Dear Clients and Partners,
As we navigate the mid-year of 2026, the landscape of corporate governance in Vietnam has undergone a significant transformation. For businesses operating within our borders: from local enterprises to foreign-invested firms: the "check-the-box" approach to compliance is no longer sufficient. With the recent launch of the Vietnam Corporate Governance Code 2026, the State Securities Commission (SSC) has signaled a clear shift toward international excellence, transparency, and sustainable growth.
At BLaw Vietnam, we understand that the term "audit" often brings a sense of trepidation to many executives. However, by implementing what we call a "Clockwork" legal system, you can transform your annual compliance review from a source of stress into a powerful tool for value creation.
The new 2026 standards are built on a "comply-or-explain" basis, aligning Vietnam with the latest G20/OECD principles. Whether you are a listed public company or a private entity planning for future expansion, understanding these ten pivotal shifts is essential for maintaining your competitive edge and ensuring a seamless audit process.
1. The "Comply or Explain" Mandate
The most fundamental shift in the 2026 framework is the move from mandatory minimums to a "Comply or Explain" approach. This means that while the Code provides a set of best practices, companies are expected to either follow these standards or provide a public, transparent explanation as to why they have chosen a different path. For auditors, the absence of a clear "explanation" for deviations is now a red flag. To optimize your governance, your board must document the rationale behind every strategic governance decision.
2. ESG is Now a Board-Level Responsibility
Sustainability is no longer a marketing buzzword; it is a legal and financial imperative. The 2026 Code explicitly places the oversight of Environmental, Social, and Governance (ESG) risks directly in the hands of the Board of Directors. You are now expected to integrate climate-related risks and social impact into your core business strategy.
3. The Rise of the Specialized Sustainability Committee
To manage the complexities of ESG, the new standards recommend the establishment of a dedicated Sustainability or ESG Committee. This committee is tasked with monitoring the firm’s impact on the environment and society, ensuring that the company’s long-term resilience is not compromised by short-term gains. At BLaw Vietnam, we assist clients in drafting the charters for these committees to ensure they operate with "Clockwork" efficiency.
4. Enhanced Board Diversity and Independence
The 2026 standards put a spotlight on the composition of your board. There is now a stronger emphasis on gender diversity, professional experience, and independent directors. Auditors will look for evidence that your board is not just a group of like-minded individuals, but a robust body capable of challenging management and providing diverse perspectives on complex global issues.
5. Digital Resilience and Cyber-Risk Oversight
In an era where data is the new currency, the 2026 framework introduces specific requirements for cyber-risk resilience. Boards are now held accountable for ensuring that the company has adequate internal controls to protect against data breaches and system failures. This is particularly relevant for businesses undergoing digital transformation or those with significant foreign investment who must comply with both local and international data protection laws.
6. Remuneration Linked to Long-Term Value
Gone are the days of opaque executive bonuses. The new corporate governance standards advocate for remuneration policies that are clearly linked to long-term value creation. Companies must disclose how executive pay aligns with the company’s strategic goals and sustainability targets. This transparency is designed to protect shareholder interests and prevent excessive risk-taking.
7. Strengthening Internal Audit Independence
For a stress-free audit, your internal audit function must be truly independent. The 2026 Code reinforces the role of the Audit Committee in overseeing internal controls. We recommend that our clients utilize our Corporate Governance services to review their internal audit SOPs, ensuring they meet the high bar set by the new regulatory environment.
8. Hybrid General Meetings as a Standard
Reflecting the digital-first reality of 2026, the use of Hybrid General Meetings (GMS): combining physical and online participation: is now encouraged to ensure maximum shareholder engagement. This requires robust technology and clear legal procedures to ensure that voting is secure and that all shareholders, regardless of their location, have a voice.
9. Disclosure of Related-Party Transactions
Transparency regarding Related-Party Transactions (RPTs) has been significantly tightened. The 2026 standards require detailed disclosure of any transactions between the company and its directors, major shareholders, or affiliated entities. Ensuring these transactions are conducted at "arm's length" and are properly documented is a critical component of risk management.
10. Proactive Stakeholder Engagement
Finally, the new standards move beyond shareholder rights to broader stakeholder engagement. This includes employees, customers, suppliers, and the communities in which you operate. A "Clockwork" governance system ensures that communication channels with these groups are open, documented, and integrated into the board's decision-making process.
Actionable Advice for Business Owners: The "Clockwork" Audit Prep
To ensure your business is prepared for the 2026 audit season, our team of knowledgeable attorneys recommends the following immediate steps:
- Conduct a Gap Analysis: Compare your current governance documents (Charters, Internal Regulations) against the 2026 Code.
- Update Your SOPs: Ensure your internal drafting phase for board resolutions follows a clear "Legal Basis -> Risk Analysis -> Proposed Solutions" workflow.
- Formalize ESG Reporting: Start tracking environmental and social metrics now, as these will be required for your 2026 annual report.
- Review M&A Documentation: If you have undergone recent transactions, ensure all M&A and Corporate Finance records are meticulously organized.
- Train Your Board: Ensure all directors are aware of their expanded liabilities and responsibilities under the new standards.
Why Choose BLaw Vietnam?
Navigating the complexities of the 2026 legal framework requires more than just legal knowledge; it requires a partner who can build systems. At BLaw Vietnam, we don't just provide advice: we help you build the "Clockwork" systems that ensure compliance is handled automatically and accurately.
Whether you are looking for tax optimization strategies, navigating employment and labor law, or seeking expert counsel in Intellectual Property, our team is dedicated to your success.
Through the above article, we hope you have gained a clearer understanding of the evolving corporate governance landscape in Vietnam. If you are looking to streamline your compliance processes or have concerns about your upcoming 2026 audit, we invite you to reach out to us.
Contact us today to schedule a consultation with our senior advisors.
Let’s build a future of excellence, together.
Sincerely,
The BLaw Vietnam Team