Rebuilding Foundation of Sustainable Corporate Governance

9:27:51 AM | 12/7/2021

Businesses need to integrate the sustainable development model into their management platform to create "antibodies" and flexibly adapt to any unpredictable external fluctuations.

Mr. Nguyen Quang Vinh, General Secretary of the Vietnam Chamber of Commerce and Industry (VCCI), Executive Vice President of the Vietnam Business Council for Sustainable Development (VBCSD), said, after experiencing four pandemic outbreaks, many businesses are perhaps losing the balance of three core pillars: financial capital, social capital and environmental capital. Cash shortage and staffing crisis are currently core problems of businesses. Besides, weak risk management and crisis management are also hard-nut-to-crack matters for them.

“Besides governmental supports, to live together and overcome the pandemic, each business needs to promote its own internal resources, change plans and strategies to ensure their own dual goal of effectively preventing the pandemic and protecting the health and safety of its employees and customers and maintaining and restoring production and business. They need to give priority to solving problems from both business perspective and sustainable development perspective,” he said.

Businesses that have adopted sustainable development strategies in general and applied the Corporate Sustainability Index (CSI) in particular have shown much better resilience than the average, Mr. Vinh added. With higher resilience, their chance of recovery is also higher as a result. In other words, applying sustainable development models has created "antibodies" for them to overcome the pandemic.

Ms. Nguyen Hai Hung, Chief Operating Officer of Deloitte Vietnam, said: "If the business system is regarded as a healthy body, it needs an immune system. Crisis management and risk management are vaccines that effectively protect it from the pandemic.”

The COVID-19 pandemic is, more or less, a "boost" for businesses to change their mindset about crisis, thereby making better, even more focuses preparation and investment to establish the risk management framework and the continuous action plan, she said. When a crisis occurs, they can immediately release defense and troubleshooting mechanisms to enable more sustainable recovery and development. Until the pandemic is controlled and the economy recovers, based on their competitive advantages built from human resources and employees' trust, they will have a solid foundation to soon revive and thrive.

Ms. Doan Thi Mai Huong, General Director of Tan Son Nhat Airport Services Joint Stock Company (SASCO), which suffered serious losses due to the pandemic, acknowledged that the company has learned a lot of valuable experience from the pandemic: Employee health is placed on top of all rather than revenue. As employees are protected, the company is resultantly protected. If the company can maintain its personnel and corporate culture, its business recovery and development after the pandemic is certain, she explained.

Mr. Binu Jacob - Managing Director, Nestlé Vietnam Co. Ltd and Co-Chair of VBCSD, shared practical experience in sustainable governance that helped overcome challenges posed by the COVID-19 pandemic. He proposed five priorities: Ensuring the safety and welfare of employees; optimizing supply; optimizing distribution channel; flexibly approaching consumers and supporting the Government and the community.

“A business needs to establish an appropriate structure to preserve clarity and stability amid market instability and chaos. People are the most important and other factors are secondary. We need to ensure smooth information, quick action and more than ever sharing, not profiteering, in crisis. We regard sustainability as the heart of all business activities and investment for responsible growth, not an extra cost, and leadership commitment as a key factor," he emphasized.

Ms. Cao Thi Ngoc Dung, Chairwoman of the Board of Directors of PNJ, said, even in the context of complicated pandemics, we always care about our employees and do not reduce their wages but keep some rewards for them. While business operations were interrupted, PNJ encouraged its employees to work as volunteers and opened free supermarkets. PNJ also developed employee training programs to upgrade their working and cooperation skills in the company. This is the social capital that we accumulate, she said, adding that when the pandemic is over, we will have more resilience.


Overcoming challenges, companies with a strong, persistent commitment to pursuing a sustainable development strategy for years have created their own "antibodies" to the pandemic, continued their stable operations and business growth, and effectively supported the Government, other authorities and the community to realize the dual goals.

At VsetGroup, social responsibility has been an important part of the business development process, especially in the 2020-2025 period. Instead of investing heavily in all member companies, VsetGroup will focus more on socially important areas to become more resilient to changes and impacts from the pandemic. When VsetGroup's projects are launched, sustainability factors are always taken into account. The group always sides with its partners and suppliers to create sustainable supply chains.

VsetGroup Sustainable Development Council, membered by experienced economic experts and strategic consultants, is a solid foundation and compass for VsetGroup to build business and development strategies suitable to opportunities and challenges of the market economy in the current technology era.

From another perspective, Mr. Phan Duc Hieu, Member of the National Assembly, said that corporate restructuring amid the pandemic is essential to absorb government-backed policies such as the economic recovery stimulus package, the economic recovery package and the green credit package. Businesses must change their production and business models and methods to gradually balance benefits and costs. Even new entrants to the market necessarily have and start action plans immediately. On the other hand, sustainable development is an “extra benefit” for them. By nature, sustainable development is a way of economy, an effective way of using resources and increasing resilience to climate change. Therefore, they need to create sustainable and green consumption habits in consistence with policies of countries that tax environmentally risked products and promote green production, he said.

Ms. Nguyen Thi Ngoc Hue, Director of Communications and External Affairs, AEON, said, sustainable development not only serves as a guideline in a stable context but also plays an important role in leading the company to adapt and recover in crisis. To recover from the pandemic, AEON has accelerated digital transformation: digital signatures, digital business management systems, order management to suppliers, customer management systems on clouding platforms to optimize customer experiences, she added. For operating methods, Aeon has adopted multi-channel procurement methods, online payment, and automated payment management to meet consumer needs.

Regarding solutions to couple the sustainable development model into the governance platform, Mr. Do Thai Vuong, Vice President of Sustainable Business and Communications at Unilever Vietnam, highly appreciated the cooperation between VBCSD-VCCI and the business community in recent years to jointly solve barriers caused by the pandemic, facilitate operations of enterprises, and boost economic development.

Representatives of many businesses also positively viewed the role of the CSI in supporting sustainable corporate governance in general and social capital management in particular and considered it an effective tool for them to actively overcome difficulties during the pandemic period, quickly recover and restore growth.

By Vietnam Business Forum