Around 40-50% in total 239 surveyed enterprises did not properly or fully understand the concept of internal control and code of conduct. Many Vietnamese companies conducted internal control and code of conduct formally and ineffectively. Development of internal control and code of conduct is one of the effective solutions for good corporate governance towards sustainable development ensured by strong commitment of all relevant parties. A business where internal control mechanisms are weakened with ineffective code of conduct will lead to ineffective governance and control and will increase the chances of fraud or failure in compliance with relevant laws and regulations. In another hand, a strong internal control mechanism with an appropriate code of conduct will stimulate control activities thus to detect and prevent any fraud/non-compliance as early as better. Besides, an effective internal control mechanism is helpful for leaders to analyse risks, factors and persons in charge to fix the vulnerabilities while control the activities in future, prevent the fraud/non-compliance (including bribery) by minimizing opportunities for violation and control such others as motive or justification for violation. Accordingly, bribery is prevented and anti-corruption is promoted.  Under the Trade Reform Programme via the regional project “Promoting a fair business environment in ASEAN” supported by UK Prosperity Fund, VCCI in cooperation with UNDP published the manual “Guiding application of Internal Control Mechanism and Code of Conduct” for businesses in Vietnam. This manual helps business in Vietnam to step by step set up internal control mechanism and code of conduct which enhances governance capacity, manage risk and prevent violation of law. In such doing, the business community contributes significantly to promote a fair and transparent business environment in respect to the Agenda 2030 for Sustainable Development. The technical substance in the Handbook are designed to suit small and medium businesses in all forms of ownership: private enterprise, company with state capital, SOEs, FDI. The best practice and approach of development and operation of IC and CoC in the world are updated in this manual enabling either big groups or SMEs to refer for application. Please learn more details here here.

Internal control in business help prevent and minimize risks in relating corruption, thus to protect rights of enterprises, build the foundation for sustainable development, promote business integrity.  Today, July 3rd in Ho Chi Minh City, The Food and Foodstuff Association of Ho Chi Minh City (FFA) coordinated with VCCI, UNDP Vietnam and Bristish Embassy in Hanoi to organize the workshop “Enhancing internal control for businesses in food and foodstuff industry”. The workshop aimed to support the businesses in enhancing the efficiency in corporate governance through development, application and improvement of internal control which helps prevent and minimize business risks in relating corruption, ensure the company’s interest, build the foundation for sustainable development and promote business integrity.     The speakers are experts from Deloitte Vietnam, the Academy of Finance and representatives from two big enterprises as Acecook Vietnam and Vinamilk who have deep knowledge and solid experience in internal control mechanism. The representatives of FFA, UNDP, VCCI and FFA’s members also attended the workshop. Through presentations of the speakers and the vigorous debates on the real-world cases, the participants have better understood the importance of risk management and internal control mechanism in the business development, better aware the approach and experience in building this mechanism. As a result, enterprises are able to identify the common risks in business operations, components of Internal Control and have an idea and plan to choose an appropriate internal control framework for the business in food industry. The workshop “Enhancing internal control for businesses in food and foodstuff industry” is an activity of “Government – Business Integrity Initiative – GBII” carried out by VCCI within the regional project “Promoting a Fair Business Environment in ASEAN” implemented by UNDP and and UK Prosperity Fund to facilitate transparent mechanism in both public and private sector, enhance the rule law and fight against corruption, build up typical examples of responsible business. This is the first project supported by UK Prosperity Fund to ASEAN under the Economic Reform Programme. The project is implemented by UNDP in cooperation with UK Government from 2018-2021. In 2019, UNDP closely collaborated with VCCI to develop “Business integrity pledge”. This pledge aims to uphold the core values of integrity, ethical behavior, and accountability, call for collective actions in promoting business integrity in Vietnam. 14 business associations have signed the pledge. Ho Chi Minh City Food and Foodstuff Associations (FFA) is one of those first movers has signed the pledge. The project for building capacity and raising awareness on business integrity was proposed by this association and has been approved by UNDP, VCCI and UK Embassy. The workshop “Enhancing internal control for businesses in food and foodstuff industry” is made in great effort of FFA and highly appreciated by UNDP, VCCI and Bristish Embassy in Hanoi.  Mrs. Do Thuy Van, UNDP program officer emphasized in her speech: “UNDP, VCCI and the British Embassy in Hanoi are willing to support businesses / business associations in Vietnam to build a culture of business integrity for sustainable development and global inclusion” and “To bring the fight against corruption to a new higher level, we need more efforts from the Government and business community”.  

