Summary of phd thesis business administration the impact of corporate governance on firm performance in listed food manufacturing companies of vietnams stock market

MINISTRY OF EDUCATION AND TRAINING FOREIGN TRADE UNIVERSITY - SUMMARY OF PHD THESIS THE IMPACT OF CORPORATE GOVERNANCE ON FIRM PERFORMANCE IN LISTED FOOD MANUFACTURING COMPANIES OF VIETNAMS STOCK MARKET Major: Business Administration Code number: 9340101 TANG THI THANH THUY Hanoi – 2020 THE LIST OF PAPERS PUBLISHED The thesis is completed at: Foreign Trade University Science instructor: Dr Nguyen Thi Hien Dr Tran Thi Luong Binh Reviewer 1: Reviewer 2: Reviewer 3: The research will be protected in front of the at council meeting P.T Dong, T.T Thanh Thuy and N.T Thanh Tra; Foreign Investment, Corporate Governance and Firm Performance in Vietnam Listed Companies, Indian Journal of Economics and Development, Volume 15 No 4, pp 499-507 Tăng Thị Thanh Thủy, 2019, Quản trị công ty Thái Lan Malaysia – học kinh nghiệm, Tạp chí nghiên cứu Đơng Nam Á 236, 11/2019, trang 34-44 Tăng Thị Thanh Thủy, 2019, Quản trị công ty Thái Lan học kinh nghiệm cho Việt nam, Tạp chí tài 708, 7/2019, trang 152-156 Nguyễn Thu Thủy, Tăng Thị Thanh Thủy, 2019, Phát triển nguồn nhân lực quốc gia Trung Quốc học kinh nghiệm, Tạp chí kinh tế đối ngoại 115, 3/2019, trang 31-49 Tăng Thị Thanh Thủy, 2019, Tác động quản trị công ty lên hiệu hoạt động doanh nghiệp chế biến thực phẩm niêm yết thị trường chứng khoán Việt Nam, Tạp chí kinh tế đối ngoại 114, tháng 2/2019, trang 52-67 Cao Đinh Kiên, Tăng Thị Thanh Thủy, 2018, Công nghệ tài kinh tế 4.0, Tạp chí kinh tế đối ngoại 112, 12/2018, trang 86-95 Nguyễn Thu Thủy, Cao Đinh Kiên, Tăng Thị Thanh Thủy, 2017, Kiểm soát hoạt động bán khống chứng khoán giới kinh nghiệm Việt Nam, Tạp chí Những vấn đề Kinh tế Chính trị Thế giới, số tháng 6/2017 (254), trang 56-68 24 CONCLUSION The research has systematized the theoretical competency model including: concepts of definition, roles, characteristics and business results Besides, the thesis has clarified the theoretical impact of the characteristics of the board and the ownership structure on the business performance To achieve the research target to consider the impact of two factors of corporate governance: board’s characteristics and ownership structure on business results of the food manufacturing companies listed on the stock market of Vietnam, the thesis used the qualitative research method (expert interview and in-depth interview) and quantitative research (descriptive statistics, regression model) have identified a model of impact review and impact verification of these two groups of factors The results show that the econometric model for database analysis of 42 food processing companies listed on the stock market The results showed that ROA was significantly positively affected by two variables, the number of independent members of the Board of Directors and the Audit Committee, while the Tobin's Q index was affected is statistically significant by the size of the Board of Directors, the number of female members in the Board of Directors and the Auditing Committee, but is negatively affected by the fact that the CEO is a member of the Board of Directors Organizational ownership has a significant positive effect and having a family ownership factor is negatively correlated to business results through Tobin's Q and ROA of firms Finally, on the basis of the research results combined with the practicalities, the graduate student proposes recommendations to improve the business results of the food manufacturing companies listed on the stock market of Vietnam Food manufacturing businesses need to build a reasonable Board of Directors as well as improve the capacity and role of its members INTRODUCTION Research background Corporate governance (CG) not only helps to maximize the use of assets, achieve the set profit goals, but also increases business results, attracts and retains competent people Food manufacturing industry is an industry in which Vietnam has many advantages and potentials as one of the Vietnamese industries prioritizing development to 2025, with a vision to 2035 Vietnam food manufacturing industry is on strong momentum and bringing many investment opportunities for domestic and foreign businesses In order to promote our country's food manufacturing industry, it is necessary to improve the business results of these businesses Researching the impact of CG on two factors: characteristics of the board and ownership structure to business results of listed food manufacturing companies will help to make recommendations on corporate governance to contribute to improving business results of food manufacturing companies in Vietnam in particular and companies listed on the stock market in general Therefore, the topic "The impact of corporate governance on firm performance in listed food manufacturing companies of Vietnams stock market" is very necessary and meaningful for implications in both theory and practice Research gap Studies of the impact of CG on the characteristics of the board and ownership structure to business results show inconsistent results Due to the importance of ownership structure and the diversity of ownership structures in businesses today, especially in developing countries, it is necessary to have studies on the relationship between ownership structure, characteristics of the board and business results These studies in Vietnam focus on companies in the financial industry, not many studies have been conducted and analyzed corporate governance for the industry, while each industry with its own 23 characteristics will bear the affected