Nghiên cứu tác động của quản trị công ty đến hiệu quả hoạt động kinh doanh tại các doanh nghiệp chế biến thực phẩm niêm yết trên thị trường chứng khoán việt nam tt tiếng anh

MINISTRY OF EDUCATION AND TRAINING
FOREIGN TRADE UNIVERSITY
---------

SUMMARY OF PHD THESIS

THE IMPACT OF CORPORATE GOVERNANCE ON FIRM
PERFORMANCE IN LISTED FOOD MANUFACTURING
COMPANIES OF VIETNAMS STOCK MARKET

Major: Business Administration
Code number: 9340101

TANG THI THANH THUY

Hanoi – 2020


THE LIST OF PAPERS PUBLISHED
The thesis is completed at: Foreign Trade University

1.

Science instructor: 1. Dr Nguyen Thi Hien
2. Dr Tran Thi Luong Binh

2.

Reviewer 1: .............................................................................
Reviewer 2: .............................................................................
Reviewer 3: .............................................................................

3.

4.

5.
The research will be protected in front of the
at..............................

council meeting
6.

7.

P.T. Dong, T.T. Thanh Thuy and N.T. Thanh Tra; Foreign
Investment, Corporate Governance and Firm Performance in
Vietnam Listed Companies, Indian Journal of Economics and
Development, Volume 15 No. 4, pp 499-507.
Tăng Thị Thanh Thủy, 2019, Quản trị công ty tại Thái Lan và
Malaysia – bài học kinh nghiệm, Tạp chí nghiên cứu Đông
Nam Á 236, 11/2019, trang 34-44.
Tăng Thị Thanh Thủy, 2019, Quản trị công ty tại Thái Lan và
bài học kinh nghiệm cho Việt nam, Tạp chí tài chính 708,
7/2019, trang 152-156.
Nguyễn Thu Thủy, Tăng Thị Thanh Thủy, 2019, Phát triển
nguồn nhân lực quốc gia của Trung Quốc và bài học kinh
nghiệm, Tạp chí kinh tế đối ngoại 115, 3/2019, trang 31-49.
Tăng Thị Thanh Thủy, 2019, Tác động của quản trị công ty lên
hiệu quả hoạt động của các doanh nghiệp chế biến thực phẩm
niêm yết trên thị trường chứng khoán Việt Nam, Tạp chí kinh

tế đối ngoại 114, tháng 2/2019, trang 52-67.
Cao Đinh Kiên, Tăng Thị Thanh Thủy, 2018, Công nghệ tài
chính trong nền kinh tế 4.0, Tạp chí kinh tế đối ngoại 112,
12/2018, trang 86-95.
Nguyễn Thu Thủy, Cao Đinh Kiên, Tăng Thị Thanh Thủy,
2017, Kiểm soát hoạt động bán khống chứng khoán trên thế
giới và kinh nghiệm đối với Việt Nam, Tạp chí Những vấn đề
Kinh tế Chính trị Thế giới, số tháng 6/2017 (254), trang 56-68.


24
CONCLUSION
The research has systematized the theoretical competency
model including: concepts of definition, roles, characteristics and
business results. Besides, the thesis has clarified the theoretical
impact of the characteristics of the board and the ownership structure
on the business performance.
To achieve the research target to consider the impact of two
factors of corporate governance: board’s characteristics and
ownership structure on business results of the food manufacturing
companies listed on the stock market of Vietnam, the thesis used the
qualitative research method (expert interview and in-depth interview)
and quantitative research (descriptive statistics, regression model)
have identified a model of impact review and impact verification. of
these two groups of factors. The results show that the econometric
model for database analysis of 42 food processing companies listed
on the stock market. The results showed that ROA was significantly
positively affected by two variables, the number of independent
members of the Board of Directors and the Audit Committee, while
the Tobin's Q index was affected. is statistically significant by the

size of the Board of Directors, the number of female members in the
Board of Directors and the Auditing Committee, but is negatively
affected by the fact that the CEO is a member of the Board of
Directors. Organizational ownership has a significant positive effect
and having a family ownership factor is negatively correlated to
business results through Tobin's Q and ROA of firms.
Finally, on the basis of the research results combined with the
practicalities, the graduate student proposes recommendations to
improve the business results of the food manufacturing companies
listed on the stock market of Vietnam. Food manufacturing
businesses need to build a reasonable Board of Directors as well as
improve the capacity and role of its members.

