The research scope of the dissertation within the scope of LOE 2014 and other relevant legal documents has a comparative comparison with some regulations of Japan and the United States on the rights of MIS, the responsibility of the manager of JSC.
VIETNAM ACADEMY OF SOCIAL SCIENCES GRADUATE ACADEMY OF SOCIAL SCIENCES PHAN HOANG NGOC LAWS ON PROTECTING MINORITY SHAREHOLDERS OF JOINT STOCK COMPANY IN VIETNAM: A COMPARATIVE STUDY WITH JAPAN AND THE UNITED STATES OF AMERICA Major: Economic Law Code: 38 01 07 SUMMARY OF DOCTORAL THESIS Hanoi, 2018 THE THESIS IS COMPLETED AT GRADUATE ACADEMY OF SOCIAL SCIENCES Supervisor: Prof PhD Hoang The Lien Reviewer 1: Assoc Prof PhD Nguyen Duc Minh Reviewer 2: Assoc Prof PhD Duong Dang Hue Reviewer 3: Assoc Prof PhD Le Thi Thu Thuy The thesis was defended at the Council level of thesis assessment of the Graduate Academy of Social Sciences At:… hours… , Dated months 2018 the dissertation is publicly in: - National Library - Library of the Academy of Social Sciences under the Vietnam Academy of Social Sciences INTRODUCTION The necessity of the topic Regarding the practice of law enforcement, the violation of rights of minority shareholders (MIS) is relatively common, large shareholders often have conditions to violate the rights of MIS MIS often have less opportunity to participate in management, deciding important issues of the company The rights of MS on property, corporate governance, access to information have not been fully enforced by managers or violated, treated unfairly by large shareholders In terms of meeting the requirements of integration, compared with the laws of many countries, especially developed countries such as Japan, the United States, the provisions on the protecting minority shareholders (PMIS) of the joint stock company (JSC) in our country - Vietnam are still incompatible.The protection mechanism is also not effective, especially, the dealing of violations of the rights of investors - minority shareholders The above-mentioned practices show that it is necessary to further improving the laws and mechanism on protecting the interests of MS in Vietnam, and comparing, referencing the lesson, practice of foreign laws, including Japan and the United States Purposes and research tasks of the thesis Purpose of the study The dissertation reviews and evaluates the results of research on theory and law on the protection of Vietnamese archeology with reference to the law of Japan and the United States Through that proposal to improve the law of protection Research tasks, the dissertation will deploy the following tasks: Firstly, the dissertation clarifies the fundamental theoretical issues on protecting MIS (PMIS); Secondly, the dissertation conducted on the analysis and evaluation of minority shareholders' rights in Vietnam, comparing with the laws of Japan and the US; clarifies similarities and differences; Thirdly, the thesis proposes to improve the law on PMIS Vietnam Scope and subjects of research Scope of the study: The research scope of the dissertation within the scope of LOE 2014 and other relevant legal documents has a comparative comparison with some regulations of Japan and the United States on the rights of MIS, the responsibility of the manager of JSC Research subjects: The dissertation focuses on studying the legal norms on the protection of MIS' rights; internal governance structure; the role of the joint stock company and the responsibility of the managers of the company to ensure the rights of shareholders, compare with similar provisions of Japan, the United States Research Methodology The thesis uses the following research methods: Analytical methods; comparative research methods; Secondary data methods At the same time, the thesis is based on the methodology of Marxism - Leninist doctrine; Ho Chi Minh's thoughts on state and law; Other theories such as: Agency theory, shareholder benefit theory, and some other related theories in term of laws and economics New contributions of the thesis Thesis contributes to determine and clarify the concepts and characteristics of minority shareholder and protections; compare those of Vietnam and the US and Japan; systematize company directors’ role, liability and power in the relationship with shareholders in the countries’ laws From the US, Japan and Vietnam’s laws, compare and clarify the similarities and differences on legal mechanism for protecting minority shareholders Scientific significance The dissertation examines the overall law of Vietnam regarding the protection of minority shareholders' rights in order to present their views and solutions to improve the law protecting minority shareholders in Vietnam The research results of the thesis are scientific research documents for reference, teaching on PMIS and corporate governance in Vietnam Research results are also useful for management agencies, corporate executives, shareholders and other stakeholders to improve corporate governance and governance, and contribute to Theoretical views on the protection of MIS in Vietnam The structure of the thesis Apart from the Introduction, Conclusion and List of References, the list of scientific works, the thesis is divided into 03 chapters and General Conclusion and Recommendations (having the conclusion in each chapter) CHAPTER SUMMARY OF RESEARCH 1.1 Overview of research related to thesis topics This section provides an overview of the international and Vietnamese research in relation to the topic: "Laws on protecting minority shareholders of joint stock company in Vietnam: a comparative study with Japan and the United States of America”, Including the systematization of works, research articles directly related to the topic for analysis and comparison 1.1.1 Situation of international research Theoretical and practical research on the protection of MIS is one of topics of the greatest interest to scientists around the world, and many studies have highlighted the important role of law in protecting shareholders of JSC Scientific studies focus on aspects such as ownership of the company, the legal mechanism of the PMIS and the relationship between the trust of the shareholders and the management of the company The United Kingdom, the United States