by various impact factors Research question - How nature and basic characteristics of corporate governance, business performance of listed food manufacturing in Vietnam? - The impact level of corporate governance through two factors: board’s characteristics and ownership structure to business performance in Vietnam food manufacturing companies? - Are there any solutions with special significance for corporate governance reform to improve operational efficiency for in Vietnam food manufacturing companies? Research objective ‾ Theoretical researches related to the characteristics of the board, ownership structure and business performance, the impact research model among these factors, ‾ Study the status of board’s characteristics, ownership structure in food manufacturing companies, thereby making comments and assessments ‾ Proposing solutions related to the board of directors and ownership structure for food manufacturing companies and proposing to the state management agency to enhance corporate governance activities to improve results business activities Research object and scope 5.1 Research object The main objects of research are: board’s characteristics and ownership structure affecting business results of food manufacturing companies listed on Vietnam's stock exchange the research examines the basic theories and the reality of corporate governance, board’s characteristics, ownership structure and business performance in businesses 5.2 Research scope ‾ Scope of content: the research provides an overview of the theory of corporate governance, business performance of the company 5.2.2.2 Decreased share of state ownership and family ownership Research shows that state ownership does not create a good control mechanism to supplement business performance monitoring Food manufacturing companies need to carry out ownership restructuring, especially companies with state ownership and family ownership; in the direction of reducing the state ownership rate, reducing the increase in foreign ownership and the policies planner should introduce policies to encourage foreign owners and limit the state owners in the public In order to increase operational efficiency, companies need to restructure their ownership, especially stateowned companies, in the direction of reducing state ownership, increasing foreign ownership and policies planner should introduce policies that encourage foreign owners and restrict the state owners from being in companies 5.3 Recommended to regulators Developing sanctions to improve efficiency of law enforcement in corporate governance in Vietnam Strict regulations and controls to improve transparency when disclosing information Improve the capacity and effectiveness of associations and social organizations 22 of foreign investors in listed food manufacturing companies Specifically, companies need to increase the participation rate of foreign investors in the management and administration of production and business activities of companies so that foreign investors have the opportunity to participate directly managing the company, improving the company's governance and competitiveness and giving the company the opportunity to access the world's modern advances and machinery, reaching out to international market and increase capital mobilization Currently, the shareholding rate of foreign investors is limited to 49%, which can reduce the ability to hold large shares and reduce foreign shareholders' incentive to supervise the operation of the business When the ownership rate exceeds 51%, foreign investors will have more opportunities to participate directly in the corporate governance The fact that the share rate of a company held by foreign individuals and organizations is limited to a certain percentage, creating barriers for foreign investors to boost investment in domestic enterprises Enterprises can issue exclusive types of shares for foreign investors: Increasing foreign ownership in listed companies is not only a measure of easing the limit, but allowing enterprises to issue an additional percentage shares without voting rights for foreign investors In addition, the research results have not shown the role of organizational shareholders in monitoring business activities when the ownership ratio of the organization positively affects the company's business results Therefore, it is very necessary for food manufacturing companies to properly build this ownership ratio and attract the investment participation of organizational members, as well as to attract foreign investment into operations of the company, in order to promote the supervisory role of these professional institutional investors The food manufacturing companies should have preferential policies to attract organizations to invest in their businesses Institutional investors are the main force in the capital markets and they have strong financial resources Researching the impact of corporate governance factors affecting the business performance of companies, the research limits the study of two corporate governance factors: characteristics of the board and structure ownership of the business ‾ Scope of space: 42 food manufacturing companies listed on Ho Chi Minh City and Hanoi Stock Exchange Of which 15 companies listed on the Hanoi Stock Exchange and 27 companies listed on the Ho Chi Minh City Stock Exchange the research also limits the study of CG from 2013 to 2018, vision to 2030 ‾ Scope of time: the research chooses the study period from 20132019 because before 2012 most Vietnamese companies did not have management reports, in the period of 2012-2014, management reports were prepared but limited