HO CHI MINH NATIONAL ACADEMY OF POLITICS NGUYEN THI MINH PHUONG MECHANISM OF REPRESENTATIVE OF STATE CAPITAL OWNER IN ENTERPRISES IN VIETNAM SUMMARY OF DOCTORAL THESIS FIELD OF STUDY: POLITICAL ECONOMY Code: 62 31 01 02 HA NOI - 2018 The thesis was completed at Ho Chi Minh National Academy of Politics Supervisors: Assoc Prof., Dr Do Xuan Thuy Dr To Quang Thu Review 1: Review 2: Review 3: The thesis shall be defended in front of the Thesis Committee at Academy level at Ho Chi Minh National Academy of Politics At hour date month year 2018 The thesis can be found at: the National Library and the Library of Ho Chi Minh National Academy of Politics INTRODUCTION The necessity of the thesis The sixth Congress of the Communist Party of Vietnam (December 1986) proposed a policy of economic management reform: "to eliminate bureaucracy, subsidize and develop a new mechanism in line with the law objective and with the development level of the economy, "thereby posing a requirement for reform of state-owned enterprises (SOEs) Resolution No of the Ninth National Congress (2001) states that the state management agencies must step up the restructuring and raise the efficiency of SOEs, resolutely terminating the state administrative agencies directly and specifically intervene in production and trading activities of the business; To clearly define the economic management right of the State and the management of production and business of the enterprise; The resolutions of the 10th, 11th, XIIth Congress continue to affirm the right to "Strengthen the State management and management of owners (SOs) for SOEs Arrange the right leaders, improve the management capacity and business efficiency of enterprises Resolutions of the 5th plenum of the XIIth Central Committee: "To urgently set up a specialized State agency acting as representative of the State budget for SOEs to exercise the rights and responsibilities of the representatives of State Owned Enterprises." To concretize the Party's policy; The National Assembly has promulgated the Law on Enterprises, the Law on Management and Use of State Capital to invest in production and trading activities at enterprises; The Government issued decrees to strengthen the management, inspection and supervision of representatives of state capital in SOEs Currently, SOEs in Vietnam have managed a large amount of resources, accounting for a high proportion of the economy The development of SOEs is particularly important for the development of the entire economy Over the years, the State has tried, reformed and reorganized SOEs and achieved certain achievements However, the performance of SOEs is limited Many enterprises still fail to meet the requirements of international economic integration and not match the state investment; Business losses, unable to preserve capital, can not pay debts, many cases of party cadres who are key cadres assigned to stateowned representatives violated the party discipline, there are law violations, including cases being expelled from the Party or even received the death penalty The causes of low business performance of SOEs have been pointed out, but one of the most important reasons is that the mechanism of representation of state capital in enterprises has many shortcomings, showned in the identification of the entity and authority; inspecting and supervising the representatives of state capital in enterprises Therefore, the issue of "Representative mechanism of state capital in enterprises in Vietnam" was selected as the topic of doctoral thesis in political economy Research purposes and research tasks 2.1 Research purposes Clarifying the basic theoretical issues on the mechanism of representation of state capital in enterprises; Based on that analysis and assessment of the status of representation mechanism of state capital in enterprises in Vietnam in the past time; Proposing views and solutions to improve the mechanism of representing state capital in enterprises in Vietnam in the coming time 2.2 Research tasks Firstly, analyzing and systematizing to clarify the theoretical basis for the representation mechanism of state capital in the context of a socialist-oriented market economy Secondly, to study the experience of state capital representation mechanisms in enterprises in some countries and to draw lessons for perfecting the mechanism for representation of state capital in enterprises in Vietnam Thirdly, performing analysis and assessment of the state of representation mechanism of state capital in enterprises in Vietnam over the past time draws advantages, limitations and causes of limitations Fourthly, proposing specific viewpoints and solutions to improve the mechanism of representing state capital in enterprises in Vietnam in the coming time Research subjects and scope of research 3.1 Research subjects The research subject of the thesis is the representation mechanism of state capital owner as a whole of factors including the economic and legal relations between the State and the collectives and individuals who are empowered by the State State-owned capital in SOEs 3.2 Research scope The