1
INTRODUCTION

1. Research background
Corporate governance (CG) not only helps to maximize the use
of assets, achieve the set profit goals, but also increases business
results, attracts and retains competent people. Food manufacturing
industry is an industry in which Vietnam has many advantages and
potentials as one of the Vietnamese industries prioritizing
development to 2025, with a vision to 2035. Vietnam food
manufacturing industry is on strong momentum and bringing many
investment opportunities for domestic and foreign businesses. In
order to promote our country's food manufacturing industry, it is
necessary to improve the business results of these businesses.
Researching the impact of CG on two factors: characteristics of the
board and ownership structure to business results of listed food
manufacturing companies will help to make recommendations on

corporate governance to contribute to improving business results of
food manufacturing companies in Vietnam in particular and
companies listed on the stock market in general. Therefore, the topic
"The impact of corporate governance on firm performance in listed
food manufacturing companies of Vietnams stock market" is very
necessary and meaningful for implications in both theory and practice.
2. Research gap
Studies of the impact of CG on the characteristics of the board
and ownership structure to business results show inconsistent results.
Due to the importance of ownership structure and the diversity of
ownership structures in businesses today, especially in developing
countries, it is necessary to have studies on the relationship between
ownership structure, characteristics of the board and business results.
These studies in Vietnam focus on companies in the financial
industry, not many studies have been conducted and analyzed
corporate governance for the industry, while each industry with its own


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23

characteristics will bear the affected by various impact factors.
3. Research question
- How nature and basic characteristics of corporate governance, business
performance of listed food manufacturing in Vietnam?
- The impact level of corporate governance through two factors: board’s
characteristics and ownership structure to business performance in
Vietnam food manufacturing companies?
- Are there any solutions with special significance for corporate

governance reform to improve operational efficiency for in Vietnam
food manufacturing companies?
4. Research objective
‾ Theoretical researches related to the characteristics of the board,
ownership structure and business performance, the impact research
model among these factors,
‾ Study the status of board’s characteristics, ownership structure
in food manufacturing companies, thereby making comments and
assessments.
‾ Proposing solutions related to the board of directors and
ownership structure for food manufacturing companies and proposing to
the state management agency to enhance corporate governance activities
to improve results business activities
5. Research object and scope
5.1. Research object
The main objects of research are: board’s characteristics and
ownership structure affecting business results of food manufacturing
companies listed on Vietnam's stock exchange the research examines
the basic theories and the reality of corporate governance, board’s
characteristics, ownership structure and business performance in
businesses.
5.2. Research scope
‾ Scope of content: the research provides an overview of the
theory of corporate governance, business performance of the company.

5.2.2.2. Decreased share of state ownership and family ownership
Research shows that state ownership does not create a good
control mechanism to supplement business performance monitoring.
Food manufacturing companies need to carry out ownership
restructuring, especially companies with state ownership and family

ownership; in the direction of reducing the state ownership rate,
reducing the increase in foreign ownership and the policies planner
should introduce policies to encourage foreign owners and limit the
state owners in the public. In order to increase operational efficiency,
companies need to restructure their ownership, especially stateowned companies, in the direction of reducing state ownership,
increasing foreign ownership and policies planner should introduce
policies that encourage foreign owners and restrict the state owners
from being in companies.
5.3. Recommended to regulators
Developing sanctions to improve efficiency of law
enforcement in corporate governance in Vietnam
Strict regulations and controls to improve transparency when
disclosing information
Improve the capacity and effectiveness of associations and
social organizations


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3

of foreign investors in listed food manufacturing companies.
Specifically, companies need to increase the participation rate of foreign
investors in the management and administration of production and
business activities of companies so that foreign investors have the
opportunity to participate. directly managing the company, improving
the company's governance and competitiveness and giving the company
the opportunity to access the world's modern advances and machinery,
reaching out to international market and increase capital mobilization.
Currently, the shareholding rate of foreign investors is limited to

49%, which can reduce the ability to hold large shares and reduce
foreign shareholders' incentive to supervise the operation. of the
business. When the ownership rate exceeds 51%, foreign investors will
have more opportunities to participate directly in the corporate
governance. The fact that the share rate of a company held by foreign
individuals and organizations is limited to a certain percentage, creating
barriers for foreign investors to boost investment in domestic enterprises.
Enterprises can issue exclusive types of shares for foreign investors:
Increasing foreign ownership in listed companies is not only a measure
of easing the limit, but allowing enterprises to issue an additional
percentage. shares without voting rights for foreign investors.
In addition, the research results have not shown the role of
organizational shareholders in monitoring business activities when
the ownership ratio of the organization positively affects the
company's business results. Therefore, it is very necessary for food
manufacturing companies to properly build this ownership ratio and
attract the investment participation of organizational members, as
well as to attract foreign investment into operations. of the company,
in order to promote the supervisory role of these professional
institutional investors. The food manufacturing companies should
have preferential policies to attract organizations to invest in their
businesses. Institutional investors are the main force in the capital
markets and they have strong financial resources.