information Research structure The structure of the research is divided into five chapters including Chapter 1: Overview of the research situation; Chapter 2: Rationale on the impact of board’s characteristics and ownership structure on the business performance of the companies; Chapter 3: Research method and research model; Chapter 4: Research results on the impact of board’s characteristics and ownership structure on the business results of food manufacturing companies listed on Vietnam's stock market; Chapter 5: Solutions related to the board and ownership structure to improve business results in food manufacturing companies listed on Vietnam's stock market 21 CHAPTER 1: OVERVIEW OF THE RESEARCH SITUATION At the same time, research shows that the chairman of the board concurrently holding the position of General Director reduces the level of board supervision over the Board of Directors and increases moral risk To reduce ethical risk, there should be rules of transparency and fairness, and compliance with corporate governance principles 5.2.1.2 Encourage the establishment of audit committee The study has shown that audit committees play a very important role in the performance of research firms, so it is important to encourage food processing enterprises to switch to a model with an audit committee, at the same time, clear regulations on the institution of the audit committee to ensure the functions and powers are not affected by the board of directors or the executive board Auditing committee should have regular interaction as well as transparency in operations to help investors better understand their working processes and performance In addition, food manufacturing companies should establish appointment committees, compensation committees to help the board of directors as well as the general director evaluate the company's situation, and at the same time promote transparency and publicity believe Members of these committees need a high degree of independence, especially the positions of committee presidents Besides, there is a need for gender diversity in the board of directors, and the board members need to continually improve and apply good governance practices in Vietnam and the world, and grasp the core issues of governance in decisions The Board of Directors needs to enhance the responsibility to monitor and prevent conflicts of interest of members of the Board of Directors, members of the Supervisory Board, General Director and other managers These are the appropriate regulations to help improve the quality of corporate governance 5.2.2 Solutions related to ownership structure in the business 5.2.2.1 Attracting participation of foreign institutional and foreign investors The study shows that it is necessary to increase the participation 1.1 Researches related to characteristics of the board Research on corporate governance focuses on topics such as the issue of representation and the manipulation of the Board of Directors (Zhu, 2016), ownership structure (Phung, 2016), reform of state-owned enterprises ( Anh, 2013), managerial salaries (Adams, 2009), the role of the Board of Directors and independent administrators (Brennan, 2005), investor protection mechanism (Shufa, 2010), the correlation of public governance and corporate performance, corporate governance legal framework, corporate governance characteristics in countries with transition economies (Black et al., 2012) The first studies on corporate governance in Vietnam appeared in 2008, when Hai and Nunoi (2008) with the article "Corporate governance in Vietnam: a system in transition" (Corporate governance in Vietnam in the transition process) gave the first glimpse of the governance factors within the business, although corporate governance was a new concept at the time However, the author asserts that it will become increasingly important when the 2005 Enterprise Law is applied From here, the research on corporate governance in Vietnam is developing more 1.2 Researches related to corporate structure in companies La Porta et al (1999), Claessens et al (2000) argued that a pyramid control structure and majority voting allowed major shareholders to secure their control without pay attention to the rights to cash flow Erkens et al (2012) studied 296 financial companies from 30 countries considered to be the worst affected by the financial crisis, resulting in companies with the ownership ratio of shareholders The higher the organization, the greater the impact of the financial crisis leads to greater fear of loss of shareholder wealth during the crisis 20 CHAPTER 5: SOLUTIONS OF CORPORATE GOVERNANCE TO IMPROVE FIRM PERFORMANCE OF LISTED FOOD MANUFACTURING COMPANIES IN VIETNAM STOCK MARKET 1.3 Research related to business performance Most studies focus on indicators of business performance analysis, how to evaluate and measure business results The most commonly used criteria in the studies: the return on sale (ROS), the return on assets (ROA) or the return on equity (ROE) (Mehran, 1995; Ang, Cole and Line, 2000) However, according to Shah et al (2011), Le et al (2011) said that the measure of business results (profit on revenue - ROS or profit on total assets - ROA ) is similar to the return on equity - ROE In addition, Behn (2003) suggests that business results can be influenced by many different factors such as business goals, size or age Baard and Van (2004).), Kokko and Sjöholm (2004) have shown that firm size is one of the factors affecting firm's business performance Zeitun et al (2007) also showed that there is a relationship between financial leverage (Leverage), age of enterprise (Age), firm size (Size), corporate income tax (Tax) and The proportion of tangible fixed assets (Tangibility) to the business results of enterprises is measured by Tobin's Q 1.4 Studies related to the impact of board’s characteristics and ownership structure on business performance In corporate governance studies, the characteristics of the Board are often found as: (1) board size, (2) proportion of non- executive directors, (3) the diversity of the Board of Directors in terms of the percentage of women in the Board of Directors, (4) CEO duality and ownership structure and concentration 1.4.1 Characteristics of the impact of board’s characteristics, ownership structure on firm performance Jensen (1993), Miwa and Ramseyer (2000), Ferris et al (2003) claimed that there is existence of corrolation between the members of the executive boards through terms and the company’s results of business activities in the supervised companies Qui et al (2000) states that the executive boards having good plans will increase 10% of the 5.1 Trends in food manufacturing industry development in Vietnam Food manufacturing industry is one of the main industry groups selected by the Government of Vietnam to prioritize development in the period of 2025, vision to 2035 However, the majority of Vietnamese food manufacturing has small and medium production size, lack of capital and management experience Vietnam has established a system of agro-forestry and aquatic product processing industry with a designed capacity to ensure processing of about 120 million tons of raw materials per year, with over 7,500 industrial enterprises associated with exports and tens of thousands of small, retail and household agricultural products In particular, some industries or products have modern processing equipment, which is regional and world-class 5.2 Solutions of corporate governance to improve firm performance in food manufacturing companies listed on Vietnam's stock market 5.2.1 The solution group completes the model and operation regulation of the Board of Directors 5.2.1.1 Enhance the independence of directors The research results of the thesis show that the proportion of independent members of the Board of Directors in food manufacturing companies has a positive impact on the business performance of companies Research and propose that independent members of the Board of Directors of listed companies and largescale public companies must prepare evaluation reports on the activities of the Board of Directors 6 19 company’s productivity and decrease 30% propotion in alternating Chief Executive Officer (CEO) The framework of Audit Committee in many countries has proved to be efficient to the corporate governance’s activities The emergence of Audit Committee directed from the board will decrease the cost of corporation’s representative, which will enhance the activity efficiency (Yasser et al., 2011) Doan Ngoc Phuc and Le Van Thong (2014) showed that the features from corporate governance have effects on business efficiency of the privatized corporations in Vietnam Le Quang Canh et al (2015) pointed out that Corporate governance will bring better results of business activities for the corporation; The independence of business activities not have influence on the result of the business activities, in the dynamic but not distinct economy such as Vietnam, it would be likewise that the attainment of two positions, namely CEO and Chairman of the Board (COB) has good influence on the business activities’ result of corporations 1.4.2 The ownership structure influences on the business activities result of corporations The researches have shown various results of the correlation between the company’s activity result and ownership structure For the ownership structure, the majority mentions state-owned companies, director-owned ones and members of the Corporate governance-owned ones; However, the latter depends on countries’ conditions Kaserer and Moldwnhauer (2005) figured out the significant correlation between activities’ results (measured by share cost and Tobin’s Q) and the Board’s proportion ownership structure This also showed the proportion of big shareholders is correlated positively to the company’s activity results Tran Minh Tri and Duong Nhu Hung (2011) showed that Institutional Investors’ proportion has no effects on the business activity results Although the state-owned proportion has no effects on activity efficiency 4.3 Quantitative analysis results ROAi,t = –25,56882 – 0,1757118 * AGE – 0,7049779 * LEV + 2,044225 * B-IND + 6,968383 * AC + 0,1779152* COWN - 0, 3353949 * StateOwn – 2,852891 * FamOwn + 14,185766 There are variables presented for corporate governance that have a statistically significant effect on business performance of food processing firms in Vietnam In which, there are two variables, the number of independent members and the existence of the control committee representing the characteristics of governance and three variables representing the ownership structure of the business (except for foreign ownership ) both have statistically significant effects on ROA At the same time, the capital leverage index representing the business characteristics also shows a significant influence on the relationship between corporate governance and business performance of Vietnamese food processing enterprises listed on the stock exchange Tobin’s Qi,t = 53,31544 + 1,274453 * AGE - 0,8449494 * LEV + 4,716012 * BSIZE +5,333201* B-WMN - 9,178477 * CDUAL + 7,55271 * AC + 0,7905597 * FOWN + 0,5264417* COWN - 4,645285 * FamOwn + 99,032317 Out of a total of variables representing corporate governance, out of variables represent the governance