title is associated with "state capital in enterprises in Vietnam", in which the term "enterprise" is understood as SOEs as state owned enterprises The scope of theoretical research is that state-owned enterprises, however, have a very broad range of state-owned enterprises Therefore, the thesis only focuses on illustrating the current status of the representation mechanism of the state capital owner in some enterprises that have 100% state capital - Regarding space: Focus on the mechanism of representation of state capital in SOEs in Vietnam - In terms of time: 2010-2016 period; referring to and consulting the documents before 2010 and after 2016 for the comparison and evaluation Research Methodology 4.1 Methodology The thesis uses the methodology of dialectical materialism and the historical materialism of Marxism-Leninism 4.2 Specific research methods This includes: scientific abstract method; Logical method combined with history; Methods of analysis, synthesis, inductive, interpretive, statistical, comparative In addition, the dissertation uses the method of summing up the practice to study and evaluate the mechanism of representation of state capital in enterprises in Vietnam 4.3 Source of research information Including scientific information in research works related to representatives of state-owned capital in enterprises of domestic and foreign authors; information and statistics from reports from research institutions, relevant agencies of the Party Central Committee, state management agencies, state owned representative agencies in state-owned enterprises mainly in the period 2010-2016 New scientific contributions of the thesis - Contributing to further clarify the concept and content of the mechanism for representation of state capital in enterprises in Vietnam; Analyze and clarify the factors that influence the representation mechanism of state capital in enterprises - Assess the status of state capital representation mechanism in enterprises in Vietnam from 2010 to 2016 - Proposing key ideas and solutions to improve the mechanism of representing state capital in enterprises in Vietnam in the coming time to 2030 in order to contribute to ensuring the operating conditions of SOEs The State's capital in enterprises is appropriately owned, managed and used, preserved and not lost, embezzled, corrupted or wasted Structure of the thesis In addition to the introduction, conclusion and list of works published by the author relating to the dissertation, list of references and annexes, the contents of the dissertation are divided into chapters and 14 sections Chapter OVERVIEW OF RESEARCH SITUATION RELATED TO THE MECHANISM OF REPRESENTATIVES OF STATE CAPITAL OWNERS IN ENTERPRISES 1.1 FOREIGN RESEARCH PROJECTS CONCERNING THE MECHANISM FOR REPRESENTATIVES OF STATE OWNED CAPITAL IN ENTERPRISES 1.1.1 State ownership and ownership of state capital in enterprises Kar-Marx, Capitalism Critique of Political Economy, 3rd Book: The Whole Process of Capital Production; Professor Coc Thu Duong: The New Theory of Socialist Economics; Prof Trau Dong Dao (Editor): China's Economic Development and Reform (China Development Reform) Report - 30 Years of China's Open Reform (1978-2008); Professor Dong Duc Cuong: The transformation of ideological views since the reform was opened up to now 1.1.2 The appointment, inspection and supervision of representatives of state capital owners in State enterprises and reform of State-owned enterprises OECD (2005): OECD Guidelines on Corporate Governance of StateOwned Enterprises (OECD Guidelines); Department of Finance and Deregulation, Australian Government (December 2011): Commonwealth Government Business Enterprise Governance and Oversight Guidelines; UNICO (UK) Limited (2013): Report No 2- Comparative World Experience Report on State Capital Management for the Asian Development Bank and the Ministry of Finance under Project ADB TA-8016 VIE: Strengthening support to the SOE Reform and Corporate Governance Program (39538-034); Prof Trau Dong Dao and Dr Au Duong Nhat Huy: 30 Years of Reforming the State of Private Ownership and Economic Development in China; UNDP in partnership with the Ministry of Foreign Affairs of Vietnam and the Vietnam Academy of Social Sciences (2014): International Conference on Economic Reform for Comprehensive and Sustainable Growth, International Experience and Lessons for Viet Nam year 2014; Prof Gary H Jefferson, Brandeis University: SOE Reform - Lessons for Vietnam; Professor Zhang Jun, Fudan University, China: China's SOE Reform - Policy, Process and Assessment; By Laksamana Sukardi, Former Minister of Indonesian SOE Investment and Development: Indonesia SOE Reform Experience 1.2 DOMESTIC RESEARCH WORKS CONCERNING THE MECHANISM FOR REPRESENTATIVES OF STATE OWNED CAPITAL IN ENTERPRISES 1.2.1 Study on representation of owners of state capital in enterprises and models of ownership representation of state capital in enterprises National Science Project KX04.09 / 06-10, period 2006-2010: Ownership in the socialist-oriented market economy of Vietnam chaired by Prof Dr Nguyen Ke Tuan The state-invested