introduce about the company1 1 history of formation and development pnj company was established on april 28 1988 under the name of phu nhuanjewelry trading shop

The 5 rays represent the 5 elements of the fiveelements, representing the continuous movement and development of PNJ.Themeaning of the company''''s logo is innovation and creativity.Current

ĐẠI HỌC UEH TRƯỜNG KINH DOANH

KHOA KINH DOANH QUỐC TẾ - MARKETING

TIỂU LUẬN

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Executive Summary

This essay will specifically present a management system and analyze the macro and micro factors affecting the quality of that management system, taking the example of aVietnamese company, Phu Nhuan Jewelry Joint Stock Company It will begin by examining the external environment of businesses to understand how legal, social, andmarket forces affect the management system to prevent or deter managerial self-interest Next, the essay will introduce the Board of Directors and examine the structure, procedures, and activities of the Board of Directors It will then consider theresponsibilities and functions of the board of directors It will then present and discussthe Board of Directors, the Board of Directors' subordinate committees, and the company's internal audit department Finally, it will evaluate the effectiveness of the management system of Phu Nhuan Jewelry Joint Stock Company and draw

conclusions Through this, we can better understand and evaluate the management methods, from which we can see the current state and propose feasible solutions to improve the quality of the management system of businesses in Vietnam

Part I: Introduce about the company

1.1 History of formation and development:

PNJ Company was established on April 28, 1988 under the name of Phu NhuanJewelry Trading Shop It started with 20 employees It was then reorganized into thePhu Nhuan Jewelry and Silverware Trading Company, carrying the Phoenix gold barbrand In 1992, PNJ was renamed Phu Nhuan Jewelry and Gemstone Company In

1994, PNJ Company established its first branch in Hanoi This marked the beginning

of a strategy to develop the PNJ system nationwide In January 2004, the companychanged its name to Phu Nhuan Jewelry Joint Stock Company with a registeredcapital of 40 billion dong In March 2009, PNJ Company's shares officially appeared

on the HoSE stock exchange The listed stock code is PNJ, tax code is 0300521758

PNJ's business vision is to be "the leading jewelry manufacturing and retail company

in Asia, holding the number 1 position in the mid- to high-end segment in Vietnam".Along with the business vision is the core value that PNJ aims for: Quality - Integrity -Responsibility - Innovation - Commitment.As a leading address in the jewelryindustry, PNJ always brings to users products with superior quality, sophistication, and

a variety of designs and styles PNJ has outstanding product lines such as corporategift sets, fashion accessories, earrings, necklaces, gold, precious stones, diamonds, etc.Each PNJ product brings with it deep messages and meanings In addition to theabove accessories, PNJ also trades in real estate.The logo design was inspired by thediamond, the most precious gemstone, which is a symbol of eternity andtransparency.The logo design of PNJ clearly shows that the company's activities arevery diverse but are all based on a foundation of core values that have been built andconstantly strengthened.The 5 rays of the symbol are simple, strong but not withoutsoftness and flexibility, characteristic of the jewelry manufacturing industry, which isthe core activity of the enterprise The 5 rays represent the 5 elements of the fiveelements, representing the continuous movement and development of PNJ.Themeaning of the company's logo is innovation and creativity

Currently, the head of PNJ is the chairman of the board of directors Cao Thi NgocDung and the general director of PNJ is Le Tri Thong.Over more than 30 years ofestablishment and development, PNJ Company has gradually become one of thelargest jewelry manufacturing and retail companies in Vietnam PNJ has opened manylarge jewelry centers along with the brands: PNJSilver, PNJ Gold, CAO FINE Jewelry

and Jemma The market expansion has contributed significantly to the development ofthe jewelry industry in our country.After more than 30 years of development andreaching out to the world, as of today, PNJ Company has nearly 6,000 employees with