Researching the impact of corporate governance factors affecting the
business performance of companies, the research limits the study of two
corporate governance factors: characteristics of the board and structure
ownership of the business.
‾ Scope of space: 42 food manufacturing companies listed on Ho
Chi Minh City and Hanoi Stock Exchange. Of which 15 companies

listed on the Hanoi Stock Exchange and 27 companies listed on the Ho
Chi Minh City Stock Exchange. the research also limits the study of CG
from 2013 to 2018, vision to 2030.
‾ Scope of time: the research chooses the study period from 20132019 because before 2012 most Vietnamese companies did not have
management reports, in the period of 2012-2014, management reports
were prepared but limited information.
6. Research structure
The structure of the research is divided into five chapters
including Chapter 1: Overview of the research situation; Chapter 2:
Rationale on the impact of board’s characteristics and ownership
structure on the business performance of the companies; Chapter 3:
Research method and research model; Chapter 4: Research results on the
impact of board’s characteristics and ownership structure on the business
results of food manufacturing companies listed on Vietnam's stock
market; Chapter 5: Solutions related to the board and ownership
structure to improve business results in food manufacturing companies
listed on Vietnam's stock market


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CHAPTER 1:
OVERVIEW OF THE RESEARCH SITUATION

At the same time, research shows that the chairman of the board
concurrently holding the position of General Director reduces the level
of board supervision over the Board of Directors and increases moral
risk. To reduce ethical risk, there should be rules of transparency and

fairness, and compliance with corporate governance principles.
5.2.1.2. Encourage the establishment of audit committee
The study has shown that audit committees play a very
important role in the performance of research firms, so it is important
to encourage food processing enterprises to switch to a model with an
audit committee, at the same time, clear regulations on the institution
of the audit committee to ensure the functions and powers are not
affected by the board of directors or the executive board. Auditing
committee should have regular interaction as well as transparency in
operations to help investors better understand their working processes
and performance.
In addition, food manufacturing companies should establish
appointment committees, compensation committees to help the board of
directors as well as the general director evaluate the company's situation,
and at the same time promote transparency and publicity. believe.
Members of these committees need a high degree of independence,
especially the positions of committee presidents. Besides, there is a need
for gender diversity in the board of directors, and the board members
need to continually improve and apply good governance practices in
Vietnam and the world, and grasp the core issues of governance in
decisions. The Board of Directors needs to enhance the responsibility to
monitor and prevent conflicts of interest of members of the Board of
Directors, members of the Supervisory Board, General Director and
other managers... These are the appropriate regulations to help improve
the quality of corporate governance.
5.2.2. Solutions related to ownership structure in the business
5.2.2.1. Attracting participation of foreign institutional and foreign
investors
The study shows that it is necessary to increase the participation

1.1. Researches related to characteristics of the board
Research on corporate governance focuses on topics such as the
issue of representation and the manipulation of the Board of Directors
(Zhu, 2016), ownership structure (Phung, 2016), reform of state-owned
enterprises ( Anh, 2013), managerial salaries (Adams, 2009), the role of
the Board of Directors and independent administrators (Brennan, 2005),
investor protection mechanism (Shufa, 2010), the correlation of public
governance and corporate performance, corporate governance legal
framework, corporate governance characteristics in countries with
transition economies (Black et al., 2012).
The first studies on corporate governance in Vietnam appeared in
2008, when Hai and Nunoi (2008) with the article "Corporate
governance in Vietnam: a system in transition". (Corporate governance
in Vietnam in the transition process) gave the first glimpse of the
governance factors within the business, although corporate governance
was a new concept at the time. However, the author asserts that it will
become increasingly important when the 2005 Enterprise Law is
applied. From here, the research on corporate governance in Vietnam is
developing more.
1.2. Researches related to corporate structure in companies
La Porta et al. (1999), Claessens et al. (2000) argued that a
pyramid control structure and majority voting allowed major
shareholders to secure their control without pay attention to the rights to
cash flow. Erkens et al. (2012) studied 296 financial companies from 30
countries considered to be the worst affected by the financial crisis,
resulting in companies with the ownership ratio of shareholders. The
higher the organization, the greater the impact of the financial crisis
leads to greater fear of loss of shareholder wealth during the crisis.

