Phan Thi Tuong Tam, executive vice-president of the Ho Chi Minh Stock Exchange (Hose), says getting listed companies in Vietnam to comply with international corporate governance standards is a top priority. She admits, however, that it hasnÆt been easy to get the companies to comply in the absence of fines or penalties that could serve as deterrents.

ôMany of the listed companies donÆt give importance to corporate governance. Many donÆt even understand the concept and why it is for their own good,ö says Tam. This is despite the fact that companies are required to have one compliance officer and one so-called information provider who serves as a liaison between the company and the Hose.

ôWe feel that in order to promote corporate governance, we need to enhance regulation and enforcement. We will try to speed up the application of our corporate governance guidelines. We will be more stringent with compliance,ö she adds.

The Hose is in the process of considering imposing fines on companies that fail to comply with its corporate governance guidelines, Tam says. She adds the Hose ôis not far from decidingö on whether to impose those fines.

She acknowledges, however, that any fine the Hose may impose related to corporate governance issues will likely be minimal. She notes that listed companies that have ôbroken basic rulesö have been fined ôvery little.ö

She cites examples, without identifying the companies. One listed company that was found guilty of insider trading and violating a related parties rule was fined VND50 million ($3,147). Another one that failed to comply with disclosure requirements was fined VND20 million ($1,259).

The Hose was established in July 2000, and the Law on Securities in Vietnam was enforced only in January this year.

There are 120 companies listed on the Hose, while around 80 stocks are listed on the Hanoi Securities Trading Center. The combined market capitalisation of the Hose-listed stocks is around $20 billion or around 40% of VietnamÆs gross domestic product.

Of that total market capitalisation, the state still holds around 32%, foreign investors hold around 26%, while the rest are held by local investors, Tam says.

ôWe have organised seminars to help the listed companies understand the importance of corporate governance, especially transparency, to help them gain credibility among investors,ö Tam says.

ôIn order for them to abide by the corporate governance standards 100%, it will take time,ö she adds.

Tam says only 36 out of the 120 companies listed on the Hose have complied with its model charter or guidelines for listed companies.

Only 10 companies have complied with a requirement to communicate corporate governance issues with the Hose, out of the 83 companies that committed to do so, she says.

Only 73 companies have complied with a guideline that the chairman of the board must not be the chief executive officer of a company, she says.

She says compliance with guidelines for issuing financial results, audited reports, board remuneration and business plans is average at best.

Tam spoke with AsianInvestor in the sidelines of the Funds World Vietnam 2007 conference being held in Ho Chi Minh City this week, which have 160 fund managers, investors, and investment professionals in attendance.