353 stores located throughout the country In addition, PNJ also has a manufacturingplant that produces over 4 million products/year, providing jobs for over 1,200employees This is considered the largest jewelry manufacturing plant in the Asiaregion The head office of PNJ Company is located at 170E Phan Dang Luu, Ward 3,Phu Nhuan District, Ho Chi Minh City With 353 stores spread across the country, PNJhas a high level of market penetration In recent years, consumers have tended tochoose to buy products from well-known brands instead of buying from small retailstores As a result, the nationwide coverage of PNJ stores has grown significantly.PNJ's stores are concentrated mainly in urban areas, where there is a large population.The people in these areas often have an average income of medium or above, and theirdemand for goods is also higher than in other areas.PNJ Company's customers aretypically individuals or business organizations that have previously made transactions

to purchase products such as gold, silver, precious stones, and diamonds at stores ThePNJ store areas are targeted at each target group as follows:

● PNJ Gold stores: Target female customers aged 25-45 These customerstypically have an income and spending level of medium to high

● PNJ Silver stores: Target young customers aged 15-25 These customers aretypically those who love fashion accessories and like to assert themselves

● CAO Fine Jewellery stores: The target group that PNJ wants to target is income customers These are Vietnamese overseas customers, tourists, etc whoare willing to pay for expensive jewelry

high-● Export of finished gold and silver jewelry: As of now, PNJ is the only companyoperating in this export segment The markets that PNJ targets mainly are themarkets of the United States, Germany, Denmark, etc

As a leading jewelry company that has always stood firm in the face of storms At the

2021 Annual General Meeting, the board of directors set a new vision to transformPNJ into a leading company in Asia in the field of jewelry manufacturing and retail.Helping customers to honor their beauty and bring products to the world stage Toachieve this new goal, PNJ Jewelry Center has been and is currently building adevelopment strategy in both depth and breadth Comprehensively developproduction, distribution, and retail Continue to expand commercial productionactivities with a team of designers - creating unique designs Promote the expansion ofstores, launch more new brands targeting different customer segments in the market.Develop separate product lines with low resolution to reach customers closer Thiswill be a new strategy, a long-term direction for PNJ Currently, PNJ can produce

thousands of jewelry products with a variety of designs These products range in valuefrom low to high, suitable for the wallets of different customer segments.

1.2 Achievements of the company

The expansion of the market has contributed significantly to the development of thejewelry industry in Vietnam This has been recognized through awards andachievements such as:

- Received the First Class Labor Medal in 2003

- Received the ISO 9001:2008 Quality Management System Certification

- Received the Asia-Pacific Quality Award in 2010

- Ranked among the top 500 retailers in Asia-Pacific in 2011

- Received the title of "Vietnamese High-Quality Goods Enterprise" for fiveconsecutive years: 2010, 2012, 2014, 2016, and 2017

- Received the National Brand for four consecutive years: 2010, 2012, 2014, and2016

- Ranked among the top 100 best workplaces in Vietnam for three consecutiveyears: 2015, 2016, and 2017

- Ranked in the top 10 of the 100 sustainable enterprises in Vietnam

- Received the Best Workplace in Asia Award in 2018

- Received the Asia-Pacific Outstanding Enterprise Award in 2020

Part II: Corporate Governance Analysis

2.1 Analysis of factors that shape the quality of governance system in Vietnam

2.1.1 Efficiency of local capital markets

In recent years, the Vietnamese capital market has seen rapid growth in terms of scaleand liquidity, mobilizing large financial resources for the Government, businesses, andlocal governments The capital market has a positive growth rate, the market sizetends to increase, and the legal framework is continuously improved, contributing tomaintaining an important source of capital supply for the economy.To promote therapid and healthy development of the capital market, contribute to ensuring the safety

of the financial system, the legal framework for the capital market is continuouslybeing improved in the direction of strengthening restructuring measures, improvingtransparency and discipline of the market such as the enactment of the SecuritiesLaw (which was amended and supplemented in 2019), Government Decree No.153/2020/ND-CP dated December 31, 2020 on the issuance, trading of corporatebonds in the domestic market and issuance of corporate bonds to the internationalmarket.