structure that has a statistically significant impact on business performance of food processing enterprises in Vietnam Male and out of variables representing ownership structure had a statistically significant impact on Tobin's Q In addition, besides the variable of Capital leverage, the variable of year of operation also showed statistical significance in the impact on the relationship between corporate governance and Tobin's Q index of Vietnamese food processing enterprises listed on the stock exchange 18 there is a good signal that the number of food manufacturing companies with audit committee tends to increase over the years 4.2.5.2 Ownership structure of listed food manufacturing companies in Vietnam a Foreign ownership The ownership rate of foreign investment funds in listed food manufacturing companies is still in a minority and does not allow funds to have a controlling voice in domestic listed companies Most businesses have low levels of foreign ownership However, foreign investors are increasingly inclined to increase their ownership percentage in this group of businesses Specifically, foreign ownership groups at 20-30%, 40-50%, the number of businesses tends to increase over the years b Owned food manufacturing industry enterprises Ownership rate of institutional investors maintains relatively stable growth over the years, as institutional investors often commit to long-term investments to create stability in the ownership structure and operation of the business Groups with a high proportion of institutional ownership of 20-60% account for a large proportion of the total number of listed food manufacturing companies in Vietnam c State ownership The greater the percentage of state ownership, the lower the performance of a listed CBTP company State ownership has a negative impact on the company's performance when the representative of state capital contribution in the company is not actually a shareholder of the company d Family property The lower the rate of family ownership, the higher the Tobin's Q index among CBTPs, especially the group with a family ownership rate of less than 2%, the performance is significantly higher than the levels of ownership remaining family It shows that there is an inverse relationship between family ownership and business performance in the food manufacturing companies studied measured by Tobin’s Q, it is correlated positively to the one by ROE Do and Wu (2014) found that there is positive correlation between state ownership and the business activity results of the company (measured by ROA and ROE) Nguyen Thi Minh Hue and Dang Tung Lam (2017) found the contrary results with listed companies, but the same one with foreign and listed companies Nguyen Tien Thong (2017) mentioned that companies having national investment has positive influence on the business activity results of the company Phung and Mishra (2017) proved that portion of foreign ownership has good effect on the corporations’ business activity result CHAPTER 2: THEORETICAL BACKGROUND 2.1 Overview of Corporate governance 2.1.1 Definition of corporate governance OECD defines that corporate governance is the internal measures to run and control the company, which links to the relationship between the director board, the board and the shareholders with others The corporate governance also create the framework of the company’s goals, identify ways to reach them and supervise the results In Vietnam, the Decree number 12 on 13/03/2017 of The Financial Department about the corporate governance defines “corporate governance is the system of principles that ensures the company to be run and controlled effectively due to the advantages of shareholders and the related others to the company” This statement is relatively appropriate for best practices and corporate governance 2.1.2 The feature of corporate governance - Corporate governance is based on the separation between management and the ownership of a corporation 8 17 Corporate governance identifies the rights and responsibilities between the advantageous, different members of the company including the shareholders, the Boards, the executive boards, the Board of Supervisor and the related in the company 2.1.3 The role of corporate governance - Boost activities and increase the business efficiency - Increase the opportunities for approaching the capital market - Decrease the capital cost and increase the value - Enhance trust 2.1.4 The principles of corporate governance (1) Ensure the framework of governance be effective; (2) Ensure the advantages of shareholders and the basic ownership rights; (3) Treat all of them equally; (4) Ensure the role of the advantages linked to the company; (5) Be apparent about the company activities (6) The Board and Board of Supervisors run the company effectively 2.2 Theory of firm performance 2.2.1 Definition of firm performance Firm performance is the efficiency of using the total business means in production, consumption as well as the principles of funding The results of business activities as well as the outcome are the results of company activities after a particular time (Akal et al., 2015) 2.2.2 The system of evaluation the business activity results There are three approaches evaluations influenced by characteristics of the Boards and ownership structure on the business activity results (BAR) of the corporation First is the conventional ruler, which is used for BAR of the corporation is profit margin on ownership’s investment of ROE (return on equity) – the profit on property ROA (return on assets) BAR is evaluated by objectives of making profit of the corporation Second is evaluated by the