For successful application of internal control and code of conduct in business, the commitment and determination of business leaders, the active participation of managers and staffs are essential. Hanoi, June 19th 2020 – Today, VCCI cooperated with UNDP Vietnam and Bristish Embassy in Hanoi co-organized the training course “Guiding application of internal control and code of conduct in business” to enhance effective governance through dissemination and development of internal control and code of conduct, to facilitate businesses in compliance with the Anti-Corruption Law (2018). The training course is provided by experts from Deloitte Vietnam and Academy of Finance. The representative from British Embassy and UNDP, VCCI attended with participants from businesses, middle level managers, legal officers, HR, internal audit, account-finance officers…          The training course “Guiding application of internal control and code of conduct in business” is an activity of “Government – Business Integrity Initiative – GIBE” carried out by VCCI within the regional project “Promoting a Fair Business Environment in ASEAN” implemented by UNDP and and UK Prosperity Fund to facilitate transparent mechanism in both public and private sector, enhance the rule law and fight against corruption, build up typical examples of responsible business. This is the first project supported by UK Prosperity Fund to ASEAN under the Economic Reform Programme. The project is implemented by UNDP in cooperation with UK Government from 2018-2021. Recently, UNDP closely cooperated with VCCI to develop the Manual guiding businesses in application of internal control and code of conduct. More than 150 participants have been provided training on this manual to apply internal control and code of conduct in business. With the internal control mechanism and code of conduct, business leaders easily find out the shortcoming, loopholes in the institutional system thus to make prompt solutions for adjusting and prevent risks. Those tools are helpful for managers to make appropriate decisions to improve reputation and image of the business.   Mr. Nguyen Quang Vinh, VCCI Secretary General cum Director of VCCI SDforB emphasized in the opening speech: “In order to successfully implement the internal control mechanism and code of conduct in enterprises, the strong commitment and determination of business leaders in addition to the active participation of managers at all levels and entire officers and staff are essential”. Ms. Sitara Syed, UNDP’s Deputy Representative in Vietnam affirmed: “The benefits that an enterprise gains in developing and operating anti-corruption policies will be much greater than the benefit that company get from the business with corruption”. She also recommended: “Business integrity must be at the core of all value systems of the company”.

Corruption existed in business transactions where a company could be a victim and also a culprit in this matter. Therefore, business plays a very important role and participate in positive changes towards greater integrity, transparency and accountability in all aspects of life. Hanoi, June 12th 2020 – Today, Vietnam Association of Consumer Goods Development (VACOD) collaborated with VCCI, UNDP Việt Nam, Bristish Embassy in Hanoi have organized the training course “How to resist corruption in business transaction”. The training course guided the members of business associations to prevent and minimize risks in relation with corruption, ensured the rights of businesses, promoted sustainable development, contributed to business integrity. The participant are the members of VACOD.  The training course “How to resist corruption in business” is an activity of “Government – Business Integrity Initiative – GBII” carried out by VCCI within the regional project “Promoting a Fair Business Environment in ASEAN” implemented by UNDP and and UK Prosperity Fund to facilitate transparent mechanism in both public and private sector, enhance the rule law and fight against corruption, build up typical examples of responsible business. This is the first project supported by UK Prosperity Fund to ASEAN under the Economic Reform Programme. The project is implemented by UNDP in cooperation with UK Government from 2018-2021. In 2019, UNDP closely collaborated with VCCI to develop “Business integrity pledge”. This pledge aims to uphold the core values of integrity, ethical behavior, and accountability, call for collective actions in promoting business integrity in Vietnam. 13 business associations have signed the pledge. Vietnam Consumer Goods Development (VACOD) is one of those first movers to facilitate. The project for building capacity and raising awareness on business integrity was proposed by this association and has been approved by UNDP, VCCI and British Embassy in Hanoi. With the training course “How to resist corruption in business”, VACOD’s effort is highly appreciated by UNDP, VCCI and Bristish Embassy in Hanoi. 