In addition, to improve the quality and development of the corporate bond market,strengthen the effective management of state agencies as well as improve thetransparency of the market, the corporate bond trading system at the Hanoi StockExchange (HNX) has officially been put into operation The establishment of thecorporate bond trading system is essential, contributing to creating a diversifiedfinancial system, supporting businesses to raise medium and long-term capital fornational development in order to reduce excessive reliance on the banking creditchannel

On all three banking, securities, and insurance markets, financial products andservices are developing rapidly, with many new products and services emerging tomeet the increasingly high and diverse needs of customers and investors In particular,products are increasingly being developed in the direction of integrating technologydue to the promotion of the application of information technology in the financialsector

Although the capital market continues to maintain positive signals, there are still somelimitations Specifically, the types of products and commodities on the capital marketare still lacking in diversity, investors have few choices; information is nottransparent, there are cases of businesses misusing the purpose of stock pricemanipulation, violations of fraud, inaccurate disclosure of information about thefinancial situation of businesses In addition, on the corporate bond market, there is asituation of using capital not for the purpose of the issuance plan, many individualinvestors do not understand the law clearly in investment and trading of bonds

2.1.2 Extent to which the legal system provides protection to all shareholders

Protecting minority shareholders is considered one of the fundamental issues incorporate governance.In general, laws around the world, including Vietnamese law,have gradually paid more attention to and given considerable attention to the issue ofprotecting minority shareholders, which is also reflected in the current 2020 EnterpriseLaw When the law protecting shareholders is effective, investors have more

motivation to invest in joint-stock companies For companies attracting equity capital,the ability to raise capital will increase once investors are assured that their investedcapital is preserved and developed, and their rights and interests are guaranteed.Goodcorporate governance needs to ensure the basic rights of shareholders as well as equaltreatment between shareholders For common shareholders - those who own commonshares of the company, they have the following rights: the right to attend, speak andexercise voting rights at the general meeting of shareholders; the right to receivedividends at a rate decided by the general meeting of shareholders; the right of firstrefusal to purchase newly offered shares; the right to freely transfer their shares toothers; in addition, shareholders or groups of shareholders holding 10% or more of thetotal number of shares for a continuous period of at least 6 months have additionalrights such as: nominating people to the Board of Directors, the supervisory board,requesting the supervisory board to inspect, requesting a meeting of the generalmeeting of shareholders (Article 115, Enterprise Law 2020).Thus, Vietnamese law hasrecognized the basic rights of shareholders in joint-stock companies This recognitionhas affirmed the guarantee of their rights in the company, further improved theVietnamese legal system on commercial business, helping shareholders have a clearlegal basis to protect their legitimate rights and interests, avoiding acts of infringementand affecting the work process in the company.

2.1.3 Enforcement of regulations

Joint-stock companies are regulated from Article 111 to 176 of the 2020 EnterpriseLaw on capital in joint-stock companies, types of shares, purchase and sale of joint-stock companies, purchase and sale of bonds, regulations on dividends, managementstructure of joint-stock companies, regulations on general meetings of shareholders,regulations on the board of directors, supervisory board, regulations on the director,general director, chairman of the board of directors, disclosure of related interests,annual reports and information to be disclosed

2.1.4 Societal and cultural values

Vietnamese business culture is a subculture within the national culture In it, allindividuals in the business culture are affected by the values of the national culture.Therefore, the reflection of national culture on business culture is inevitable Eachindividual belonging to gender, culture, ethnicity, etc with different cultural identitiesforms for them different foundations of thinking, learning and reacting When

gathered together in the organization, these personality traits will be synthesized tocreate a part of the business culture.