enterprise book- adjusting law and ownership model according to international experience, led by Dr Dr Tran Tien Cuong, Central Institute for Economic Management (Editor), published in 2005 The book (reference) Renovation of the representative model of representatives of State-owned enterprises for SOEs: National Theories and Experiences applied and applied in Vietnam by authors Nguyen Dinh Cung and Bui Van Dung, Central Institute for Economic Management (co-editors), published in 2013; PhD thesis in Economics, Academy of Finance: State capital management mechanism for investment in enterprises in Vietnam by Pham Thi Thanh Hoa (2012); PhD thesis in Economics, Ho Chi Minh National Political Academy: State capital management in SOEs in Da Nang City by Nguyen Thi Kim Doan (2016); PhD thesis in economics, Ho Chi Minh National Political Academy: The mechanism of management of public property in the administrative and professional sector in Vietnam by Nguyen Manh Hung (2014); The draft law on management and use of state capital invested in production and business of the Government shall be submitted to the XIIIth National Assembly, at its seventh, eighth session (2015); Dr Nguyen Ngoc Thanh (2010), Issues of owner and Representatives - Some policy implications for Vietnam; Assoc Prof., Dr Tran Viet Lam (2013) Representation theory, game theory and problem Representation of state capital in enterprises 1.2.2 Study on the mechanism for inspecting and supervising representatives of state capital owners in state enterprises The book explores the abnormal relationship between a section of cadres, party members in office, the right to profit from businesses (Reference Book) and the book Some solutions to limit the relationship It is normal for a part of cadres and party members to have rights with profiteers in Vietnam by Dr Le Hong Liem (Editor), National Politics Publishing House 2014; The book on Current Trends and Solutions for Prevention of "Group Benefits" in Vietnam (Reference Paper), National Political Publishing House 2015; Ministry of Finance, Ministry of Finance: State financial supervision of SOEs and state owned enterprises in Vietnam: Current status and solutions of Assoc Prof Dr Bui Van Van and MSc Dang Quyet Tien (co-head of the project); Proceedings of the Scientific Conference on Financial Monitoring for SOEs and SOEs in Vietnam - Current status and solutions by the Finance Academy in 2015 1.2.3 Research on state-owned enterprises and reform, reform of SOEs The SOE book in the socialist-oriented market economy, the Scientific Council of the Central Party Agencies and the Hanoi Business Association, National Political Publishing House published in 2013; Success and costly lessons of SOEs, by Assoc Prof., Dr Le Quoc Ly, Editor of National Political Publishing House 2014; SOE Book and Distorting Market of the Vietnam Competitiveness-Enhancing Economic Competitiveness (RCV), published in 2015; 2007, Central Institute for Economic Management, Ministry of Planning and Investment: Continuing to renovate and implement the function of Stateowned capital investment in enterprises of the Ministry of Planning and Investment Pham Duc Trung; Ministry of Finance: A solution to improve the efficiency of state capital management at current economic groups of Vietnam Do Thi Thuc and Dr Nguyen Thi Thu Huong (co-host); Ministry of Finance: Solutions to improve the efficiency of state capital investment management in post-equitization enterprises (SOEs) Hoang Duc Long, PhD Do Thi Thuc (cohost); Corporate Finance Department, Ministry of Finance: Assessing the real state of the SOE system of author Tran Huu Tien (project leader); Proceedings of the International Conference on Economic Reform for inclusive and sustainable growth, international experience and lessons for Vietnam, in 2014 by UNDP in cooperation with the Ministry of Foreign Affairs and the Vietnam Academy of Social Sciences held in Hanoi; Workshop on SOE Renovation and Private Economic Development organized by Center for Economic Information (Central Economic Department) in collaboration with Research Institute for Brand Strategy and Competition held on 30-5-2017 in Ha Cabinet 1.3 COMMENT OF THE RESULTS OF THE RELATED PUBLISHED WORKS AND IDENTIFYING PROBLEMS NEED RESEARCHING OF THE THESIS 1.3.1 Theoretical and practical results that have been achieved The above-mentioned domestic and foreign researches on theoretical and substantive explanations on the ownership and ownership of SOEs; SOE Reform Some of the theoretical and practical issues of SOEs in the market economy have been clarified, the need for state ownership of state capital in enterprises through representation of state capital in enterprises in some countries in the world as well as in Vietnam At the same time, many published scientific papers have focused on the state of SOEs' performance in the market economy, drawing on the achievements and limitations and pointing out some shortcomings in the mechanism of representation Ownership of state capital in the enterprise as the cause of reducing the efficiency of enterprises with state capital