An examination of independent directors in Vietnam

Vietnam is a transition economy in the Southeast Asia and corporate governance in this country has been newly established after transition process in 1986. Similar to many other developing and emerging economies, Vietnam has weak external governance mechanisms, thus independent director becomes a critical element in corporate governance system as an internal governance mechanism. Further, Vietnam is also a transition economy which has a highly concentrated ownership structure with the dominance of the State as the largest controlling shareholder which may complicate the work of independent directors. Therefore, it is unclear how independent directors contributes to corporate governance and firm performance in a transition economy as Vietnam. Vietnam only releases a new Corporate Governance Code in 2012 which for the first time introduces the notion of independent directors in corporate governance with the requirement that listed companies need to maintain a certain level of independent directors on the board. There is lack of research to examine the function of independent directors in corporate governance in this country. Taking into account the importance as well as the recent adoption of independent director in corporate governance in Vietnam – a transition economy, the thesis examines this type of director from three aspects in three research papers.