VN needs to improve corporate governance in banks

At a seminar in HCM City on September 29, a US advisor said Vietnamese banks need to improve corporate governance to reduce the risks to the banking system.

At a meeting sponsored by the State Bank of Vietnam and the US Treasury Department, Le Thanh An, the US consul in HCM City, said the Treasury Department had an agreement with the SBV to provide assistance in a number of areas, including corporate governance. 

David Hawkins, the US Treasury banking advisor, said good corporate governance would create public trust and confidence in banks and the banking system. 

Banks should have an independent risk management function including a chief risk officer with sufficient authority, stature, independence, resources, and access to the board of management.

Risk management information should be audited for accuracy periodically. 

The governance of a bank should be suitably transparent to its shareholders, depositors, stakeholders, and market participants. 

The role of the State Bank of Vietnam should include providing guidance to banks for effective corporate governance. 

It should regularly perform a comprehensive evaluation of banks' overall corporate policies and practices, and evaluate their implementation through inspecting internal reports. 

The central bank should insist on effective and timely remedial action by banks to address material deficiencies in their corporate governance policies and practices.