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5

CHAPTER 5:
SOLUTIONS OF CORPORATE GOVERNANCE TO IMPROVE
FIRM PERFORMANCE OF LISTED FOOD MANUFACTURING
COMPANIES IN VIETNAM STOCK MARKET

1.3. Research related to business performance
Most studies focus on indicators of business performance
analysis, how to evaluate and measure business results. The most
commonly used criteria in the studies: the return on sale (ROS), the
return on assets (ROA) or the return on equity (ROE) (Mehran, 1995;
Ang, Cole and Line, 2000). However, according to Shah et al.
(2011), Le et al. (2011) said that the measure of business results
(profit on revenue - ROS or profit on total assets - ROA ...) is similar
to the return on equity - ROE.
In addition, Behn (2003) suggests that business results can be
influenced by many different factors such as business goals, size or age.
Baard and Van (2004).), Kokko and Sjöholm (2004) have shown that firm
size is one of the factors affecting firm's business performance. Zeitun et al.
(2007) also showed that there is a relationship between financial leverage
(Leverage), age of enterprise (Age), firm size (Size), corporate income tax
(Tax) and The proportion of tangible fixed assets (Tangibility) to the
business results of enterprises is measured by Tobin's Q.
1.4. Studies related to the impact of board’s characteristics and
ownership structure on business performance
In corporate governance studies, the characteristics of the Board
are often found as: (1) board size, (2) proportion of non- executive

directors, (3) the diversity of the Board of Directors in terms of the
percentage of women in the Board of Directors, (4) CEO duality and
ownership structure and concentration.
1.4.1. Characteristics of the impact of board’s characteristics,
ownership structure on firm performance
Jensen (1993), Miwa and Ramseyer (2000), Ferris et al. (2003)
claimed that there is existence of corrolation between the members of
the executive boards through terms and the company’s results of
business activities in the supervised companies. Qui et al. (2000) states
that the executive boards having good plans will increase 10% of the

5.1. Trends in food manufacturing industry development in
Vietnam
Food manufacturing industry is one of the main industry
groups selected by the Government of Vietnam to prioritize
development in the period of 2025, vision to 2035. However, the
majority of Vietnamese food manufacturing has small and medium
production size, lack of capital and management experience. Vietnam
has established a system of agro-forestry and aquatic product
processing industry with a designed capacity to ensure processing of
about 120 million tons of raw materials per year, with over 7,500
industrial enterprises associated with exports and tens of thousands of
small, retail and household agricultural products ... In particular,
some industries or products have modern processing equipment,
which is regional and world-class.
5.2. Solutions of corporate governance to improve firm
performance in food manufacturing companies listed on
Vietnam's stock market
5.2.1. The solution group completes the model and operation
regulation of the Board of Directors.

5.2.1.1. Enhance the independence of directors
The research results of the thesis show that the proportion of
independent members of the Board of Directors in food
manufacturing companies has a positive impact on the business
performance of companies. Research and propose that independent
members of the Board of Directors of listed companies and largescale public companies must prepare evaluation reports on the
activities of the Board of Directors.


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company’s productivity and decrease 30% propotion in alternating
Chief Executive Officer (CEO). The framework of Audit Committee in
many countries has proved to be efficient to the corporate
governance’s activities. The emergence of Audit Committee directed
from the board will decrease the cost of corporation’s representative,
which will enhance the activity efficiency (Yasser et al., 2011)
Doan Ngoc Phuc and Le Van Thong (2014) showed that the
features from corporate governance have effects on business
efficiency of the privatized corporations in Vietnam. Le Quang Canh
et al. (2015) pointed out that Corporate governance will bring better
results of business activities for the corporation; The independence of
business activities do not have influence on the result of the business
activities, in the dynamic but not distinct economy such as Vietnam,
it would be likewise that the attainment of two positions, namely
CEO and Chairman of the Board (COB) has good influence on the
business activities’ result of corporations.
1.4.2. The ownership structure influences on the business activities

result of corporations.
The researches have shown various results of the correlation
between the company’s activity result and ownership structure. For
the ownership structure, the majority mentions state-owned
companies, director-owned ones and members of the Corporate
governance-owned ones; However, the latter depends on countries’
conditions. Kaserer and Moldwnhauer (2005) figured out the
significant correlation between activities’ results (measured by share
cost and Tobin’s Q) and the Board’s proportion ownership structure.
This also showed the proportion of big shareholders is correlated
positively to the company’s activity results. Tran Minh Tri and
Duong Nhu Hung (2011) showed that Institutional Investors’
proportion has no effects on the business activity results. Although
the state-owned proportion has no effects on activity efficiency

4.3. Quantitative analysis results
ROAi,t =
–25,56882 – 0,1757118 * AGE – 0,7049779 * LEV +
2,044225 * B-IND + 6,968383 * AC + 0,1779152*
COWN - 0, 3353949 * StateOwn –
2,852891 * FamOwn + 14,185766
There are 5 variables presented for corporate governance that
have a statistically significant effect on business performance of food
processing firms in Vietnam. In which, there are two variables, the
number of independent members and the existence of the control
committee representing the characteristics of governance and three
variables representing the ownership structure of the business (except for
foreign ownership. ) both have statistically significant effects on ROA.
At the same time, the capital leverage index representing the business
characteristics also shows a significant influence on the relationship