The thesis will inherit and use these contents to analyze and evaluate the mechanism of representing state capital in enterprises in Vietnam 1.3.2 The gap needs to be supplemented and further refined in the representation mechanism of state capital ownership in enterprises in Vietnam So far, there has not been much research on the mechanism of representation of state capital in enterprises Moreover, there is a great difference in approach and solutions proposed in this regard From a political economy point of view, there have been no researches that adequately and comprehensively discuss the mechanism of representation of state capital in enterprises in Vietnam The main issues of theoretical and practical issues include: - The objective necessity of state ownership through the mechanism of state capital representation in enterprises in the socialist-oriented market economy; rationale, nature, characteristics, roles and contents of state capital representation mechanisms in enterprises and influencing factors - State of representation mechanism of state capital in enterprises in Vietnam in the process of formation and development of socialist-oriented market economy, inadequacies and causes - Solutions to improve and improve the efficiency of the state capital representation mechanism in enterprises in Vietnam in the coming time Chapter THEORETICAL BASIS AND PRACTICE OF THE MECHANISM OF REPRESENTATIVE OF STATE CAPITAL OWNER IN STATE-OWNED ENTERPRISE 2.1 CONCEPTS OF THE MECHANISM OF REPRESENTATIVES OF THE STATE CAPITAL OWNER IN STATE OWNED ENTERPRISES IN THE MARKET ECONOMY 2.1.1 State ownership in a market economy In a market economy, state ownership and the ownership of the entire population can have a certain relationship, the state as the subject representing the whole society can manage and use the subject matter owned by the people This thesis will use the concept of state ownership as a particular form of ownership in a market economy in which the owner is the State, the subject property being the property owned by the state and assets and resources under the entire people's ownership that the State is the subject of management and use 2.1.2 Representatives of owners of state capital in enterprises Representatives of State-owned capital in enterprises are organizations and individuals assigned by the State to exercise the powers and responsibilities of state-owned enterprises at state-owned enterprises The State exercises the rights of state-owned enterprises through the representation mechanism 2.1.3 The concept of representative mechanism of state owned capital in enterprises The representation mechanism of state capital owner in enterprises is the indirect mode of state ownership of capital sources invested by the state through the overall economic and legal relations between the state as the owner and the representatives of state capital owner of state-owned enterprises in order to efficiently implement the state ownership and properly and fully exercise the powers and responsibilities of organizations and individuals that are representatives of state capital owner in SÓEs, ensuring that SOEs operate effectively, contributing to the state's economic role in the market economy The mechanism of representation of state capital owner in enterprises has the following role: Firstly, orientation, guidance, behavioral guidelines, and frameworks for the implementation of state capital owner representative Secondly, being the basis, the standard for the representative of State capital owner to implement Thirdly, to reduce uncertainty by providing the necessary information and establishing a stable mechanism for the interrelation between agencies and units in the state management apparatus 2.2 CONTENTS OF THE REPRESENTATIVES OF REPRESENTATIVES OF STATE OWNED CAPITAL IN ENTERPRISES The contents of the state capital representation mechanism in enterprises include: - Methods of determining the authority of state capital owner and representatives of the owner in organic relations - The mechanism for appointing, dismissing and remunerating representatives of state capital owner in enterprises - Mechanism for checking, supervising and evaluating representatives of state capital owner in enterprises 11 Scattering model: The sector manager implements CSH rights for SOEs owned by the central government (similar to local SOEs) Centralized model: SOEs are concentrated on a specialized organization that performs the functions of State Owned Enterprises (SOEs) for SOEs The "bi" (centralized and scattered) model: Most SOEs are focused on a specialized agency to manage, monitor, restructure, develop and improve efficiency, dispersion To manage, supervise and perform the function of representing owners in branches, domains and localities 2.5.1.3 Supervision of owner representatives In general, countries implement two main modes: direct monitoring through representatives of CSOs in enterprises and indirect monitoring through reporting systems 2.5.2 Lessons for Vietnam on developing, implementing, and improving the representation mechanism for state capital owner in