developed the theory of Representation, determine the relationship of MIS with managers and major shareholders The separation between shareholder ownership and the management; and administration of the company by the board members, directors and other representatives is central issues of corporate governance It is imperative to have supervision by the rules and governance standards of the representative so that they can fulfill their responsibilities with due diligence, loyalty and obligation entrusted by the shareholders 1.1.2 Research situation in Vietnam To systematize researches in Vietnam on theoretical and practical aspects of the law on protection of MIS, the mechanism of protection of shareholders, the results showed that: On measures to protect shareholders, the study put forward a number of groups of measures: protection of shareholders by law, law enforcement; protection by the internal mechanism - self-regulation by the company charter, by the rules of ethics, professional In addition, other measures: shareholders themselves to exercise their rights, litigation manager; request the association of shareholders to represent and protect their interests Regarding the fundamental rights of shareholders, on the basis of the Law on Enterprises (LOE), the categorized studies consisted of four main groups of rights: rights of property, corporate governance, and right of access to information and rights In lawsuit – or the right to restore the interests of shareholders 1.2 Results of research on PMIS The thesis inherits and continues research Comparative studies (especially in the United States and Europe) have addressed and analyzed the rationale for protecting minority shareholders on the basis of Agency theory The results of the comparative study on mechanism for dealing with the company's conflict of interest and shareholders' protection suggest that: there is a significant narrowing of the gap, the difference in terms of protecting shareholders in the law British American compared to Germany, Italy, France and Japan (Harvard University Press, The Anatomy of Corporate Law: A Comparative and Functional Approach) Specifically, countries in the common law system and countries in the civil law system have issued mandatory standards and requirements for companies and investors - shareholders to enter and exit the market (transparency criteria, information control, stock trading standards, corporate governance standards) Another difference is that countries in these two jurisdictions have focused much on investing resources in the management and enforcement of the law on investor protection If the United States intensifies the role of law enforcement, serious and timely treatment of damages caused by the managers (MAN) is not the same as the State actively pursued the criminal case Meanwhile, Germany, Italy, France and Japan have also concentrated their resources similarly to the United States to strengthen their accountability and enforcement of criminal justice Studies in Vietnam have also made comparative studies with Japanese and American laws; Analyze some specific cases of disputes and conflicts among shareholders and propose solutions to protect some TSI's rights Overseas studies (mainly Japan, the United States and Europe) have provided a systematic and approaching methods to the concept of minority shareholder protection (PMIS) of company in the law and this concept from a comparative perspective 1.3 Issues that have not been studied or clarified will be considered by the thesis - Minority shareholders' perception of joint stock companies in Vietnam and other countries despite of some researches had done however, there is no comparative and systematic comparison with Japan, the United States - The relationship between the shareholder and the manager of the company, in terms of the relationship between the owner and the manager, the representatives have the role of protecting the rights of shareholders, minority shareholders; The benefits of minority shareholders are easily violated by the major shareholders as well as the management of the company and other entities - The responsibility of the company and its managers for the interests of MIS; fiduciary relationship, representation between the Board of Directors, the director and the managers with MIS are regulated by law, supplemented by the charter, internal company regulations - The law protecting minority shareholders in Vietnam has not been systematically studied (about the relationship between shareholders and managers of the company, in terms of the relationship between the owner and the manager, represent) 1.4.1 Theoretical background: The dissertation is based on the Marxist-Leninist doctrine and Ho Chi Minh's thought on state and law In addition, research theories are considered for reference use such as: Agency theory, the theory of interests of shareholders, the theory of interests of stakeholders and some other theoretical point of view Directly to the issue of protecting the rights of minority shareholders in JSCs 1.42 Research Methods The dissertation uses the following research methods: In Chapters and of the thesis use mainly synthesis and analysis methods; indirect methodology - synthesis of documents Chapter of the thesis focuses on comparative research methods, in addition to other traditional research methods such as analysis, statistics and synthesis By comparing and contrasting the laws of Vietnam with those of Japan and the United States, the author conducts research on the scope of comparative criteria developed in accordance with the principles of corporate governance provided by the OECD The Criteria for studying of the mechanism of protecting MIS between Vietnam and Japan, and the United States: This is done in accordance with OECD Principles of Corporate Governance, with two principles for ensuring the fundamental rights of shareholders and the responsibilities of the OECD The Board is used as the main comparison criterion of the thesis Firstly, MIS's rights, violations of MIS's rights in the company Second, the responsibilities of the MAN in securing the rights of MIS Considering regulations on loyalty, prudence of managers of the company; The duty to protect the