- The changing role of women: The number of women in the labor force isincreasing Women can find jobs outside, can decide the size of their families

on their own, have a higher status in society, and the women's liberationmovement has a great influence on distribution

- Business mindset: Cultural values can influence the way that joint-stockcompanies do business For example, in cultures that value community, joint-stock companies may focus more on creating social benefits In cultures thatvalue competition, joint-stock companies may focus more on achieving thehighest profits

- Business administration: Social and cultural values can affect the way thatpublic companies are governed For example, in cultures that value family-centeredness, public companies may be more likely to prioritize the interests offamily shareholders In cultures that value equality, public companies may bemore likely to prioritize the interests of all shareholders

- Risk tolerance: Social and cultural values can affect the way that publiccompanies deal with risk For example, in cultures that value safety, publiccompanies may be more likely to avoid large risks In cultures that valueinnovation, public companies may be more likely to be willing to accept risk inexchange for potential profits

2.2 Board of Directors: Duties and Liabilities

2.2.1 The operations of the Board

The board of directors is the management body of the company, having full authority

to represent the company to decide and implement the rights and obligations of thecompany that are not within the authority of the general meeting of shareholders Thechairman presides over the board of directors' meetings The chairman is responsiblefor organizing the agenda, scheduling meetings, and coordinating the actions of theboard of directors' committees Thus, the chairman has a significant impact on thegovernance process by determining the content and timing of the issues broughtbefore the board of directors

As the decision-makers on company management issues, the board of directors hascertain rights such as:

● Deciding on matters related to the price of shares and bonds issued;

● Solutions to develop the company's medium- and short-term activities such as:annual development strategy, market expansion, marketing activities,technological innovation;

● Deciding on investment plans and investment projects within the authority;

● Deciding on the establishment of subsidiaries, branches, or the acquisition ofshares in other businesses

The activities of the board of directors take place at board meetings or through writtenconsent At a board meeting, resolutions are presented to the board and voted on Aresolution is completed when it receives a majority of votes in favor When the board

of directors approves written consent, a written resolution will be circulated amongthe board members for them to sign The process is complete when a majority ofdirectors have signed the document Because board of directors activities by writtenconsent do not require prior notice, they can happen faster than activities carried out atboard meetings

In performing its functions, powers, and duties, the board of directors complies withthe provisions of law, the company's charter, and the resolutions of the generalmeeting of shareholders In the event that a resolution passed by the board of directors

is contrary to the provisions of law or the company's charter, causing damage to thecompany, the members who voted in favor of the resolution shall be jointly andseverally liable for personal liability and must compensate for the damage to thecompany; the member who voted against the resolution in question shall be exemptedfrom liability

2.2.2 Board Committees

The board of directors does not consider all matters of the company Some aredelegated to committees These committees may be standing or ad hoc Directors areassigned to committees based on their qualifications For important matters, such asdesigning and approving executive compensation contracts, the committee'srecommendations are brought before the full board for a vote

Audit Committee: According to the provisions of Article 161 of the Law onEnterprises 2020, the Audit Committee is a specialized agency under the Board ofDirectors The audit committee has 2 or more members The Chairman of the AuditCommittee must be an independent member of the Board of Directors The AuditCommittee passes decisions by voting at meetings, soliciting opinions in writing or inother forms prescribed by the Company Charter or the Audit Committee's operatingregulations The Audit Committee has the rights and obligations following service:

- To monitor the accuracy of the company's financial statements and officialdisclosures relating to the company's financial results;

- To review the internal control and risk management system;

- To review transactions with related parties within the approval authority of theBoard of Directors or the General Meeting of Shareholders and makerecommendations on transactions that require approval of the Board ofDirectors or the General Meeting of Shareholders;

- To monitor the company's internal audit department;

- To discuss and approve the relevant terms in the contract with the auditing firmfor the Board of Directors to approve before submitting to the annual generalmeeting of shareholders for approval;

- To monitor and evaluate the independence, objectivity of the auditing firm andthe effectiveness of the auditing process, especially in cases where thecompany uses non-audit services from the auditor;

