2.1. General solution group
Firstly, strengthening the leadership of the Party in state-owned enterprises.
Renovate the model of party organization in the state-owned enterprises to suit the
practical situation.
Secondly, establish a state-owned representative office in the enterprise. To
form a unified organization for the representation of owner in SOEs, to promote
administrative reform in state management agencies; Creating breakthroughs in
innovation, development and improvement of SOEs' efficiency.
Thirdly, exercising the rights and responsibilities of the State
Representative. The National Assembly promulgates laws on state capital
representation in enterprises. The Government issued decrees on the operation of
SOEs and the management and use of state capital invested in enterprises.
4.2.2. Group of solutions on organizational and human apparatus
Firstly, strengthening SOE governance; Strategic training of business leaders,
state managers in accordance with international standards; Renovate the remuneration
mechanism for representatives of State-owned enterprises in enterprises.
Secondly, to perfect the mechanism of information systems, internal
management. Strengthening transparency and disclosure of information, equitized
SOE companies must be listed on the stock market if they meet the conditions,
contributing to increasing supply to the market and transparency of information.
Thirdly, the separation of SOE managers from civil servants and officials.
To publicize, transparently and broadly apply the mechanism of recruitment and

appointment of representatives through competitive examinations.


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4.2.3. Group of solutions on supervision and inspection
Firstly, there is a mechanism to clarify the responsibilities and obligations
of organizations and individuals assigned to perform the rights and obligations of
the owner. To intensify the Party's inspection and supervision of the Party
organizations and Party members at the State agencies for State and State
enterprises; Strengthen management, supervision, inspection of owner. Improve
capital management efficiency and representative supervision.
Secondly, to perfect the management and control mechanism for SOEs on
the basis of economic activity and socio-political tasks, including financial
supervision and performance evaluation in State owned enterprises and
enterprises with state capital.
Thirdly, promoting the role of supervision of mass organizations in
enterprises. To supplement the completion of important monitoring indicators in
service of the prevention of risks, prevention of loss of capital and assets,
ensuring the safety of the State capital and assets at enterprises. The sanction
system should be designed specifically, strong enough and clear for violations.
4.2.4. Group of solutions on equitization, state enterprise restructuring
Promoting equitization, divestment. To consistently promote SOE
equitization in the direction of reducing the state ownership ratio in enterprises;
To implement publicly and transparently, especially in equitization roadmap,
enterprise valuation audit, financial report ...
Continuing to strengthen the restructuring of SOEs, with focus on
corporations and state corporations. To build an economic group with 100%
capital or controlling shares in a number of important branches in order to
implement the national development strategy as a key force in ensuring the major
balances and macroeconomic stability. To continue restructure state-owned

economic groups and corporations in a comprehensive manner from the
organizational model, management, human resources, production and business
lines, development strategies and investment to the market. and products,
organizational structure and labor, innovation of corporate governance.
4.3. SOME RECOMMENDATIONS TO THE CENTRAL

- For the Party Central Committee.
- For the National Assembly.
- For the Government.
- For ministries, ministerial-level agencies and agencies attached to the
Government.