market rigids such as Tobin’s Q (Bhagat et al, 2008) or the retained surplus (Mitton, 2002) Third is evaluated manufacturing companies, when the number of female members increases, the Tobin's Q tends to increase c The number of independent members on the Board of Management The percentage of independent Board members in research companies is generally low Before 2017, most food manufacturing companies had no independent members However, according to the provisions of Decree 71/2017 / ND-CP, public companies must meet at least one third of the Board members who are independent members This regulation takes effect from 2017, but in 2018 only qualified food manufacturing companies In 2015, the number of businesses with 6-7 independent members in the Board of Management tended to increase in business results, but other groups had a stability through the years of research d Duality food manufacturing companies mostly not have a Chairman of the Board of Management concurrently as a CEO The listed food manufacturing companies are mainly small and medium-sized enterprises with little foreign investment, not focusing on corporate governance, so the concurrently chairing of the Chairman of the Board of Management and the CEO will reduce operating costs of the company and increase operating capacity and achieve better business results e Audit committee The establishment of specialized sub-committees under the Board of Management is rare among food manufacturing companies Only a number of large-scale enterprises such as Vinamik, Masan, Sabeco and Lam Son Sugar, Kido, Hai Ha, Bibica, Habeco have established a number of specialized sub-committees - including audit committee Therefore, the independence of the Supervisory Board is a worrying point, as only nearly 20% of listed food processing enterprises have the position of the Head of the Supervisory Board or the chairman of the audit committee is undertaken by an independent member However, 16 increased lower than the general rate (5.1%); The inventory rate of the entire food manufacturing industry is 78.8% compared to the average of the whole industry in the first quarter of 2019 at 72.9% By the end of 2019, the manufacturing industry maintained a relatively high growth rate of 9.13%, contributing 3.06 percentage points to the growth rate of the total added value of the whole economy The average ROA of food manufacturing companies over the years from 2013 to 2018 tended to increase slightly, but from 2015 to 2016 there was a sharp decline due to a sharp decline in the country's trade growth, the operation of the commodity market In the case of less vibrant chemicals, the impact of natural disasters has adversely affected the operation of industry and the indicators are low compared to the years 4.2.5 Characteristics of the board of management and ownership structure in food processing enterprises listed on Vietnam's stock market 4.2.5.1 Characteristics of the Board of Management in listed food manufacturing companies in Vietnam a Board size The number of members of the Board of Management from 2013 to 2018 remained quite stable at research enterprises, ranging from to 10 members of the Board of Management Most enterprises have the number of members of the Board of Management fluctuating from to people - accounting for 57.14% The number of businesses with 9-10 members on the board of management accounts for a small number of only to businesses The listed food processing businesses adhere to the regulations on the number of board members according to the Enterprise Law 2014 b Number of female members on the Board of Management The number of female members in the Board of Management from to 6, mostly at 1-3 members Companies with or more female directors in the Board of Management will be much more effective than or female members In general, for food by the market value added (MVA) and economic value added (EVA) 2.2.3 The internal factors affect BAR Firm size / Firm age / Leverage / Liquidity 2.3 The background of the Board and the ownership structure’s characteristics 2.3.1 The characteristics of the Board 2.3.1.1 The types of the Boards Scrutinized the feathers of the Boards, “the component and the size of the Board are based on the size and complexity of a company’s business activities” (IFC, 2008) In terms of the quantity, the bigger the company is, the more complex the business activity will be The features of the Board such as the proportion of members is appropriate, the female rate and the independent members, as well as the suitable proportion for the governance is essential 2.3.1.2 The influence of characteristics of the Board on the business activity a The size of the Board O’ Connell and Cramer (2010) show the influence of the Board’s size and proportion of members active or inactive on the BAR of a company Rouf (2011) identified that duplication has a positive impact on earnings results, but it is not statistically significant with the size of the Board of Directors and the Supervisory Board Meanwhile, Gill and Obradovich (2012) show that the size of the Board of Directors has the opposite effect, while the parallel has the same direction with the business results Paniagua et al (2018) points out the inverse relationship as the increasing in the number of board members will reduce corporate of ROE Fauzi and Locke (2012) showed a positive correlation of the size of the Board of Directors and the Supervisory Board with the ROA and Tobin's Q While the percentage of the Board members did not participate in the executive, and the higher the percentage of 10 15 female members in the Board of Directors were, the lower the business