rights of shareholders - to ensure equity in the treatment of shareholders Apart from the above mentioned criteria, the thesis considers other additional factors such as the structure of corporate governance structure; Mechanism of monitoring and evaluating the performance of managers in the company Conclusion of Chapter Throughout the review of Chapter 1, the findings on the protection of MIS’rights, including theoretical and legal studies, have been presented The results of the study have stated the inadequacies of Vietnamese laws and practices, although there is no systematic and comparative study with Japanese and the US laws and practices It does not specify the similarities and differences between Vietnamese PMIS and other countries’ Based on the results of the research on the results of national and international research, the dissertation continues to analyze and compare systematically in practice, laws of Japan and the United States, to clarify the similarities and differences between Vietnam and other countries mentioned above and proposals to improve the law of our country CHAPTER THEORYTICAL ISSUES ON LAWS PROTECTECTING OF MINORITY SHAREHOLDERS OF JOINT STOCK COMPANY IN VIETNAM 2.1 Overview of minority shareholder protection 2.1.1 Conception of minority shareholders Based on the conception of minority shareholders in Vietnam, Japan and the United States, the thesis broadly characterizes the relationship of majority shareholders to minority shareholders with fewer shares, voting rights It is unlikely to affect the price of shares or the company's operations MIS has the nature of: (i) Minority voting power, representing the weak point of the MIS, while the majority voting and dominant is the right of major shareholders (ii) The election of the Board of Directors, with minor voting rights, of course, MIS can not vote to reflect their will unless they make a link and vote cumulatively (3) The management of the company, MIS is not important position, the decisive role of the management of the work of the company that is decided by the managers or the MAS 2.1.2 The need to protect the rights of minority shareholders The rights of MISs are largely dependent on the security responsibilities of managers and major shareholders in the implementation of the Corporate Governance regime (CGR) Laws, regulations and regulations of corporate governance are not complied, synchronized in terms of the mechanism for ensuring the implementation as well as rules binding obligations of major shareholders and managers of the company Subjects have the possibility of violating the right of the MISs (First, the acts of the Supreme People's Court violate the interests of TSIs, such as voting on the rate of dividends, nominating members of the Board of Directors, the Board of Supervisors, Second, behaviors abused by MAN, violating loyalty, prudence) The above is the basis for the legal mechanism of the PMIS, establishing the protection mechanism associated with MIS' relationship with major shareholders and management companies 2.1.3 The purpose of the company and the theory of protecting the interests of shareholders Shareholders are the best interests of the company, and the company is also responsible for protecting the interests of stakeholders such as customers, banks and partners you The company and its managers must have the responsibility and duty to give priority to ensuring the maximum benefit of any subject, to take measures to ensure the benefit of whom? shareholders or those with related interests Considering the purpose of the company, the shareholder value theory, the company has only one purpose is to maximize shareholder benefits In contrast, stakeholder value theory determines that a company is established for the benefit of all stakeholders, not just for the sake of shareholders In terms of protecting the interests of shareholders, especially vulnerable MIS and large shareholders, or managers, the law should protect shareholders through mechanisms that ensure the best interests of shareholders 2.2 Amending the law on the protection of the rights of minority shareholders Legislation is that the state relies on the law, using specific legal means (such as normative documents, applicable documents, acts of exercising rights and obligations) to regulate social relationships, impact, direction of the relationship according to specific objectives set 2.2.1 Revision of the law on minority shareholders' rights In the legal relationship to protect the rights of MIS before the major shareholders and company management, the documents LOE 2014, the Securities Law 2006 and related documents set out the principles of the framework, Internal rules specify The issue is that the law has "hard" rules to apply, defining rights to protect, especially protection of MIS due to weaknesses from violations of major shareholders and abusive behavior The power of the MAN In order to protect its shareholders, Japan issued the principle of "accepting or explaining", under which the company fails to have the right to explain the reasons In the United States, a mandatory mechanism is required for companies to be transparent and accountable for the best interests of their stakeholders management agencies, supervisors and the handling of violations Authorities that govern and enforce the law: administrative bodies, tribunals and other independent organizations (auditors, lawyers, associations protecting investors) It is a positional institution, a role independent of the company, protects the MIS when required or when there is a legal event Considering the independent position of each of these organizations outside the company, also known as the "external protection mechanism" of the company In terms of strengths, the functional protection mechanism of noncompany institutions is more objective and independent, and is trusted by shareholders and other stakeholders On the limitation, the external mechanism will only deal with the request or when the violation has been detected, the consequences of damage to the interests of MIS will be dealt with 2.4.2 Protect minority shareholders by proactively protecting their shareholders' interests MISs actively protect the rights and interests