between corporate governance and business performance of Vietnamese
food processing enterprises. listed on the stock exchange.
Tobin’s Qi,t = 53,31544 + 1,274453 * AGE - 0,8449494 * LEV +
4,716012 * BSIZE +5,333201* B-WMN - 9,178477
* CDUAL + 7,55271 * AC + 0,7905597 * FOWN +
0,5264417* COWN - 4,645285 * FamOwn +
99,032317
Out of a total of 9 variables representing corporate governance,
4 out of 5 variables represent the governance structure that has a
statistically significant impact on business performance of food
processing enterprises in Vietnam. Male and 3 out of 4 variables
representing ownership structure had a statistically significant impact
on Tobin's Q. In addition, besides the variable of Capital leverage,
the variable of year of operation also showed statistical significance
in the impact on the relationship between corporate governance and
Tobin's Q index of Vietnamese food processing enterprises listed on
the stock exchange.


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there is a good signal that the number of food manufacturing companies
with audit committee tends to increase over the years.
4.2.5.2. Ownership structure of listed food manufacturing companies
in Vietnam
a. Foreign ownership
The ownership rate of foreign investment funds in listed food
manufacturing companies is still in a minority and does not allow

funds to have a controlling voice in domestic listed companies. Most
businesses have low levels of foreign ownership. However, foreign
investors are increasingly inclined to increase their ownership
percentage in this group of businesses. Specifically, foreign
ownership groups at 20-30%, 40-50%, the number of businesses
tends to increase over the years.
b. Owned food manufacturing industry enterprises
Ownership rate of institutional investors maintains relatively
stable growth over the years, as institutional investors often commit
to long-term investments to create stability in the ownership structure
and operation of the business. . Groups with a high proportion of
institutional ownership of 20-60% account for a large proportion of
the total number of listed food manufacturing companies in Vietnam.
c. State ownership
The greater the percentage of state ownership, the lower the
performance of a listed CBTP company. State ownership has a
negative impact on the company's performance when the
representative of state capital contribution in the company is not
actually a shareholder of the company.
d. Family property
The lower the rate of family ownership, the higher the Tobin's
Q index among CBTPs, especially the group with a family ownership
rate of less than 2%, the performance is significantly higher than the
4 levels of ownership. remaining family. It shows that there is an
inverse relationship between family ownership and business
performance in the food manufacturing companies studied.

measured by Tobin’s Q, it is correlated positively to the one by ROE.
Do and Wu (2014) found that there is positive correlation between
state ownership and the business activity results of the company

(measured by ROA and ROE). Nguyen Thi Minh Hue and Dang
Tung Lam (2017) found the contrary results with listed companies,
but the same one with foreign and listed companies. Nguyen Tien
Thong (2017) mentioned that companies having national investment
has positive influence on the business activity results of the company.
Phung and Mishra (2017) proved that portion of foreign ownership
has good effect on the corporations’ business activity result.
CHAPTER 2:
THEORETICAL BACKGROUND
2.1. Overview of Corporate governance.
2.1.1. Definition of corporate governance
OECD defines that corporate governance is the internal
measures to run and control the company, which links to the
relationship between the director board, the board and the
shareholders with others. The corporate governance also create the
framework of the company’s goals, identify ways to reach them and
supervise the results.
In Vietnam, the Decree number 12 on 13/03/2017 of The
Financial Department about the corporate governance defines
“corporate governance is the system of principles that ensures the
company to be run and controlled effectively due to the advantages of
shareholders and the related others to the company”. This statement is
relatively appropriate for best practices and corporate governance.
2.1.2. The feature of corporate governance
- Corporate governance is based on the separation between
management and the ownership of a corporation.


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Corporate governance identifies the rights and responsibilities
between the advantageous, different members of the company
including the shareholders, the Boards, the executive boards, the
Board of Supervisor and the related in the company.
2.1.3. The role of corporate governance
- Boost activities and increase the business efficiency.
- Increase the opportunities for approaching the capital market.
- Decrease the capital cost and increase the value.
- Enhance trust.
2.1.4. The principles of corporate governance
(1) Ensure the framework of governance be effective; (2)
Ensure the advantages of shareholders and the basic ownership
rights; (3) Treat all of them equally; (4) Ensure the role of the
advantages linked to the company; (5) Be apparent about the
company activities. (6) The Board and Board of Supervisors run the
company effectively.
2.2. Theory of firm performance
2.2.1. Definition of firm performance
Firm performance is the efficiency of using the total business
means in production, consumption as well as the principles of funding.
The results of business activities as well as the outcome are the results of
company activities after a particular time. (Akal et al., 2015).
2.2.2. The system of evaluation the business activity results
There are three approaches evaluations influenced by
characteristics of the Boards and ownership structure on the business
activity results (BAR) of the corporation.
First is the conventional ruler, which is used for BAR of the
corporation is profit margin on ownership’s investment of ROE

