Huge Benefit for Businesses to Use Manual on Internal Control and CoC

11:40:26 AM | 24/10/2019

Developing and applying internal control and codes of conduct (CoC) is one effective measure for businesses to grow sustainably by fulfilling their commitments to stakeholders.

As an informer and instructor of responsible business culture for enterprises, heading towards international standards and good practices of ethical business, the Vietnam Chamber of Commerce and Industry (VCCI) has actively worked with partner parties to get financial and technical support to publish the Manual for developing and applying internal control and the code of conduct in business and reference materials for Vietnamese companies with the purpose of offering suggested knowledge and good experience for developing standards and good practices on transparency and business integrity. Internal control procedures and the code of conduct will help address these goals and help them to comply with the amended Law on Anticorruption and foster active cooperation with the Government to create a fair business environment in Vietnam.

Before developing this manual, an assessment report on training needs was conducted in November 2018. The survey result showed that, at the initial level, companies tended to start paying attention to internal control and CoC, but the degree of interest is not high. In many companies, especially Vietnamese (including SOEs and SMEs), the application of internal control and CoC is not complete or only just superficial due to lack of specific regulations and instructions.

Internal control has not been taken into full consideration, for example performance evaluation, risk identification, capacity and resources for internal control application, and staff capacity building for internal control. This reality is due to insufficient guidance and training for employees to properly understand benefits and effective application methods of CoC and Internal control in practice. For CoC, compliance assessment has not been considered part of the end-period performance evaluation. This is also a reason why CoC has not become an important part of business operations.

The report on training needs concluded that building the manual on application of internal control and CoC for the business is practical and useful. The manual and training materials not only make clear the roles and benefits of internal control and CoC in corporate governance and responsible participation of stakeholders in deploying internal control and CoC, but also to specifically instruct tools and administrative forms for more successful application. To successfully carry out internal control and CoC in business, the commitment and high determination of the leadership and active involvement of executives, specialist employees and all other employees are the key element.

The manual consists of two chapters, with Chapter 2 comprising three parts, each of which delves into key issues of internal control and CoC in the business. All issues are analyzed in detail on the basis of Vietnamese law and good global practices, including general principles for corporate governance; international practices on internal control and CoC, methods of internal control and CoC development and application, and internal control and CoC forms/applications.

The manual will be delivered to Vietnamese businesses and adapted for SMEs. In addition, to have comprehensive assessments on internal control and CoC practices, businesses should read the practical report “Application of internal control and CoC in Vietnamese business: Facts and recommendations”. Illustrations and forms will make the Manual clearer and more helpful.

Quynh Chi