After equitization, IPO, the business will become a public company, the founder’s shares may no longer be the majority. At this point, the business of “me” (the founder) becomes the business of “us” (many people). Therefore, enterprises are at risk of certain conflicts related to the interests of groups of shareholders and the interests of retail investors. In fact, many conflicts arise in a variety of ways, such as choosing an incompetent acquaintance to work at the enterprise, implementing decisions and projects that only benefit a few groups of shareholders. shareholders, sign contracts with “backyard companies”, implement projects that benefit a group of shareholders.
Currently, Vietnamese law has regulated the role of independent members in the Board of Directors. However, in reality, the role of independent BOD members has not been promoted for many reasons such as the selection of personnel for the position of independent BOD members affected by some groups of shareholders, no enough human resources are really qualified to act as independent members of the Board of Directors in listed companies, the supervision and support of independent members of the Board of Directors in performing their duties from state management agencies is still limited.
Therefore, from the perspective of shareholders, especially major shareholders, it is necessary to agree on the need for consultation and supervision of independent members of the Board of Directors or a third party to ensure the rights and interests of shareholders. rationally allocate and avoid conflicts, avoid acquiring power to profit or cause risks to the business. To do this, it is necessary to build many things at the same time from internal regulations and regulations to corporate culture. This is a time-consuming task, but it is impossible not to do if you want to have a sustainable operating system.
Before Hoa Binh, another large construction company, Coteccons, also witnessed conflicts between members of the Board of Directors (Photo: HBC).
Inheritance generation
In businesses, the next generation can be employees, but the current reality shows that the successor generation is the descendant of the founder of the business (often called NextGen – Next Generation). It is normal for NextGen to hold important positions in the business to prepare for the replacement of the top positions. However, even highly educated NextGens from foreign universities coming to Vietnam often still face many difficulties related to business and management thinking, market knowledge, management knowledge, relationships relationships, soft skills.
In fact, very few NextGen have had such rapid success in inheriting the family property. When put into management and leadership positions early, NextGen will have big gaps in leadership capacity and knowledge of management tools. In addition, the fact that NextGen does not receive the support and support of other members of the business is easy to happen when the mentality “looks up to see if it’s talented” or “can do it thanks to parents”. not rare. Therefore, NextGen’s work and psychological pressure is great if it doesn’t receive the right support.
One solution corporations should consider if they want to bring the NextGen generation to inherit senior positions soon is to use one-on-one tutoring, consulting, and training from leading industry experts. Although the cost is not small, this is an effective option. In addition to supporting knowledge and thinking, consultants can also act as psychological support and guide how NextGen behaves and performs at work.
Thus, we believe that the three lessons that businesses need to learn are to improve leadership capacity through a realistic recognition of the executive’s capacity, managing conflicts of interest, and finally, proper investment in the next generation. In addition, very important factors that businesses need to seriously implement when growing in scale include standardization, business optimization (also known as restructuring) according to world standards.
Dr. Ngo Cong Truong – MSc Nguyen The Trung
18/01/2023