themself, protect the rights of MIS also known as the self-protection rights - by the shareholders exercise the rights that the law allows Under the current situation in Vietnam, the law should provide more supportive measures to help shareholders implement the mechanism of proactive self-protection and participate in the activities of The General Meeting of Shareholders or the management of the company to ensure that its interests not necessarily look to the regulators or the external court 2.4.3 Protect minority shareholders by management mechanism and the responsibility of company managers * Corporate governance mechanisms include statutory regulations issued by the state, rules and internal governance rules established by the company in accordance with law and internal governance requirements, and the shareholders themselves of the company through That is the legal basis to ensure the operation of the company, protect the rights of MIS by the management of the company The system of norms of corporate governance is focused on regulating the roles of managers, the functions of the General Meeting of Shareholders, the Board of Directors, the Board of Directors and the Board of Supervisors; 11 The relationship between the management subjects in ensuring the interests of shareholders In particular, MIS as well as other stakeholders are considered as one of the key issues facing corporate governance * The operation of corporate governance: aims to ensure the interests of shareholders - the company owner, especially the rights of MIS The important goal that CGR’s rules have to regulate is the relationship between minority shareholders and the company's control of the company, the relationship with the representatives, the management of the company Conclusion of Chapter The central research task presented in Chapter is the general theoretical issues on the protection of MIS' rights, which define objectives as well as two comparative criteria (I) rights the MIS in the company; (ii) the responsibilities of the MAN in ensuring the interests of MIS The research results of Chapter serve as the basis for assessing the strengths and limitations of the mechanism on PMIS Chapter will review and identify the actual situation of PMIS in the scope of laws on organization, management and administration of the company In particular, the contents of Chapter are aimed at comparing not only the law and internal management but also the role of the company issuing the regulation on the apparatus and functions of the shareholder meeting, Board of Directors, Supervisory Board, duties of Director and the MAN to ensure the MIS’ interests CHAPTER LAWS ON PROTECTECTING MINORITY SHAREHOLDERS OF JOINT STOCK COMPANY IN VIETNAM IN COMPARING WITH JAPAN AND THE UNITED STATES OF AMERICA 3.1 The role of the laws and the company charter in the protection of minority shareholders 3.1.1 The role of law Shareholders of joint stock companies have been protected by the Law on Securities 2006, the Law on Enterprises 2014 (LOE 2014, from Article 12 110 to Article 171) on the protection of interests of shareholders and companies LOE 2014 regulates the management and administration mechanism of the company in two specific directions: (i) Laws provide the principle of compulsory general regulations; (ii) Give the company the choice, selfdetermination of many issues under its autonomy (a total of 43 articles, the LOE empowerd companies in order to choose the corporate governance’s measure and model); The company has issued internal regulations to different regulations of the LOE The role of the laws in Vietnam is to set the framework standard that the companies choose and apply the corporate governance model; other side, the rights of the shareholders, the responsibility of the company and the management regulated by charter and internal regulations Laws is the basic legal framework for MIS to use as a basis for protection their interests 3.1.2 The role of the company's charter, internal rules and regulations The laws of Vietnam, Japan and the United States also have regulations that facilitate the management and administration of the company, when the registration of the establishment requires the establishment of a company with a number of internal compulsory In Vietnam, in addition to the law, the charter of the company also plays an important role in protecting the rights of shareholders, the content of the company charter must clearly define the rights and obligations of the company's shareholders share the profit; In the United States - Delaware requires the establishment of a Compulsory Register: the name of the company, the number of shares allowed to be issued, the name and address of the representative, of each of the founders In addition to the required information, the rules may also include other information The founding charter is usually not detailed, detailing the organization of activities as defined in the internal regulations (Bylaws) 3.1.3 Measures to protect minority shareholders In general, the state applies the law in combination with the corporate governance standards to protect shareholders through three main aspects: (i) Regulations on shareholders' rights, especially MIS, are entitled to Compensation for damages and the possibility of initiating lawsuits to protect 13 interests; (ii) Regulations on the obligations of related entities, such as the obligations of the company, the management of the company, especially the harmony of the relationship and interests between major shareholders and MIS (iii) It is required to create conditions for shareholders to exercise their rights and request the court to protect their rights and interests Laws that relate to investors are in many jurisdictions of a country, such as corporate law, securities law, bankruptcy laws, etc However, in all legal aspects, Laws relating to the protection of shareholders, the law on companies and securities plays the leading role In the United States and Japan, and in Vietnam, the law sets requirements and penalties for the protection of investors with transparent disclosure obligations; Control of insider trading within the company and regulations on obligations of managers of the company 3.2 Characteristics