Only 50%-60% of businesses clearly understand the importance of internal control and code of conduct for sustainable development.

On March 5, 2019, the Vietnam Chamber of Commerce and Industry (VCCI) in coordination with the United Nations Development Program (UNDP) announced the survey results at the consultation workshop with stakeholders to finalize the Draft Report of the research on “Application of internal control mechanism and code of conduct in Vietnamese enterprises: key findings and recommendation”. This report was prepared by the Office of Sustainable Development for Business (VCCI) and TDI Consulting Co. Ltd together with the reputable experts from National Economics University, the Academy of Finance and members of the International Leaders Forum – IBLF Global (UK).

This workshop is one of the core activities in the Business-Government Integrity Initiative – GBII under Project 12 funded by UK Prosperity Fund through the regional project “Promoting a fair business environment in ASEAN” implemented by UNDP. This is the time when the Anti-Corruption Law (revised) is going to take effect in July 2019 that expands the scope of anti-corruption to the non-state sector. 153 participants attended the workshop including delegates from the government agencies, embassies, businesses, business associations, international organizations and press agencies in Hanoi and neighbor areas.

As a finding of the report, only 50%-60% businesses clearly understand the importance of internal control and code of conduct for business sustainable development.

Dr. Vu Tien Loc, Chairman of VCCI while attending and speaking at the workshop said if internal control and compliance are not fully applied in business, bad behaviors are more likely to arise in the company and beyond via global trade and investment supply chains.

Agreed with that point of view, Mrs. Caitlin Wiesen, UNDP Acting Resident Representative for Viet Nam, affirmed the importance of a code of conduct and internal control mechanisms in promoting business integrity. She said the UNDP will support the business community in developing a manual guiding application of code of conduct and internal control mechanisms. Moreover, VCCI will provide training courses to raise awareness and build capacity for businesses. Represented for donor, Mr. Gareth Warth, British Ambassador in Vietnam addressed that promoting business integrity in business is always a priority of the UK Government.   

Accordingly, Associate PhD. Nguyen Van Thang, NEU research team leader said that personal relationships and informal fees are “disguised” in various forms, accounting for 25-30% in business transactions. In addition, irregularities in human resource management, lack of professional manpower or personal relationship-based recruitment created the challenges to comply with laws.

The report reflected the shortcoming and even inefficiencies in management generally. Most misconduct cases are the consequences of poor compliance of internal controls and the code of conduct. Businesses are recommended to respect the core values such as integrity, transparency in order to develop a long term strategy and an appropriate, consistent governance system. Hence the enterprises are given with more opportunities to participate in global supply chain.

At the same time, SOE leaders must strengthen accountability and law enforcement. MNCs should share the best practices and spread out the values of the integrity project to local businesses.

Being able to implement an effective business integrity program, the cooperation and support of stakeholders including from government agencies, government officials to the business community of social organizations are very necessary.

Project news.