Under the law of Vietnam, it is unclear whether the General Shareholder’s Meeting (GSM) of a joint stock company (JSC) is allowed to authorise (or delegate) its power to the Board or to what extent can the GSM delegate its power to the Board, if the former is possible. In particular:

• Article 15.4 of Decree 156/2020 imposes a penalty on the Chairman of the Board if he/she does not report to the GSM on the implementation of the GSM’s resolution except when he/she is authorised by the GSM. This provision suggests that the GSM of a public JSC may delegate the chairperson of the Board to make change to matters already decided by the GSM. Arguably, if the GSM could delegate its power to the chairperson of the Board then arguably the GSM could delegate its power to the Board.

• Additionally, various provisions under Decree 155/2020 stipulate that the GSM of a public JSC may delegate the Board to decide on various matters concerning the issuance of securities by a public JSC under the authority of the GSM.

• On the other hand, the State Securities Commission of Vietnam (SSC) has issued the Official Letter no. 913/UBCK-GSDC on 23 February 2022 (Official Letter 913) expressing their view that, among others, the GSM of a public JSC may not delegate to the Board to decide on matters under the authority of the GSM according to Articles 138.2 and 167.4 of the Enterprise Law 2020.

• In addition, under the Enterprise Law 2020, various authorities of the GSM are “obligations” of the GSM which under the Civil Code 2015 cannot be transferred without consent of the relevant obligees.

Since Article 138.2(n) of the Enterprise Law 2020 allows the company charter of the JSC to provide addition authorities of the GSM, it is unclear if the company charter of a public JSC reinstates the authorities of the GSM that may be delegated to the Board under Decree 155/2020 then whether the GSM may delegate to the Board anymore.

Theoretically speaking, as the Official Letter 913 is not a legislative document, one may ignore the Official Letter 913 of the SSC and base solely on the provisions of Decree 156/2020 and Decree 155/2020 to argue that the GSM of a JSC (including private JSC, as public JSC management is usually stricter than that of a private JSC) may delegate its power to the Board. Nonetheless, this argument might be challenged in practice by the authorities (e.g., the SSC).

This post is written by Le Thanh Nhat and edited by Nguyen Quang Vu.