of laws on minority shareholder Protection in Japan 3.2.1 Overview of the legal framework and law enforcement agencies The responsibilities of the Board of Directors are regulated by the following regulations: Corporate Law, Charter of a company Listed companies are also regulated by the Law on Trading and Financial Instruments; Securities listing regulations issued by stock exchanges (including the Code of Corporate Governance) Group of shareholders, institutional investors also play an important role in monitoring and enforcing corporate governance issues A number of institutional shareholders and investors also have a great influence on corporate governance in Japan, for example, ISS is an institutional investor, proxy adviser to shareholders 3.2.2 About corporate governance and reforms in Japan On May 1, 2015, the revised provisions of the Company Law of Japan have come into force This amendment covers the following: (i) A new model of corporate governance: Companies can now choose to become a company with a supervisory board (Kansatouiinkai-sechikaisha) Accordingly, the company has a supervisory board of its board members (most of whom must be independent board members - outsiders), having a role similar to that of an auditor in a company that does not An 14 independent board member, a longtime traditional model for a joint stock company in Japan (kabushiki kaisha) KK (ii) Amendments those are not required to follow: Listed companies must have at least 01 independent member - outside For specific types of companies (companies must submit annual reports and companies without outside directors), it is obliged to explain the reasons for the application of the " managers outside the board of directors "will not be suitable for the company's own conditions (the compliance or explanation rule) According to revised regulations in 2015, listed companies and companies that are required to submit annual reports must select one of the two governance models: One, at least one member of the Board of Directors outside; Second, there is no one board member from outside, but must explain the reason - if nominating a member of the board will not match the conditions of the company 3.2.3 Popular model and corporate governance structure in Japan * Joint Stock Company (Kabushiki Kaisha) KK A joint stock model is the most common, most common model of a company in practice in Japan Classification of the shareholding company: (i) Close company (kausa kabushiki): The company is characterized, in accordance with the charter of the company, which requires any merger or consolidation company or transfer of company stock must be approved by the company (ii) Open Company: These companies are not modeled as closed company Overall, only the securities issued by the open company may be listed as a stock exchange in Japan * Corporate governance structure - Closed company does not have Board (Board): Closed company selected model can choose not to set up board Consequently, with the majority of Administrators (not the role of the Board / Board) is competent to pass decisions, policies governing the company - The Open Company (KK) must have a Board (Board), and the Closed Company may set up a Management Board if the Company Charter provides, (the law does not mandate) With the corporate model, there is a board of directors and a supervisory subcommittee A company with a management board can set up one 15 supervisory subcommittee Companies with this type of commission are widely accepted in Japan About 240 listed companies have chosen the corporate governance model with the BOD and subcommittee (up to 2015) 3.3 Characteristics of minority shareholders in the United States 3.3.1 General legal framework of a joint stock company Laws governing corporate relationship management, including the Commonwealth Act, federal and state law, securities laws, the Sarbanes Oxley Act 2002, and statutes issued by the Securities and Exchange Commission (SEC) In addition, the listed companies must comply with the corporate standards issued by the Exchange Each state in the United States has a separate governing law on corporations that is categorized into two main groups of states: the State Legislation Group of Companies The rest of the states have enacted their own law firm for use in the state, which is incorporated by many companies into the United States, Delaware A joint stock company, in accordance with US law, is a legal entity established and recognized under the laws of each state 3.3.2 About the internal governance structure of the company The corporate governance structure is governed by the laws of the United States, the enterprise (Vietnam), the issues covered by the division of functions, duties Of corporate governance structures such as the General Meeting of Shareholders, the Board of Directors and the Supervisory Board Some key points are the division of power in governance, corporate governance, the relationship between shareholders and executives (directors, board members) * About the structure of the management, generally in one of two popular models is the Unitary Board and the multi-board (Dual Board) Typical US company law for single-board organizational model In Vietnam, 2014 stipulates that the company has the right to choose one of the two single or multi-assembly models In the United States - Dalaware has a good corporate law, which attracts more than half the total of the top 500 US companies and corporations selected for business registration Delaware is considered to have the best corporate law for tissue Board - authority of the company 16 manager is centralized operating company * Company Executives: Company executives, including CEOs, company presidents, vice presidents, and CFOs, are people who direct the company's day-to-day operations in specialized areas assigned subjects The CEO, the chairman of the company is the person in charge of the general affairs and the highest authority of the company Company executives mainly operate on the individual nature and are representative of the company The Board of Directors appoints or employs executives to supervise the operations of the Board The activities of the supervisor are supervised by the board * Representation