Corporate Governance Frameworks in Cambodia, Lao PDR, Myanmar and Viet Nam
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Corporate Governance Frameworks in Cambodia, Lao PDR, Myanmar and Viet Nam Corporate Governance Frameworks in Cambodia, Lao PDR, Myanmar and Viet Nam Please cite this publication as: OECD (2019), Corporate Governance Frameworks in Cambodia, Lao PDR, Myanmar and Viet Nam. This work is published under the responsibility of the Secretary-General of the OECD. The opinions expressed and arguments employed herein do not necessarily reflect the official views of OECD member countries. This document, as well as any data and any map included herein, are without prejudice to the status of or sovereignty over any territory, to the delimitation of international frontiers and boundaries and to the name of any territory, city or area. © OECD 2019 FOREWORD │ 3 Foreword This report takes stock of corporate governance frameworks in four countries: Cambodia, Lao PDR, Myanmar and Viet Nam as part of the OECD-Southeast Asia Corporate Governance Initiative. Launched in 2014, the Initiative supports the regional development of vibrant and healthy capital markets through the advancement of corporate governance standards and practices. Recognising the specific reform needs of Cambodia, Lao PDR, Myanmar and Viet Nam arising from their stage in economic development, the Initiative focuses on these countries to compile information on corporate governance frameworks, identify common challenges and propose areas for reform. The chapters on Cambodia, Lao PDR and Viet Nam were developed by Dr. Le Duy Binh (Chief Economist, Economica Viet Nam). The report was made possible thanks to the valuable input and support of leaders, officials and staff members at the Securities and Exchange Commission (SEC) of Cambodia, Laos Securities Commission (LSC), Lao Ministry of Finance, Securities and Exchange Commission of Myanmar (SECM), Directorate of Investment and Company Administration (DICA) of Myanmar, Ministry of Finance in Viet Nam, the State Securities Commission (SSC) of Viet Nam, the Central Institute of Economic Management (CIEM) and the Viet Nam Chamber of Commerce and Industry (VCCI). A special thank you to staff members of Economica Viet Nam for their support and contribution to the literature review, data compilation, and interviews with experts. 1 The chapter on Myanmar was prepared by Akito Konagaya and Yuya Yamada from the OECD Secretariat. Counterparts in the Securities and Exchange Commission of Myanmar and DICA provided valuable support. The authors are grateful, in particular to staff members of WinCom Solutions Co., Ltd and Trust Venture Partners Co., Ltd who carried out interviews with companies in Myanmar. This publication was developed under the guidance of Ms. Fianna Jurdant with input from Mr. Serdar Celik, Ms. Catriona Marshall and Mr. Kenta Fukami, all of the OECD Corporate Governance and Corporate Finance Division. Logistical and publishing support was provided by Ms. Katrina Baker and Ms. Ana González from the same division. The early drafts of each country stocktaking report, which form the basis of this publication, were presented at the 5th meeting of the OECD-Southeast Asia Corporate Governance Initiative in Yangon, Myanmar, in March 2018. These reports were prepared by: the SEC of Cambodia; Myanmar’s DICA and Ministry of National Planning and Finance; Lao’s LSCO; and, the SSC of Viet Nam. This publication has also benefited from the inputs, information, and presentations at this meeting. The OECD-Southeast Asia Corporate Governance Initiative and the OECD Myanmar Reform Project are thankful for financial support from the Government of Japan. 1 Akito Konagaya left the OECD on 30 June 2018 and has returned to the Financial Services Agency of the Government of Japan. CORPORATE GOVERNANCE FRAMEWORKS IN CAMBODIA, LAO PDR, MYANMAR AND VIET NAM © OECD 2019 TABLE OF CONTENTS │ 5 Table of contents Foreword ................................................................................................................................................ 3 Abbreviations ......................................................................................................................................... 7 1. Introduction ....................................................................................................................................... 9 The economic and corporate landscape ............................................................................................... 9 Measuring up to international standards ............................................................................................ 11 Further improving corporate governance in ASEAN ........................................................................ 13 2. Country stocktaking report: Corporate governance in Cambodia ............................................ 15 Introduction and context of reforms .................................................................................................. 15 Overview of policy developments and progress made at the national level in the field of corporate governance ......................................................................................................................... 18 The outlook for future developments in the field of corporate governance ....................................... 34 References .......................................................................................................................................... 36 Key laws and regulations on company incorporation, securities, listing and corporate governance in Cambodia.................................................................................................................... 37 3. Country stocktaking report: Corporate governance in Lao PDR .............................................. 39 Introduction and context of reforms .................................................................................................. 39 Overview of policy developments and progress made at the national level in the field of corporate governance ......................................................................................................................... 41 Challenges and opportunities in the implementation of an effective national framework for corporate governance ......................................................................................................................... 50 The outlook for future developments in the field of corporate governance ....................................... 53 References .......................................................................................................................................... 54 Regulations related to the securities market in Lao PDR ............................................... 55 4. Country stocktaking report: Corporate governance in Viet Nam .............................................. 57 Introduction and context of reforms .................................................................................................. 57 Overview of policy developments and progress made at the national level in the field of corporate governance ......................................................................................................................... 62 Challenges and opportunities in the implementation of an effective national framework for corporate governance ......................................................................................................................... 80 The outlook for future developments in the field of corporate governance ....................................... 83 References .......................................................................................................................................... 85 Key laws and regulations on company incorporation, securities, listing and corporate governance in Viet Nam .................................................................................................................... 87 5. Country stocktaking Report: Corporate Governance in Myanmar ........................................... 89 Introduction ........................................................................................................................................ 89 Survey results ..................................................................................................................................... 91 Analysis of questionnaire responses by companies ........................................................................... 92 CORPORATE GOVERNANCE FRAMEWORKS IN CAMBODIA, LAO PDR, MYANMAR AND VIET NAM © OECD 2019 6 │ TABLE OF CONTENTS Recommendations ............................................................................................................................ 108 References ........................................................................................................................................ 109 Significant changes introduced under the new Companies Law .................................. 110 Challenges and Opportunities Identified by Myanmar Authorities .............................. 113 Main challenges ............................................................................................................................... 113 Summary of Companies’ Answers to the Questionnaire .............................................. 114 Tables Table 2.1. Protecting Minority Investors in Cambodia – Measure of Quality ...................................... 17 Table 2.2. Listed firms on the Cambodia Securities Exchange (CSX) ................................................