enterprises First of all, it is necessary to clearly define and institutionalize the separation between the ownership and the right to trade state capital, the state management function with the task of exercising the right of CSH to SOEs Secondly, innovation and application of modern governance frameworks to SOEs must be reformed Thirdly, select the appropriate model of organization of state capital representation agencies in enterprises Fourth, focus on staff work, especially the selection mechanism, appointment of representatives of CSH and leaders of SOEs on a large scale Fifthly, strengthen the examination and supervision of state-owned enterprises in SOEs Chapter ACTUAL SITUATION OF THE MECHANISM OF REPRESENTATIVE FOR STATE CAPITAL OWNER IN STATEOWNED ENTERPRISES IN VIETNAM 3.1 ACTIVITIES AND MODELS OF THE ORGANIZATION AND APPARATUS OF STATE-OWNED ENTERPRISES 3.1.1 The formation, development and operation of state-owned enterprises Vietnam's state-owned enterprises were formed during the period of central planning, which was constantly renewed and developed in the process of 12 formation and development of a socialist-oriented market economy since 1986 In the past time, SOEs have basically performed the role and tasks assigned by CSOs, contributing to promoting socio-economic development It is an important material force for the State to regulate the economy, stabilize the macroeconomy, ensure a great balance of the economy In the late 1980s, the number of SOEs was over 12,000, of which localmanaged enterprises accounted for 75% During the period 1991-1994, more than 250 corporations, unions of enterprises and independent SOEs were reorganized; 17 corporations were established under Decision 91 / TTg dated March 1994 and 76 corporations were established and managed under the authority of the Prime Minister to Ministries and Provincial People's Committees Decision No 90 / TTg dated March 7, 1994 As of the beginning of 2000, the number of SOEs decreased to about 6,000 SOEs However, the average annual growth rate of state owned enterprises was 11, 7%, 1.5 times the average growth rate of the whole economy and nearly double the non-state economy (the average GDP growth rate of the whole economy in the period 1977-1980 was 0.4% in the period 1981-1985, 3.9% in the period 1986-1990 and 8.2% in the period 1991-1995 As a result, SOEs have grown steadily, making up 40.2% of GDP, over 50% of exports, contributing 39.25% of total state budget remittances Over the past 15 years (2001-2016), the number of SOEs has decreased sharply As of October 2016, there were 718 SOEs, but the real GDP at current prices was always higher Last year, even in the period when Vietnam was affected by financial crisis and economic recession The share of the state-owned economy in GDP tends to decrease but remains above 30% annually, of which the share of SOEs is about 27-28% The SOEs have shown remarkable development as mentioned above, but the activities of SOEs are still limited They are: - The performance of SOEs is not commensurate with the scale of capital and resources held; Competitive power is low - The scale of state ownership is large, but in many SOEs exist bad debts, overdue debt hundreds of billion, even up to trillions - A number of SOEs are still weak, causing loss of capital, assets, bad debts, continuous losses 3.1.2 Overview of the organization and structure of state-owned enterprises For one-member limited liability companies: Where the company authorizes two or more persons to act as representatives, the managerial structure 13 of the company shall be composed of the members council (chairman of the council); The Director or the General Director and the Controller Of which: Council members include all authorized representatives Board members on behalf of CSH company perform rights and obligations of CSH Chairman of the Board is appointed by the company The Board of Management operates under the Charter of the company In the case of a company authorized by an authorized representative, the managerial structure of the company shall include: Chairman of the company; The director or general director; Surveyor As such, the authorized representative will hold the position of Chairman of the company Chairman of the company on behalf of CSH performs the rights and obligations of the company CSH Such rights and obligations shall comply with the company charter and related laws For a limited liability company with two or more members, the management organization model includes: Council of Members (Chairman of the company); The Director or the General Director and the Control Board In particular, the Council is composed of all members, the highest decision-making body in the company The Board of Directors operates on an infrequent basis, performs functions through meetings and makes decisions on important issues of the company, based on votes of the members at the meeting The Chairman of the Board, elected by the Board, may also be the Director or General Director The Chairman of the Board of Management shall exercise the rights and obligations under the Law on