and roles of representative: In terms of investing and protecting the best interests of shareholders, representative companies and representative agencies are reflected in Agency Theory explaining the sector The nature of the relationship between the shareholder and the manager 3.3.3 About the rights of shareholders and the liability of the company manager In the United States, the nature of the relationship between the company and the shareholder is the relationship between the trustee and the beneficiary The shareholder's right arises from the right to receive legitimate interests from assets deposited in the company without having to directly exercise the property rights From the legal point of view, the rights of MIS are the ways of behaviors of the subjects recognized by law, the ability of shareholders to handle as prescribed According to some views, the rights of shareholders are derived from contract (The classical theory) Basic rights of shareholders: The rights of shareholders are similar to the basic rights of citizens that the State must guarantee Basic rights of shareholders include property rights, dividends in addition to the rights of management and administration Some important rights of shareholders, TS is the right to vote (electing or dismissing members of the Board of Directors, through the amendment of the charter, the merger of the company); the right of access to information of the company and in particular the right to initiate derivative proceedings; The right to initiate derivative proceedings in accordance with the law 17 provides that when a company's interests are infringed or threatened by a third party, the board of directors shall represent the company, or the shareholder may act on behalf of the company to sue the third party Regarding the obligations of major shareholders, US law requires major shareholders to be obliged to entrust small shareholders This is a regulation that has important and effective implications for protecting the rights and interests of minority shareholders The mandate requires large shareholders to benefit the company and small shareholders About the role of the responsibility of the manager of the company US courts have access to the relationship between company executives (including board members and executives) with the company and the shareholders as trustees The company and the shareholder are the trustees and the trustee is the trustee Thus the manager of the company is obliged to take trust with the company and the shareholder, together with the two fundamental obligations of duty and duty About Delaware: Delaware law requires that board members be careful to the extent that a moderately attentive person will perform in the same situation and must review all information Reasonable when making decisions Board members have a supervisory function so members are obliged to supervise the conduct of their supervisors and employees with care Such a cautious duty requires the Board member to work diligently for the best interests of the company 3.4 Vietnamese laws on protecting minority shareholders in comparing with Japan and the United States 3.4.1 Provisions on minority shareholders’ rights in Vietnam The protection of the interests of investors in Vietnam in the spirit of the Enterprise Law 2014, there are some additional provisions to shape the mechanism to protect the rights of shareholders, including minority shareholders; There are additional methods to facilitate shareholders to exercise the right to sue the manager when necessary; The procedure and procedures of the lawsuit have been simplified and the costs to the shareholders - plaintiffs have been overcome Overall, the LOE 2014 has a number of progressive guidelines, which 18 are initially consistent with some of the OECD corporate governance principles; There are additional regulations to shape the mechanism for protecting minority shareholders 3.4.2 Minority rights of Vietnam in comparison with other countries In line with OECD principles and corporate governance Rights of minority shareholders need protection measures, including three groups: Group on access to information; Group on rights related to shareholder meeting; Group on the right to nominate and nominate members of the Board of Directors Thus, some of the provisions on MIS' rights in Vietnam are compared with Japan and the United States under these three groups of rights 3.4.3 Responsibilities of managers of Vietnamese companies (MAN) compared with other countries LOE 2014 also provides regulations allowing the company to appoint one or more representatives On the responsibility of the representative, the manager, Article 14 of the Law requires: a) To exercise the rights and obligations assigned in an honest, careful and best manner in order to ensure the legitimate interests of the enterprise; b) Being loyal to the interests of the enterprise; Not use information, know-how, business opportunities of enterprises, not abuse use the property of the enterprise for personal benefit; c / To promptly, fully and accurately notify enterprises of their ownership or affiliated persons ownership or shareholding, capital contribution at other enterprises On the Obligations of Board Members and Company Managers: OECD Principles VI.A states that: A board member should act on a wellinformed basis, with integrity, caution and It is in the best interests of the company and its shareholders Vietnam has a number of prudential regulations that are fulfilled by companies like the United States and Japan In addition, some countries also require board members to be cautious, direct loyalty to the shareholders of the company With LOE 2014, only mandates duties for the company without requiring the NQs to be cautious with their shareholders In Japan, the responsibility for the company, MAN must also consider the interests of stakeholders such as banks, creditors Regarding the loyalty obligation of a major shareholder (controlling and controlling the company) for the minority shareholders in the company: 19 In Japan, Vietnam does not stipulate obligations and liabilities to shareholders Minorities on such matters In the United States, major shareholders controlling the company are obliged to