- To monitor to ensure that the company complies with the law, the requirements

of the regulatory authorities and other internal regulations of the company

2.3 Board of Directors: Selection, Compensation, and Removal

2.3.1 Market for directors

2.3.1.1 Standards and conditions for being a member of the board of directors

Members of the Board of Directors may not be shareholders of the Company andmust meet the following criteria:

- Have full civil capacity, not belong to the subjects that are not allowed tomanage enterprises as prescribed in the Enterprise Law;

- Have professional qualifications and experience in business administration or

in the field, industry, or business of the company and do not have to beshareholders of the company, except where the company's charter providesotherwise;

- Persons related to the company are not currently holding or authorized to holdthe position of Chief Accountant of the Company;

- Do not concurrently serve as members of the Board of Directors, GeneralDirector, or enterprise executives for other enterprises operating in the jewelrymanufacturing and trading industry; watches, eyeglasses;

- Do not own more than 10% of the charter capital of other enterprises operating

in the jewelry manufacturing and trading industry; watches, eyeglasses, exceptwith the approval of the General Meeting of Shareholders;

- Related persons do not jointly own or individually own capital contributions orshares of more than 35% of the charter capital of other enterprises operating inthe jewelry manufacturing and trading industry; watches, eyeglasses, exceptwith the approval of the General Meeting of Shareholders;

- May not concurrently be a member of the Board of Directors at more than five(5) other companies

- Independent members of the Board of Directors must meet the followingcriteria and conditions:

a) Not be a person who is currently working for the company, the parent company,

or the subsidiary of the company; not be a person who has worked for thecompany, the parent company, or the subsidiary of the company for at leastthree (3) consecutive years before that;

b) Not be a person who is currently receiving salary or compensation from thecompany, except for the allowances that the members of the Board of Directorsare entitled to according to regulations;

c) Not be a person who has a spouse, father, adoptive father, mother, adoptivemother, child, adopted child, older brother, older sister, or younger brother who

is a major shareholder of the company; is a manager of the company or thesubsidiary of the company;

d) Not be a person who directly or indirectly owns at least 0.1% of the totalnumber of voting shares of the company;

đ) Not be a person who has served as a member of the Board of Directors, theAudit Committee of the company for at least five (5) consecutive years beforethat, except in cases where he or she is appointed consecutively for two (2) terms

- Independent members of the Board of Directors must notify the Board ofDirectors of the fact that they no longer meet all of the criteria and conditionsspecified in clause 8.1 of this Article and will automatically no longer beindependent members of the Board of Directors from the date they do not meetall of the criteria and conditions The Board of Directors must notify the case of

an independent member of the Board of Directors who no longer meets all ofthe criteria and conditions at the next General Assembly meeting or convene ageneral meeting of shareholders to elect or replace an independent member ofthe Board of Directors within six (6) months from the date of receipt of thenotification from the relevant independent member of the Board of Directors

2.3.1.2 Dismissal, removal, replacement and addition of members of the board of directors.

A member of the Board of Directors will no longer be a member of the Board ofDirectors in the following cases:

5.1 Not eligible to be a member of the Board of Directors according to theprovisions of the Enterprise Law or laws prohibiting being a member of the Board ofDirectors;

5.2 Providing false personal information when submitting to the company as aBoard of Directors candidate;

5.3 Not qualified as defined in Clause 1 of this Article;

5.4 Submit your resignation in writing to the Company's headquarters;5.5 Having a mental disorder and other members of the Board of Directorswho have evidence of professional expertise and no longer have capacity to act;5.6 Failure to attend a meeting of the Board of Directors within six (6)consecutive months, and during this time the Board of Directors does not allowmembers to be absent; except in cases of force majeure

5.7 Dismissed or dismissed by decision of the General Meeting ofShareholders:

5.8 Passed away;

5.9 The company has been terminated

5.10 Other cases as prescribed by law, this Charter and the CorporateGovernance Regulations

2.3.2 Director for compensation

2.3.2.1 Salaries, remunerations and operating expenses of board members

Remuneration, allowances, other benefits, and bonuses are regulated in Article 27 ofthe PNJ Board of Directors Operating Regulations:

27.1 Members of the Board of Directors receive salaries, allowances, bonuses,and other benefits in accordance with the provisions of items 7 and 9, Article 39, theCompany's Charter, Article 14, the Internal Governance Regulations, this Regulation,and the resolution of the Annual General Meeting of Shareholders

27.2 Based on the operating budget for the fiscal year approved by the AnnualGeneral Meeting of Shareholders, the Board of Directors decides unanimously on the

monthly salary of the Chairman of the Board of Directors, the allowances, andmonthly allowances of the members of the Board of Directors.

27.3 Members of the Board of Directors who do not manage and perform tasksthat, in the opinion of the Board of Directors, are outside the scope of the duties of themembers of the Board of Directors, may be paid additional remuneration in the form

of a lump sum, a commission, or other forms as decided by the Board of Directors.27.4 Based on the operating budget for the fiscal year approved by the AnnualGeneral Meeting of Shareholders, the Chairman of the Board of Directors decides onthe types and levels of other expenses for members of the Board of Directors Otherexpenses include but are not limited to travel, communication, socializing, training,conferences, health insurance, and medical care

27.5 Based on the total amount of bonuses for the fiscal year approved by theGeneral Meeting of Shareholders and the results of the performance evaluation, theBoard of Directors decides on the bonuses for the fiscal year for each member of theBoard of Directors in a manner that ensures that the bonuses are commensurate withthe performance of each member of the Board of Directors

27.6 The total amount of salaries, allowances, bonuses, and other expenses ofmembers of the Board of Directors must be presented in the Board of Directors'Activity Report and in other Company reports for the fiscal year in accordance withthe provisions of item 8, Article 39, the Company's Charter and Article 14, the InternalGovernance Regulations

2.4 Board of Directors: Structure and Consequences

2.4.1 Board Independence

2.4.1.1 Independence of the chairman

According to Article 156 of the 2020 Enterprise Law, the following provisions aremade on the Chairman of the Board of Directors:

1 The Chairman of the Board of Directors is elected, dismissed, or removed bythe Board of Directors from among the members of the Board of Directors

2 The Chairman of the Board of Directors of a public company and a stock company specified in point b, clause 1, Article 88 of this Law may notconcurrently hold the positions of Director or General Director

joint-3 The Chairman of the Board of Directors has the following rights andobligations:

a)To establish the program and plan of activities of the Board ofDirectors;

b)To prepare the program, content, and documents for the meeting; toconvene, chair, and preside over the meetings of the Board of Directors;c)To organize the passage of resolutions and decisions of the Board ofDirectors;

d)To monitor the process of implementing the resolutions and decisions

of the Board of Directors;

đ)To preside over the meetings of the General Meeting of Shareholders;

From April 21, 2018, Mr Le Tri Thong will replace Chairman of the Board ofDirectors Cao Thi Ngoc Dung to assume the position CEO of Phu Nhuan JewelryJoint Stock Company Having an independent chairman brings a number of benefits tothe company such as eliminating operational value conflicts It gives the CEO time tofocus completely on the strategy,operations, and culture of the company

The benefits of separating the Chairman of the Board of Directors and the CEO intotwo separate individuals:

- Clearly define the responsibilities between the Board of Directors and themanagement team, and grant specific authority to an individual representingthe Board of Directors to speak

- Support in preventing potential conflicts that may occur during the company'soperation

- In addition, the CEO will have more time to manage the company than having

to double two roles

2.4.1.2 Outside directors

Non-executive directors are individuals appointed to the board of directors of acompany They do not work for the company but serve as advisors or independentdirectors to help the company achieve its goals They participate in planning andpolicy-making activities, and regularly monitor the company's executive directors toensure that they are acting in the best interests of the company's stakeholders

2.4.1.3 Independence standards