Enterprises and the Charter of the Company For joint-stock companies, the regulations on the organizational structure for management of joint-stock companies shall be as follows: "1 Shareholding companies have the right to select management organizations and operate under one of the following two models, unless otherwise provided for by the law on securities: a) General Assembly of Shareholders, Board of Directors, Inspection Committee and the director or general director b) General Assembly of Shareholders, Board of Directors and Director or General Director Party organization in the SOE sector Party organizations in SOEs include party committees, party committees, and subordinate committees Party organizations in economic groups and corporations are affiliated to the Party Central Committee; Under the provincial Party Committee, the Party Committee or the Party Committee of the business unit of the provincial Party Committee, the Party Committee is organized according to two models: the Party Committee of the entire economic group, the corporation and the Party Committee of the parent company of the economic group, the total company For economic groups and state corporations which are 14 not yet operating under the parent company-subsidiary model, the Party organization of the economic group and corporation After the parent companysubsidiary model, reorganize following the parent company model In general, the Party cells and subordinate units in SOEs are the political nucleus, leaders of enterprises implement the Party's policies and guidelines, policies and laws of the State; To effectively carry out political tasks; Improving the material and spiritual life of laborers, fulfilling their obligations towards the State; To build up a clean and strong party branch and branch, contributing to promoting the leading role of the state economy in the socialist-oriented market economy and building a strong working class 3.2 ACTUAL SITUATION OF THE MECHANISM OF REPRESENTATIVE OF THE STATE CAPITAL OWNER IN VIETNAMESE ENTERPRISES 3.2.1 Status of mechanisms for determining ownership of owners and representatives of owners of state capital in enterprises in Vietnam The formation of specific views on the mechanism for defining the competence of CSH and representatives of state capital in enterprises in Vietnam in the renovation period is carried out on the basis of the Party's guidelines and policies and laws of the State The Party's policy adopts the resolution of congresses, resolutions and conclusions of the Party Central Committee Since the ninth congress of the Party (2001), the Central Government has repeatedly issued many resolutions and conclusions on SOEs, emphasizing the need to reform and change the way of exercising state ownership in business In particular, in the Congresses (X, XI, XII), this issue is mentioned in the convention documents The XIIth Congress (January, 2016) affirmed the need to further improve the institutional structure of ownership, which defined: Separation of functions of assets, capital of the State and functions of state management, management functions business of SOEs; Early termination of the function of representatives of state ministries of state ministries and People's Committees on capital and state property at enterprises The Central Committee, the Ministry of Political Affairs, the Secretariat issued resolutions, directives, conclusions and notices on this issue State policies and laws on the representation of State capital in enterprises in Vietnam: Law on State Enterprises in 1995 and Law on State Enterprises in 2003 (replacing the Law on State Enterprises in 1995) Then, the Law on Enterprises in 2005 marked a big change in the law on enterprises in Vietnam is to form a common legal framework, uniformly applied to all types of enterprises The government issued decrees Until now, the rights and responsibilities of 15 State Owned Enterprises (SOEs) have been fundamentally determined, with the main responsible agency The Board of Directors or the Chairman of the company is also responsible for managing and operating the enterprise in compliance with the law and the decisions of the CSH, the management of the use, preservation and development of capital effectively, reports CSH The loss of business operations, insecure solvency, failing to fulfill the objectives and tasks assigned by the SEC or wrongful acts At the same time, new regulations on the rights and responsibilities of State Owned Enterprises (SOEs) for SOEs, on SOEs' performance appraisal, are also promulgated and improved, as reflected in the Enterprise Law of the year 2014 and the Law on Management and Use of State Capital for Investment in Production and Business in Enterprises; Decree No 99/2012 / ND-CP dated November 15, 2012 of the Government on assignment and decentralization of the implementation of rights, responsibilities and obligations of State Owned Enterprises (SOEs) and state capital invested in Enterprises, regulating and decentralizing the contents of state management with state management of SOEs 3.2.2 Current status of the mechanism for the