minority shareholders in the event of transfer of control of the company to a third party However, this theory is interpreted to apply very narrowly and unpopular 3.4.4 The similarities between Vietnam and Japan and the United States LOE 2014 has some similarities with Japan and the United States in the general rule of law: protection of archaeological rights; To amend and supplement the responsibilities and obligations of the management board of the company; the obligation to disclose information; on derivative litigation; On control of self-interested transactions In addition to basic rights (property rights, governance, access to information), LOE 2014 has added: complete information disclosure and transparency; At the same time, there are some similarities between Japan and the United States regarding administrative and criminal sanctions for insider trading and securities manipulation The responsibility and obligation to protect the rights of shareholders of managers and companies: Vietnamese law has some similarities in principle with the United States in making regulations on responsibilities and obligations of people company management The basic duties of a US company's manager, such as loyalty, honesty and duty of care, have been recognized in some of the regulations of Vietnam (Article 160, LOE 2014) Vietnam has similarities with other countries in the rules: (i) Regulations on disclosure obligations of companies and managers of companies; (ii) To exercise the rights and duties assigned in accordance with the law, the charter of the company, the decision of the General Meeting of Shareholders); (iii) MAN on behalf of individuals or other persons performing work in any form within the scope of work of the company must be explained to the Board of Directors and the Board and only be carried out when approved by the majority of the Board; The above regulations are intended to prevent the self-interest of the company's management, so that shareholders and stakeholders can supervise the management and administration of the company's management That is also the basic obligations of the company manager often found in the laws of 20 Japan, or England, the United States 3.4.5 The differences between Vietnam and the United States and Japan 3.4.5.1 The differences between the United States and Vietnam Rights of Minority Shareholders: Based on the US Commercial Companies Code - more than 30 states compiled; Louisiana Company Law (LBCA) is similar, revised in 2015, the LBCA opens a new phase, enhances TS protection By analogy with the Federal Modeling Company Act, LBCA established one of the most notable regulations, the increased number of protections for minority shareholders (especially closed ones) corporations) Specifically, the most noteworthy are: (i) Legal solutions for shareholders who are treated unfairly, unfairly from the company; (ii) Friendly modifications to shareholders with simplified procedures for the exercise of shareholder rights requiring the company to repurchase shares (iii) The right to agree on the establishment of a new governance mechanism within the company This provision allows shareholders to stick to, voluntarily commit to establish a new, non-traditional corporate structure Responsibility to assure shareholder rights of managers: Vietnam has some general principles, there are no applicable interpretations, or case law of the company management, especially the role of the regulator The court's preference for duty of loyalty, prudence, protect the interests of shareholders In the United States, the interpretation of MAN's obligations, the courts approach the relationship of board members (BOD), executives and shareholders is the trust relationship Therefore, MAN is obliged to take on trust with the company and the shareholders, together with the two basic obligations of loyalty and duty; Give priority to the interests of the company and the shareholders before the individual MAN Internal Governance Mechanism of the United States: One of the key objectives of the governance mechanism, supervision of the management of the company protects the interests of shareholders, against fraud in the financial statements The United States has enacted the Sarbanes-Oxley Act requiring public companies to (i) ensure greater transparency over financial reporting; (ii) supplements the liability of the chief executive officer and CFO for the reliability of the report; (iii) there must be changes in internal 21 controls, accounting work to be more reliable 3.4.5.2 Japan differences from Vietnam Securing the rights of shareholders: is stipulated on the basis of the principles of the Code of Corporate Governance Companies should implement and take appropriate measures to ensure adequate rights of shareholders, including the right to vote and vote at the General Meeting of Shareholders Accountability, careful implementation of the management responsibilities of the BOD in Japan: the Board of Directors is empowered and effectively enforces shareholder responsibility to promote sustainable corporate value development and increase the quality of value in the medium and long term, effective capital and development Firstly, the Board needs to consider the urgency of dialogue and measures to deal with if the majority of shareholders override the company's important issues Second, careful consideration should be given to special rights - the right to be admitted to arbitrators, executives (including the right to require a court order to terminate unlawful conduct or the right to initiate a lawsuit) Selection mechanism for applying corporate governance rules: In Vietnam, although there are corporate governance rules in Decree No 71/2017 / ND-CP dated 06/06/2017 of the Government on guidelines Corporate governance applies to public companies; however, Vietnam does not have "adherence or accountability" principles in corporate governance such as Japan Conclusion of Chapter Chapter The thesis has considered the study of regulations and measures to protect the interests of MIS in Vietnam in accordance with The Law on Enterprise 2014 and related regulations, comparing with Japan and US law Chapter contains four main issues: (i) the role of the laws and the