(return on equity) – the profit on property ROA (return on assets).
BAR is evaluated by objectives of making profit of the corporation.
Second is evaluated by the market rigids such as Tobin’s Q (Bhagat
et al, 2008) or the retained surplus (Mitton, 2002). Third is evaluated

manufacturing companies, when the number of female members
increases, the Tobin's Q tends to increase.
c. The number of independent members on the Board of
Management
The percentage of independent Board members in research
companies is generally low. Before 2017, most food manufacturing
companies had no independent members. However, according to the
provisions of Decree 71/2017 / ND-CP, public companies must meet
at least one third of the Board members who are independent
members. This regulation takes effect from 2017, but in 2018 only 4
qualified food manufacturing companies. In 2015, the number of
businesses with 6-7 independent members in the Board of
Management tended to increase in business results, but other groups
had a stability through the years of research.
d. Duality
food manufacturing companies mostly do not have a Chairman
of the Board of Management concurrently as a CEO. The listed food
manufacturing companies are mainly small and medium-sized
enterprises with little foreign investment, not focusing on corporate
governance, so the concurrently chairing of the Chairman of the
Board of Management and the CEO will do. reduce operating costs
of the company and increase operating capacity and achieve better
business results.
e. Audit committee
The establishment of specialized sub-committees under the Board

of Management is rare among food manufacturing companies. Only a
number of large-scale enterprises such as Vinamik, Masan, Sabeco and
Lam Son Sugar, Kido, Hai Ha, Bibica, Habeco have established a
number of specialized sub-committees - including audit committee.
Therefore, the independence of the Supervisory Board is a worrying
point, as only nearly 20% of listed food processing enterprises have the
position of the Head of the Supervisory Board or the chairman of the
audit committee is undertaken by an independent member. However,


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increased lower than the general rate (5.1%); The inventory rate of the
entire food manufacturing industry is 78.8% compared to the average
of the whole industry in the first quarter of 2019 at 72.9%. By the end
of 2019, the manufacturing industry maintained a relatively high
growth rate of 9.13%, contributing 3.06 percentage points to the
growth rate of the total added value of the whole economy.
The average ROA of food manufacturing companies over the
years from 2013 to 2018 tended to increase slightly, but from 2015 to
2016 there was a sharp decline due to a sharp decline in the country's
trade growth, the operation of the commodity market. In the case of
less vibrant chemicals, the impact of natural disasters has adversely
affected the operation of industry and the indicators are low
compared to the years.
4.2.5. Characteristics of the board of management and ownership
structure in food processing enterprises listed on Vietnam's stock
market

4.2.5.1. Characteristics of the Board of Management in listed food
manufacturing companies in Vietnam.
a. Board size
The number of members of the Board of Management from
2013 to 2018 remained quite stable at research enterprises, ranging
from 3 to 10 members of the Board of Management. Most enterprises
have the number of members of the Board of Management
fluctuating from 5 to 6 people - accounting for 57.14%. The number
of businesses with 9-10 members on the board of management
accounts for a small number of only 1 to 5 businesses. The listed
food processing businesses adhere to the regulations on the number
of board members according to the Enterprise Law 2014.
b. Number of female members on the Board of Management
The number of female members in the Board of Management
from 0 to 6, mostly at 1-3 members. Companies with 3 or more
female directors in the Board of Management will be much more
effective than 1 or 2 female members. In general, for food

by the market value added (MVA) and economic value added (EVA).
2.2.3. The internal factors affect BAR
Firm size / Firm age / Leverage / Liquidity
2.3. The background of the Board and the ownership structure’s
characteristics
2.3.1. The characteristics of the Board
2.3.1.1. The types of the Boards
Scrutinized the feathers of the Boards, “the component and the
size of the Board are based on the size and complexity of a
company’s business activities” (IFC, 2008). In terms of the quantity,
the bigger the company is, the more complex the business activity
will be. The features of the Board such as the proportion of members

is appropriate, the female rate and the independent members, as well
as the suitable proportion for the governance is essential.
2.3.1.2. The influence of characteristics of the Board on the business
activity.
a. The size of the Board
O’ Connell and Cramer (2010) show the influence of the
Board’s size and proportion of members active or inactive on the
BAR of a company. Rouf (2011) identified that duplication has a
positive impact on earnings results, but it is not statistically
significant with the size of the Board of Directors and the
Supervisory Board. Meanwhile, Gill and Obradovich (2012) show
that the size of the Board of Directors has the opposite effect, while
the parallel has the same direction with the business results. Paniagua
et al. (2018) points out the inverse relationship as the increasing in
the number of board members will reduce corporate of ROE.
Fauzi and Locke (2012) showed a positive correlation of the
size of the Board of Directors and the Supervisory Board with the
ROA and Tobin's Q. While the percentage of the Board members did
not participate in the executive, and the higher the percentage of