appointment, commendation and discipline of representatives of state capital owners in enterprises in Vietnam According to the Party's regulations on the decentralization of personnel management (attached to Decision No 67-QD / TW dated 04/7/2007 of the Politburo), the title of Chairman of the Board of Directors / Chairman of the Board of Management is especially important for the state to participate in the appraisal of the personnel of the Central Party committees The Government's Board of Directors decides the positions of Chairman of the Board of Directors of groups and corporations of special importance (according to the Government's ranking) On 19/12/2017, the Politburo issued the Regulation No 105-QD / TW on decentralization of personnel management and the nomination and introduction of candidates (replacing Decision No 67-QD / TW), including basic and comprehensive contents in all aspects, steps by steps in cadre work The Ministry of Home Affairs issued Circular No 01/2008 / TT-BNV dated January 15, 2008 guiding the order and procedures for the appointment, reappointment, dismissal, commendation and disciplining of the Chairman, Board members, General Director, Director According to the 2008 Law on Cadres and Civil Servants, the Government shall specify the application of the Law on Cadres and Civil Servants to the Chairman, members of the Board of Directors, General Director, Deputy General Director, Director and Deputy Directors, Chief Accountant and other holders of leading and managerial positions in SOEs; 16 Those who are nominated by the State as representatives of CSH of the State capital at enterprises with capital contributed by the State Decree No 66/2011 / ND-CP dated 01/8/2011 of the Government regulating the application of the Law on Cadres and Civil Servants to the leadership and management of one member limited liability companies CSH and the person nominated to be a representative of CSH of the State capital at enterprises with contributed capital of the State Decree No 97/2015 / ND-CP of October 19, 2015 of the Government stipulating the management of holders of posts and posts at enterprises is a one-member limited liability company with 100% regulations At the same time, the Government issued decrees on the management of labor and wages for laborers in line with the roadmap for arranging and converting state companies On October 23, 2015, the Government issued Decree No 106/2015 / ND-CP on the management of representatives of state capital holding managerial positions at enterprises with over 50% , replacing Decree No 66/2011 / ND-CP dated 01/08/2011 The new Decree No 106/2015 / ND-CP has narrowed the scope of adjustment and only adjusted for the Representative to manage the State share of capital in enterprises with more than 50% the ratio; To supplement the provisions on: concurrently working for the representative of the State capital portion; Specify the criteria for each level of annual assessment for the representative and amend the evaluation order and procedures; Agent's conditions; procedure for appointing Representative; the Representative; Disciplinary action against the Representative and change of dismissal rules 3.2.3 Current state of mechanism for inspecting and supervising representatives of state capital owners in enterprises in Vietnam Basing themselves on the Party's resolutions and charters, the Party Committees at all levels have directed the inspection and supervision of the results of production and trading as well as the management of the State capital in the State groups and corporations in order to discover negative, negative; The loss of a large number of state assets, some key officials were expelled from the Party, prosecuted, public opinion jar On the basis of the guiding principles of the Party, the Government and the Prime Minister issued a number of decrees and decisions, the concerned ministries and branches issued circulars guiding the implementation of the mechanism of supervision and evaluation of efficiency for SOEs; Supervise and supervise representatives of state capital in SOEs The regulatory framework for SOE monitoring and evaluation has been established since the adoption of the SOE Law in 2003 and is continuing to be completed and supplemented Prior to 2015, these documents were divided into 17 two groups: (1) A set of documents regulating mechanisms for monitoring and evaluating the operation of SOEs, regulations on methods, methods, tools, To conduct monitoring and evaluation of SOEs' activities; (2) Group of legal normative documents on monitoring and evaluation of SOEs 'operations or related monitoring and evaluation of SOEs' operations Regarding the inspection and supervision of the Party: the term of the 11th Party Congress (2011-2016), the inspection committee at all levels checked 55,250 party members when there were signs of violation, through inspection found 42,757 members Violate, discipline 20,344 members of the party; supervising 213,320 Party members on the contents of observance of policies and laws of the State 110,214 cases; The performance of assigned duties