charter of the company in the protection of minority shareholders; (ii) Characteristics of minority shareholder laws in Japan; (iii) Characteristics of minority shareholders legislation in the United States; (iv) Laws on protecting minority shareholders in Vietnam to compare with Japan and the United States 22 In addition to reviewing and evaluating the characteristics of the laws on the minority shareholder protections in Japan and the United States, Chapter has some comparative focusing and analyzing the provisions on Vietnamese MIS’ rights and its managers’ responsibilities in each company The results of Chapter have reached the goal of clarifying the similarities and differences between Vietnam and Japan and the United States GENERAL CONCLUSION AND RECOMMENDATIONS Based on the literature review of the dissertation, we have shown some general points about the protection of MIS, including from theoretical basis, actual laws to recommand solutions of legal improvement on MIS protections The results of the study have presented the inadequacies of Vietnamese laws and practices, but there has not yet been systematic comparative study, which does not clearly indicate the similarities and differences between Vietnam and other countries The dissertation analyzes the regulations and measures to protect the interests of MIS in Vietnam in accordance with the law of enterprises and relevant regulations Chapters and examine theoretical foundations and systems of views, compare analysis and clarify the reality of Vietnam law, compare with the legal framework, regulations on protection of rights of minority shareholders of Japan, USA The research results of the dissertation show that the law of Vietnam has recognized fairly the rights of MIS, to receive the principle of corporate governance in accordance with international practices and standards Besides, there are some shortcomings of the law on the feasibility and limitation of the law, which affects the rights of TSIs such as access to information and transparency; shareholders' rights; Some regulations are not as feasible as controlling the manager's transactions; The Board of Directors and the Board of Supervisors have not ensured their independence and efficiency Some solutions to improve the legal provisions on minority shareholders protection in joint stock companies in Vietnam: 23 Improving the law on protection of minority shareholders in order to limit the inadequacies of the legal system in which LOE 2014 should be implemented on the basis of the principle of: equal to the shareholders Finalizing the corporate governance structure and referring to the application of good corporate governance standards with reference to the experience of Japan and the United States LOE 2014 is the legal framework for the exercise of the rights of TSI In addition, it should be consulted, selective experience of Japan and the United States and other countries structural machinery regulations; corporate governance principles, the regulations of the General Meeting of Shareholders, the Board of Directors, the operation mechanism of independent members; The mechanism of monitoring the effectiveness of the Supervisory Committee Regarding the charter of a joint-stock company, the document shall be formulated and issued by the company assure not contrary to the Law LOE 2014 only regulates the framework of basic principles, leaving the company with many rights to regulate the rights, obligations, relationships between shareholders and MAN; Company management mechanism The rights and obligations of institutions in internal governance are also established by statute At present, shareholders not have high awareness of drafting and issuing charter to protect the rights and interests of shareholders, including MIS This is a problem that the LOE 2014 needs to complete in order to make regulations "hard" in terms of the charter, towards the protection of the MIS, the weak does not have the right to vote when passing the charter content to protect themselves myself The results of comparison and analysis of the thesis on the protection of MIS' rights in Vietnam and comparison with laws and practices of Japan and the United States of America are the basis for proposing, international experience Therefore contributing scientific recommendations, to improve the provisions of Vietnam on the protection of MIS 24 LIST OF SCIENTIFIC WORKS BY THE AUTHOR RELATING TO THE THESIS Phan Hoang Ngoc (2011), “Protectting Investors through Prohibiting and Imposing a duty to abstain or disclose on insiders” Annual Report on Research and Education 2010 - Law and Political Research Papers of the Nagoya University (Nagoya Daigaku), Japan, March 2011, Published in English (pp 161-196) Phan Hoang Ngoc (2015), “Regulation on Representatives of The Draft of Civil Code”, The Special topic on Amendments of The Civil Code – The Journal on Democracy and Law, the Ministry of Justice, Vietnam, 2015, (pp 50 - 60) Phan Hoang Ngoc (2016), “Protecting Shareholders’ rights in Joint Stock companies in Law on Enterprises 2014”, The Journal on Democracy and Law, the Ministry of Justice, Vietnam, No 10 (295), October 2016 (pp 25 - 31) Phan Hoang Ngoc, (2016), “ Laws on Enterprises’ the Mechanism on Corporate Governance toward Shareholder Protection in Vietnam” The Legal Professional Review of The Academy of Justice, No 6, 2016 (pp 18-21; and p.24) Phan Hoang Ngoc, (2016), “Protecting Shareholders’ rights under Requiring of Corporate Governance’ s customary practice and international standards”, Journal of Finance under The Ministry of Finance, Vietnam, No October 2016, (pp 53-56) 25 ... comparison and analysis of the thesis on the protection of MIS' rights in Vietnam and comparison with laws and practices of Japan and the United States of America are the basis for proposing, international... WITH JAPAN AND THE UNITED STATES OF AMERICA 3.1 The role of the laws and the company charter in the protection of minority shareholders 3.1.1 The role of law Shareholders of joint stock companies... legislation in the United States; (iv) Laws on protecting minority shareholders in Vietnam to compare with Japan and the United States 22 In addition to reviewing and evaluating the characteristics