Independent members of the Board of Directors (BOD) are expected to become an important bridge between shareholders and the management board at commercial banks. However, in reality, many opinions say that they are just "figureheads" without real power. This situation not only reflects problems in the operating mechanism of banks but also raises urgent requirements for reform.
At the workshop “Building sustainable financial corporations in Vietnam” held on the morning of December 5, Dr. Nguyen Tri Hieu, a financial expert, frankly stated: “The current independent members of the Board of Directors are ‘scarecrows’ due to the mechanism and structure.”
He cited that the minutes of the Board of Directors meetings at Vietnamese banks are often prepared in a standard format. Most of the opinions in the meetings are voted 100% according to the opinion of the Chairman of the Board of Directors, regardless of whether the content is actually reasonable or not.
In contrast, Mr. Hieu cited the way the Board of Directors works in the US. Here, the minutes of the Board of Directors' meetings are recorded in detail, clearly stating each opinion, from support to opposition. If just one member raises a noteworthy opinion, the issue will be discussed. This not only helps increase transparency but also creates an environment for independent members of the Board of Directors to properly perform their roles.
Lawyer Truong Thanh Duc, Director of ANVI Law Firm, agrees that the current mechanism makes the role of independent board members in Vietnam obscure. However, he also points out that some independent board members lack courage and often choose to "agree to keep things quiet" instead of confronting unreasonable decisions.
The root cause of this problem lies in both the selection process and the lack of clear legal regulations. The current selection process is mainly based on relationships, not on criteria of competence and professional ethics. Meanwhile, the law does not have specific regulations on the responsibilities and powers of independent members of the Board of Directors.
To overcome this situation, Dr. Nguyen Tri Hieu proposed that there should be more detailed regulations on the preparation of minutes of Board of Directors meetings, clearly stating the responsibilities of each member. The State also needs to build a legal framework to enhance transparency and accountability in the activities of independent Board of Directors.
The role of independent board members is to represent the voice of small shareholders - who account for 90% of the total number of shareholders. If this role is not performed properly, the interests of shareholders will be seriously affected, leading to a loss of confidence in the banking system.