Shukeri, Shin and Shaari (2012) find that the size of the Board of Directors is positively correlated with the ROE, while the independence of the Board is negatively correlated b The independence of the Board Fama and Jensen (1983) argue that independent Board members are often viewed as a supervisory role in the Board compared to management members, because they are independent and very interested in maintaining their reputation Accordingly, it is expected that a correlation exists between the independence of the Board of Directors, which is measured by the ratio of unmanaged members, and business results However, another argument is that people often trust internal members more than independent members More precisely, internal members often have the best information to help assess effectiveness for senior executives (Baysinger and Hoskisson, 1990) On the other hand, independent members often work part-time, and may also be members of other BOMs That can make it difficult for independent members to understand the complexities of the company Therefore, the independence of the Board of Directors is considered to have a negative impact on the business results of the company (Bhagat and Black (2000); Klein; (1998), Mehran; (1995), but the results are contradictory and show that The independence of the Board of Directors does not have a clear correlation with business results c The number of female of the Boards The presence of female managers is low, but the number of companies run by female managers is gradually increasing (Ho et al., 2015) Carter, Simkins, and Simpson (2003); Erhard, Werbel and Shrader (2003); Campbell & Mínguez (2008) found a positive relationship between the percentage of female members in the Board of Directors and business value (as measured by Tobin’s Q) However, there are opinions that women-run companies will be less 4.2.1 Overview of food manufacturing industry Processing industry includes material processing activities nature into a functional material form, meeting the production needs of human life, turning natural matter into material wealth The food processing industry is a part of the industry, using the majority of agricultural inputs provided to process it into valuable industrial products 4.2.2 The role of Vietnam's listed food manufacturing businesses In recent years, Vietnam's food safety industry has been on a strong growth trend, gradually supplying many highly competitive products, dominating the domestic market and increasing exports Food manufacturing industry is one of the two mission-carrying industries and is expected to become a key export of Vietnam 4.2.3 Characteristics of Vietnamese food manufacturing companies - Investment in agriculture in general and food processing industry in particular are highly dependent on natural conditions and high risks - Most of food safety industries are associated with rural raw materials Meanwhile, the material areas are dispersed and scattered - The construction of food manufacturing companies requires much less investment capital than other industries, the time for quick capital turnover, increase the accumulation capacity for the national economy - Food manufacturing companies are relatively flexible distribution, present in every country, anywhere, every region in the country, depending on the nature of the source of raw materials and consumption areas 4.2.4 Business results of food manufacturing companies listed on Vietnam's stock market According to the General Statistics Office, as of 2019, the inventory index of the whole processing industry is estimated to increase by 15.6% over the same period last year (13.5%), of which the food manufacturing companies has a stock index of warehouse 14 11 institutional ownership, state ownership, family ownership - Subsidiary indicators i, t represent enterprises and years (time) respectively - β0 - Coefficient of blocking model - Βk- Regression coefficient of variables with k = 1,2, , 12 - ui, t - Part of the error effective (Inmyxai and Takahashi, (2010); Amran, 2011; Hsu et al., (2013); Singhathep and Pholphirul (2015) d Duplication The parallel is that a member who is both the Chairman of the Board of Directors and the General Director will affect the business results of the enterprise Therefore, Dunn (2004), Ballinger and Marcel (2010), Quigley and Hambrick (2012) all believe that businesses will be more effective when the CEO and chairman of the Board should be two different individuals Pakistan, Sheikh et al (2013) examined the duplication of the Board of Directors, weakening the Board's control and negatively affecting the business performance of the company In contrast, Guillet et al (2013); Peni (2014); Yang and Zhao (2014) argue that concurrent authority creates a clear and decisive leadership in shaping and executing corporate strategies e Auditing committee The Audit Committee Model (UBKT) is a committee under the Board of Directors, supporting the Board of Directors to perform a number of important tasks, including supervising activities related to financial statements, ensuring that The company has policies to prevent and detect fraud, control the activities of the internal audit department, monitor the process of risk assessment and handling, supervise compliance with laws and standards Here is a model of corporate governance approaching the current advanced practice in the world 2.3.2 Enterprise ownership structure 2.3.2.1 Classification of business ownership structure Classification of ownership structure by internal ownership (percentage of shares held by managers), and outside ownership (percentage of shares held by investors not directly