Dear Clients and Partners,

As we move through the second quarter of 2026, the landscape of corporate leadership in Vietnam is undergoing a profound transformation. The implementation of the 2026 Corporate Governance Code marks a significant milestone in our nation’s journey toward international market integration and investment transparency. For boards of directors, this is no longer a matter of "checking boxes" or administrative filing; it is a fundamental shift in how value is created and protected.

At BLaw Vietnam, we understand that navigating these regulatory waters requires more than just legal knowledge: it requires a strategic partnership. This guide is designed to help your board not only comply with the new mandates but to leverage them as a competitive advantage in an increasingly complex global economy.

The Paradigm Shift: From Compliance to Outcomes

For years, corporate governance was often viewed through the lens of static compliance. The 2026 Code disrupts this tradition by prioritizing outcomes over processes. The State Securities Commission (SSC) and relevant authorities have aligned the Vietnamese framework with global standards seen in the UK and Japan, moving toward a "Comply or Explain" model that demands substance.

The core philosophy of the 2026 Code is that governance should drive growth. It is no longer sufficient to state that a board meeting occurred; the board must now demonstrate how its decisions align with long-term strategy, risk appetite, and stakeholder interests. This "outcomes-based" reporting ensures that governance remains a living, breathing part of the organization.

A high-level corporate board meeting in a modern Ho Chi Minh City office, featuring diverse professionals engaged in a strategic discussion with digital tablets and architectural views in the background.

The Nine Core Principles of the 2026 Code

The 2026 Corporate Governance Code for public and listed companies in Vietnam is built upon nine foundational principles. These are designed to streamline operations and enhance investor confidence:

1. Clear Roles and Responsibilities: Defining the distinct separation between the Board of Directors and Executive Management to optimize decision-making.
2. Board Competency and Diversity: Ensuring the board possesses a mix of skills, experiences, and perspectives necessary for the industry.
3. Audit and Risk Management: Establishing robust internal controls and an independent audit function.
4. Effective Board Leadership: Promoting the role of independent directors to safeguard minority shareholder interests.
5. Professionalism and Ethics: Codifying a culture of integrity and corporate social responsibility.
6. Transparency and Disclosure: Moving beyond financial metrics to include non-financial and narrative reporting.
7. Shareholder Rights and Equitable Treatment: Facilitating active participation in General Meetings of Shareholders (GMS).
8. Stakeholder Engagement: Recognizing the board’s duty to employees, customers, and the community.
9. Sustainable Value Creation: Integrating Environmental, Social, and Governance (ESG) factors into the core business model.

To ensure your board is aligned with these principles, our experts, such as Long Hoang and Ha Tran, are available to conduct comprehensive governance audits.

Internal Controls and the Expanded Definition of "Materiality"

One of the most significant updates in the 2026 Code is the expansion of Material Controls. Historically, boards focused almost exclusively on financial reporting. Under the new regime, the definition of "material" has been broadened to include:

• Operational Controls: Ensuring that the day-to-day business processes are efficient and resilient against disruption.
• Compliance Controls: Adhering to changing tax regulations and labor laws.
• Narrative and ESG Reporting: Accuracy in how the company communicates its environmental impact and social governance to the public.

Boards are now required to provide a formal declaration regarding the effectiveness of these controls. This requires a real-time review process rather than an annual retrospective. Failure to maintain these controls does not just lead to regulatory fines; it can lead to personal liability for directors under the evolving "failure to prevent" legal doctrines.

A close-up shot of a professional's hands reviewing a digital compliance dashboard on a tablet, showing clear charts and "Material Control" metrics, set against a clean, minimalist workspace.

The "Comply or Explain" Principle: A Tool for Flexibility

The 2026 Code acknowledges that a "one-size-fits-all" approach does not work for every business. The Comply or Explain principle allows companies to depart from specific recommendations of the Code, provided they offer a "cogent and well-justified" reason for doing so.

However, many boards mistake "Explain" for an easy out. In the current 2026 environment, an explanation for non-compliance must demonstrate how the alternative practice still achieves the Code’s underlying objective of good governance. This transparency is vital for maintaining trust with international investors who are looking for clarity, not excuses.

If your board is considering a departure from standard practices, our corporate governance services can help draft justifications that satisfy both regulators and shareholders.

Fraud Prevention and the New Accountability

In alignment with global trends such as the UK’s Economic Crime and Corporate Transparency Act, Vietnam’s 2026 governance landscape places a higher burden on directors to proactively seek out and prevent fraud.

The "I didn't know" defense is rapidly disappearing. Directors are expected to ensure that the company has "reasonable procedures" in place to prevent financial crime. This includes rigorous vetting of M&A targets and joint venture partners. For businesses looking to expand, our M&A advisory team provides the necessary due diligence to protect your board from inherited liabilities.

Strategic Value: Why Governance Matters in 2026

Effective governance is not merely a legal hurdle; it is a catalyst for growth-oriented governance. Companies that embrace the 2026 Code often see:

• Lower Cost of Capital: Investors and lenders view well-governed firms as lower risk.
• Enhanced Reputation: Transparency builds a brand that attracts top talent and loyal customers.
• Efficient Licensing: Adherence to high governance standards can streamline licensing processes with Vietnamese authorities.
• Resilience: Strong internal controls allow boards to pivot faster during economic volatility.

An architectural shot of the Ho Chi Minh City skyline at dusk, symbolizing the growth and modern legal infrastructure of the Vietnamese business environment.

Implementation Roadmap for Your Board

To succeed under the 2026 Code, BLaw Vietnam recommends the following immediate actions:

1. Conduct a Gap Analysis: Compare your current board charters and internal regulations against the 2026 Principles.
2. Define Materiality: Establish what "materiality" means for your specific industry, particularly regarding ESG data.
3. Stress-Test Internal Controls: Don’t wait for an audit. Conduct internal simulations to find weaknesses in your compliance framework.
4. Update Disclosure Protocols: Ensure your narrative reporting is as rigorous as your financial reporting.
5. Engage Professional Counsel: Governance is a specialized field. Partnering with experts like Tien Tran or Suong Doan ensures you stay ahead of regulatory shifts.

Conclusion

The 2026 Corporate Governance Code is an opportunity to redefine how your business operates in the modern world. By moving toward a culture of transparency, accountability, and strategic oversight, your board can ensure long-term sustainability and success.

At BLaw Vietnam, we are thrilled to support our clients through this transition. Our team of highly qualified legal professionals is dedicated to providing innovative solutions that optimize your governance framework and protect your leadership.

If you have questions regarding the new Code or wish to review your board's current compliance status, we invite you to reach out to us. Together, we can build a stronger, more transparent future for your business.

Contact us today to schedule a consultation:

• Explore our Practice Areas
• Meet our Expert Team
• Join the BLaw Network

Two business professionals shaking hands in a bright, professional lobby, reflecting a partnership built on trust and expert legal guidance.

Through the proactive adoption of these new standards, your board will not only meet the requirements of 2026 but will set the stage for a decade of excellence. We look forward to being your trusted partner on this journey.