Sign MoU between VCCI and VIMC to provide TA on development of internal control system in compliance with international standards February 21st 2020, in Hanoi, VCCI and VIMC have signed a MoU of providing technical assistance for VIMC to develop internal control system in compliance with international standards. This is an an activity of the Government and Business Integrity Initiative (GBII) implemented by VCCI under the UNDP’s Regional “Promoting A Fair Business Environment in ASEAN” project. The ceremony was attended and witnessed by Mr. Nguyen Canh Tinh, Acting General Director of VIMC and the Board Members as well as Advisory Board, Mr. Nguyễn Quang Vinh, VCCI Secretary General cum Director of SDforB, Mr. Jon Lambe, British Ambassador in ASEAN, Mr. Stephan Taylor, Head of Politics, Bristish Embassy in Hanoi, Mr. Matthew Doidge in charge of ASEAN. Mrs. Sitara Syed, Deputy Chief Representative of UNDP in Vietnam. The technical assistance program for VIMC to build the internal control system according to international standards helped VIMC conduct overview assessment and evaluate the status of the internal control system which included control environment and risk evaluation. This TA is supportive to standardize internal control systems (review of regulations, internal control strategies and policies, operational guidelines. internal audit …). In 2020, VIMC restructured to be joint-stock company.  Along with the change in the management and administration organization, many corporate governance solutions will be implemented. In particular, building an effective internal control mechanism is an indispensable requirement to prevent, detect and handle risks in the operation process and ensure the rights and interests of shareholders. at VIMC.

A study based on collected data from survey of 239 enterprises and in-depth interview of 40 enterprises showed that a large proportion of businesses still misunderstood or incompletely understand the concept of internal control and code of conduct. Many of those believed that internal control is merely the responsibility of the internal controller, not corporate governance.   In compliance, for example in relation with state agency, two key issues would be concerned including (i) a large proportion of enterprises violated some regulations; (ii) non-formal fee for government officers seem to be a common business practice in Vietnam. To explain this fact, businesses convinced some challenges to comply that is difficulty in law implementation or law is overlapped, contradictory and changed often while companies have no legal staffs to handle and update those changes. Moreover, business partnership is mostly formulated from non-formal and familiar relationship and this partnership is popular in Vietnam.      Personal relation, non-formal cost is disguised in various forms taken account of 25-30% in business transaction. One third of the companies surveyed said that they have never applied a competitive procurement method. Abnormal transactions in procurement and sales account for a large proportion in the surveyed companies and this fact seem to be a risk making impact on business integrity. In procurement, not good practice such as «order not for demand», «order not of right quality », «quotation is revised in untransparency» account for 10%.   Similarly, in sales, 11% – 16% of the surveyed companies (equivalent to 24% – 34% of the respondents) recognized these irregularities clearly such as «incorrect invoicing », «do not comply the company sale policies», «do not deliver in accordance with the contract». More alarming is that there are anomalies in human resource management where about 27% to 38% of the respondents recognized that they aware the “inadequate implementation of cost payable to employees” but “do not comply yet the labor code in practice with employees», «recruitment is mostly based on acquaintances, relationships rather than capacity”     See more information here