A report by the International Finance Corporation (IFC), the World Bank’s private sector arm, calls for stronger commitment to corporate governance by Vietnamese companies, which will make them more competitive in attracting investments and better able to contribute to Vietnam’s economic growth.

The Corporate Governance Scorecard for Vietnam 2011 released late last week urges improvements in the rights and treatment of shareholders and stakeholders, roles and responsibilities of a company’s board, especially its accountability for risk oversight, as well as better disclosure and transparency.

It studied corporate governance practices at the 100 largest companies listed on the Hanoi and HCM City stock exchanges.

While the average corporate governance score rose slightly to 44.7 per cent in 2010 from 43.9 percent in 2009, it is well short of the score of 80 percent which indicates a company meets global best practices.

“Adoption of better corporate governance practices and code will help enhance companies’ ability to attract higher quality of capital at a lower cost,” Simon Andrews, IFC’s regional manager for Vietnam, Cambodia, Lao PDR, and Thailand said.

“We expect the scorecard will help companies and regulatory agencies identify strengths and weaknesses in corporate governance practices, leading to further reforms in this area at both company and regulatory levels,” he said.

Vietnamese companies are still in the early stages of adopting international corporate governance standards and best practices.

Corporate governance continued to be practised largely to meet regulatory requirements rather than to improve business practices./.