involved in management business logic) Ownership structure can also be classified by the degree of concentration (an individual or a group of related individuals or organizations that own most of the equity of a business) or a decentralized ownership structure (without individuals or groups of individuals or organizations that own most of the capital CHAPTER 4: RESULTS OF RESEARCH ON THE IMPACT OF CORPORATE GOVERNANCE TO BUSINESS RESULTS OF LISTED FOOD MANUFACTURING IN THE VIETNAM SECURITIES MARKET 4.1 Corporate governance situation in Vietnam 4.1.1 Ensuring the rights and fair treatment of shareholders The assessment results in the Corporate Governance Report of Vietnam DNYY 2018 shows that Assurance of rights and fair treatment of shareholders is the content with the second-best enforcement score out of four (after the content of information disclosure and transparency) At the same time, ensuring the legal rights of shareholders is also one of the two key contents that the Government and the Ministry of Finance want to promote through Decree 71/2017 / ND-CP of June 6, 2017 and approve No 95/2017 / TT-BTC dated September 22, 2017 4.1.2 Roles of stakeholders The CG report of Vietnam SMEs 2018 assessed that these regulations have brought Vietnam closer to the regulations of other countries in the region on information disclosure, showing the role of the stakeholders, in particular environmental and social 4.2 Situation of the Board of Directors and ownership structure at food manufacturing companies listed on Vietnam's stock market in the period of 2013-2018 12 13 of the enterprise) It is also possible to classify according to the characteristics of the owner such as individual ownership, institutional shareholder ownership, foreign ownership, and family ownership 2.3.2.2 Influence of ownership structure on business performance a Foreign ownership Anil V Mishra and Duc Nam Phung (2015); Nguyen Thi Minh Hue, Dang Tung Lam (2017); Ongore (2011); Koo and Maeng (2006) confirm that foreign ownership has a positive impact on firm performance Pham Huu Hong Thai (2013) proves that state ownership does not affect firm value, but private ownership and foreign ownership have a positive impact on company value The inverse relationship between foreign ownership and business results of enterprises is shown in the research of Diaz et al (2008); Le Thi Phuong Vy and Phung Duc Nam (2011), Konijin et al, 2011) This relationship exists because of low and fragmented foreign ownership This is because foreign ownership only holds a supervisory role when it is centralized as the owner will now capture accurate information and be able to establish an effective monitoring mechanism company b Organizational ownership Muniandya et al (2016), Dwivedi and Jain (2003), Xu and Wang (1999); Steiner (1996), shows that institutional ownership rates have a significant and positive impact on total assets , there is even no clear evidence of the firm's business performance (Black, 1998; Sarkar and Sarkar, 1999; Sarkar and Sarkar, 2000) c State ownership The relationship between ownership structure and business results and the different research methods and scopes results in different results in different countries Lee and Zhang (2011), Capobianco and Christiansen (2011), Thomsen and Pedersen’s (2000) show the opposite impact of state ownership on company earnings Phung and Mishra (2017), Le Duc Hoang (2015) demonstrate that State ownership has a negative impact on the company's business results, while foreign ownership has a positive impact on the operating results of a listed construction company d Family property When studying the relationship between family ownership and the performance of the company, the empirical results are contradictory According to empirical studies on family companies of Anderson and Reeb (2003), Adams et al (2009), Gonzalez et al (2011) show that family ownership has an influence on firm performance These studies show that family ownership can reduce agency costs and increase company efficiency However, some studies have shown opposite results Holderness and Sheehan (1988); Miller et al (2007); Adams et al (2009), Shyu (2011), Gonzalez et al (2011) argued that family ownership does not affect firm performance CHAPTER 3: RESEARCH METHOD AND RESEARCH MODEL 3.1 Research Methods The study applied qualitative research methods, namely preliminary interviews, in-depth interviews and case studies to explain in-depth the complementary results to the results of quantitative research 3.2 Research models Business results, t = β0 + β1BSIZEi, t + β2BWMNi, t + β3BINDi, t + β4CDUALi, t + β5ACi, t + β6FOWNi, t + β7COWNi, t + β8StateOwni, t + β9FamOwni, t + β10AGE + β11LEV + β12BSIZEi, t + ui, t In which: Business results - is the result of operations of food processing enterprises in Vietnam (Tobin’s Q and ROA) - Independent variables: size of Board of Directors, Independence of Board of Directors, number of female members of Board of Directors, Duplicates, Audit Committee; foreign ownership, ... recommendations on corporate governance to contribute to improving business results of food manufacturing companies in Vietnam in particular and companies listed on the stock market in general Therefore,... Therefore, the topic "The impact of corporate governance on firm performance in listed food manufacturing companies of Vietnams stock market" is very necessary and meaningful for implications in both theory... organizations to invest in their businesses Institutional investors are the main force in the capital markets and they have strong financial resources Researching the impact of corporate governance