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female members in the Board of Directors were, the lower the
business. Shukeri, Shin and Shaari (2012) find that the size of the
Board of Directors is positively correlated with the ROE, while the
independence of the Board is negatively correlated.
b. The independence of the Board

Fama and Jensen (1983) argue that independent Board
members are often viewed as a supervisory role in the Board
compared to management members, because they are independent
and very interested in maintaining their reputation. Accordingly, it is
expected that a correlation exists between the independence of the
Board of Directors, which is measured by the ratio of unmanaged
members, and business results. However, another argument is that
people often trust internal members more than independent members.
More precisely, internal members often have the best information to
help assess effectiveness for senior executives (Baysinger and
Hoskisson, 1990). On the other hand, independent members often
work part-time, and may also be members of other BOMs. That can
make it difficult for independent members to understand the
complexities of the company. Therefore, the independence of the
Board of Directors is considered to have a negative impact on the
business results of the company (Bhagat and Black (2000); Klein;
(1998), Mehran; (1995), but the results are contradictory and show
that The independence of the Board of Directors does not have a
clear correlation with business results.
c. The number of female of the Boards
The presence of female managers is low, but the number of
companies run by female managers is gradually increasing (Ho et al.,
2015). Carter, Simkins, and Simpson (2003); Erhard, Werbel and
Shrader (2003); Campbell & Mínguez (2008) found a positive
relationship between the percentage of female members in the Board
of Directors and business value (as measured by Tobin’s Q).
However, there are opinions that women-run companies will be less

4.2.1. Overview of food manufacturing industry
Processing industry includes material processing activities nature

into a functional material form, meeting the production needs of human
life, turning natural matter into material wealth. The food processing
industry is a part of the industry, using the majority of agricultural inputs
provided to process it into valuable industrial products.
4.2.2. The role of Vietnam's listed food manufacturing businesses
In recent years, Vietnam's food safety industry has been on a
strong growth trend, gradually supplying many highly competitive
products, dominating the domestic market and increasing exports.
Food manufacturing industry is one of the two mission-carrying
industries and is expected to become a key export of Vietnam.
4.2.3. Characteristics of Vietnamese food manufacturing
companies
- Investment in agriculture in general and food processing
industry in particular are highly dependent on natural conditions and
high risks.
- Most of food safety industries are associated with rural raw
materials. Meanwhile, the material areas are dispersed and scattered.
- The construction of food manufacturing companies requires much
less investment capital than other industries, the time for quick capital
turnover, increase the accumulation capacity for the national economy.
- Food manufacturing companies are relatively flexible
distribution, present in every country, anywhere, every region in the
country, depending on the nature of the source of raw materials and
consumption areas.
4.2.4. Business results of food manufacturing companies listed on
Vietnam's stock market
According to the General Statistics Office, as of 2019, the
inventory index of the whole processing industry is estimated to
increase by 15.6% over the same period last year (13.5%), of which the
food manufacturing companies has a stock index of warehouse

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institutional ownership, state ownership, family ownership
- Subsidiary indicators i, t represent enterprises and years
(time) respectively.
- β0 - Coefficient of blocking model
- Βk- Regression coefficient of variables with k = 1,2, ..., 12
- ui, t - Part of the error

effective (Inmyxai and Takahashi, (2010); Amran, 2011; Hsu et al.,
(2013); Singhathep and Pholphirul (2015).
d. Duplication
The parallel is that a member who is both the Chairman of the
Board of Directors and the General Director will affect the business
results of the enterprise. Therefore, Dunn (2004), Ballinger and Marcel
(2010), Quigley and Hambrick (2012) all believe that businesses will
be more effective when the CEO and chairman of the Board should be
two different individuals. Pakistan, Sheikh et al. (2013) examined the
duplication of the Board of Directors, weakening the Board's control
and negatively affecting the business performance of the company. In
contrast, Guillet et al (2013); Peni (2014); Yang and Zhao (2014) argue
that concurrent authority creates a clear and decisive leadership in
shaping and executing corporate strategies.
e. Auditing committee
The Audit Committee Model (UBKT) is a committee under the
Board of Directors, supporting the Board of Directors to perform a

number of important tasks, including supervising activities related to
financial statements, ensuring that The company has policies to prevent
and detect fraud, control the activities of the internal audit department,
monitor the process of risk assessment and handling, supervise
compliance with laws and standards ... Here is a model of corporate
governance approaching the current advanced practice in the world.
2.3.2. Enterprise ownership structure
2.3.2.1. Classification of business ownership structure
Classification of ownership structure by internal ownership
(percentage of shares held by managers), and outside ownership
(percentage of shares held by investors not directly involved in
management business logic). Ownership structure can also be
classified by the degree of concentration (an individual or a group of
related individuals or organizations that own most of the equity of a
business) or a decentralized ownership structure (without individuals
or groups of individuals or organizations that own most of the capital

CHAPTER 4:
RESULTS OF RESEARCH ON THE IMPACT OF
CORPORATE GOVERNANCE TO BUSINESS RESULTS OF
LISTED FOOD MANUFACTURING IN THE VIETNAM
SECURITIES MARKET
4.1. Corporate governance situation in Vietnam
4.1.1. Ensuring the rights and fair treatment of shareholders
The assessment results in the Corporate Governance Report of
Vietnam DNYY 2018 shows that Assurance of rights and fair
treatment of shareholders is the content with the second-best
enforcement score out of four (after the content of information
disclosure and transparency). At the same time, ensuring the legal
rights of shareholders is also one of the two key contents that the

Government and the Ministry of Finance want to promote through
Decree 71/2017 / ND-CP of June 6, 2017 and approve No. 95/2017 /
TT-BTC dated September 22, 2017.
4.1.2. Roles of stakeholders
The CG report of Vietnam SMEs 2018 assessed that these
regulations have brought Vietnam closer to the regulations of other
countries in the region on information disclosure, showing the role of
the stakeholders, in particular environmental and social.
4.2. Situation of the Board of Directors and ownership structure
at food manufacturing companies listed on Vietnam's stock
market in the period of 2013-2018


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13

of the enterprise). It is also possible to classify according to the
characteristics of the owner such as individual ownership, institutional
shareholder ownership, foreign ownership, and family ownership.
2.3.2.2. Influence of ownership structure on business performance
a. Foreign ownership
Anil V. Mishra and Duc Nam Phung (2015); Nguyen Thi Minh
Hue, Dang Tung Lam (2017); Ongore (2011); Koo and Maeng
(2006) confirm that foreign ownership has a positive impact on firm
performance. Pham Huu Hong Thai (2013) proves that state
ownership does not affect firm value, but private ownership and
foreign ownership have a positive impact on company value.
The inverse relationship between foreign ownership and
business results of enterprises is shown in the research of Diaz et al

(2008); Le Thi Phuong Vy and Phung Duc Nam (2011), Konijin et al,
2011). This relationship exists because of low and fragmented
foreign ownership. This is because foreign ownership only holds a
supervisory role when it is centralized as the owner will now capture
accurate information and be able to establish an effective monitoring
mechanism. company.
b. Organizational ownership
Muniandya et al (2016), Dwivedi and Jain (2003), Xu and
Wang (1999); Steiner (1996), shows that institutional ownership rates
have a significant and positive impact on total assets. , there is even
no clear evidence of the firm's business performance (Black, 1998;
Sarkar and Sarkar, 1999; Sarkar and Sarkar, 2000).
c. State ownership
The relationship between ownership structure and business
results and the different research methods and scopes results in
different results in different countries. Lee and Zhang (2011),
Capobianco and Christiansen (2011), Thomsen and Pedersen’s
(2000) show the opposite impact of state ownership on company
earnings. Phung and Mishra (2017), Le Duc Hoang (2015)
demonstrate that State ownership has a negative impact on the

company's business results, while foreign ownership has a positive
impact on the operating results of a listed construction company.
d. Family property
When studying the relationship between family ownership and
the performance of the company, the empirical results are
contradictory. According to empirical studies on family companies of
Anderson and Reeb (2003), Adams et al. (2009), Gonzalez et al.
(2011) show that family ownership has an influence on firm
performance. These studies show that family ownership can reduce

agency costs and increase company efficiency. However, some studies
have shown opposite results. Holderness and Sheehan (1988); Miller et
al. (2007); Adams et al. (2009), Shyu (2011), Gonzalez et al. (2011) ...
argued that family ownership does not affect firm performance.
CHAPTER 3:
RESEARCH METHOD AND RESEARCH MODEL
3.1. Research Methods
The study applied qualitative research methods, namely
preliminary interviews, in-depth interviews and case studies to
explain in-depth the complementary results to the results of
quantitative research.
3.2. Research models
Business results, t = β0 + β1BSIZEi, t + β2BWMNi, t +
β3BINDi, t + β4CDUALi, t + β5ACi, t
+ β6FOWNi, t + β7COWNi, t + β8StateOwni, t +
β9FamOwni, t
+ β10AGE + β11LEV + β12BSIZEi, t + ui, t
In which: Business results - is the result of operations of food
processing enterprises in Vietnam (Tobin’s Q and ROA)
- Independent variables: size of Board of Directors,
Independence of Board of Directors, number of female members of
Board of Directors, Duplicates, Audit Committee; foreign ownership,