and responsibilities 77,775 cases in which the content inspection and supervision of the performance of duties assigned to representatives of state capital in the enterprise In 2013, the Inspection Committee of the Ho Chi Minh City Party Committee reviewed and concluded that many key leaders were Party secretaries, chairmen of the Board of Directors, directors of four public service enterprises Ho Chi Minh City has violated, causing very serious consequences such as signing contracts in contravention of the provisions of the Labor Code to infringe upon the interests of the laborers; Wage division for high business leaders, unequal Has been disciplined or recommended to the party discipline authority in the form of warning or expulsion for many key leaders mentioned above Through the inspection work of the Central Commission of Inspection in 2014, discovered the former Director of Vietnam Maritime Bureau, former Secretary of the Party Committee, Chairman of the Board of Vietnam Maritime Corporation (Vinalines), former Commissioner Standing Party of the central business party has the role of mastermind, leading in the 83M floating market, causing damage to the State more than 366 billion, embezzlement more than 28 billion, has proposed the competent authority to expel out of the Party As a result, the Ministry of Transport, as the managing ministry, failed to fulfill its responsibility to inspect and supervise the management and use of capital and assess the business results of Vinalines Serious results In 2016, through the inspection discovered former Party Secretary, Chairman of Petrovietnam Construction Joint Stock Corporation (PVC) under the Vietnam National Oil and Gas Group has been with the Standing Committee of the Party Committee, the Board of Directors, The Board of General Directors, the Board of Supervisors of the Corporation have been irresponsible, let loose the leadership, management, lack of supervision and supervision, contrary to the provisions of the law on economic management many violations and losses of VND3,298.27 billion 18 (2011-2013), has asked the competent authorities to clear out the Party and prosecute investigation clarified The State inspection, supervision, inspection and audit of state capital representatives in enterprises: The inspection, supervision, inspection and auditing work for SOEs in the observance of law Laws and compliance with decisions of CSH are emphasized According to the Government's AntiCorruption Report 2014, state administrative agencies have deployed 7,596 administrative inspections and 193,508 specialized inspections Through inspections discovered violations of 31.885 billion, recommending the recovery of state budget 27.109 billion, transferred to the criminal investigation agency 61 cases The State Audit has issued 163 audit reports, proposals for financial handling 13,626.4 billion, transferred the investigation agency cases Since 2005, there have been 13-14 inspections, audits, inspections in Vinashin Through these, also discovered a lot of mistakes, while detecting the mechanism of supervision, inspection is in trouble 3.3 ASSESSMENT OF ACTUAL SITUATION OF THE MECHANISM OF REPRESENTATIVE OF STATE CAPITAL OWNER IN VIETNAMESE ENTERPRISES 3.3.1 Advantages Renovation of the mechanism of management, assignment and decentralization in the implementation of rights and obligations of State Owned Enterprises has contributed to renewing the mechanism of governance and transparency of information on SOEs in accordance with international standards and practices, from there: Firstly, it contributes to renovating, enhancing the efficiency and effectiveness of the state management and the owner agency for the state owned enterprises Secondly, promoting organization, equitisation, SOE restructuring Thirdly, contributing to renovating and improving the operation efficiency of state corporations; forming a number of strong economic groups; To perfect policies on assignment, sale and business contracting Fourthly, contributing to renovating the management of cadres, civil servants and employees at SOEs Fifthly, the guideline of the Party and the system of legal documents on representatives of CSH, inspection and supervision of representatives of state capital in enterprises and on supervision, inspection and inspection of investment management, using state capital at enterprises is relatively full, initially creating a legal corridor, ensuring the right of production and business enterprises, while 19 preserving and improving the efficiency of the use of capital and assets government 3.3.2 Limitations The institutionalization of resolutions of the Party on representation of housing capital in enterprises has limitations and inadequacies The new documents only regulate the rights and obligations of state-owned State-owned companies There are no regulations, procedures, clear appointment, reappointment, dismissal, commendation or discipline of the Chairman, members of the Board, General Director, Director, Controller None Separate regulations on reward and discipline of organizations and individuals are authorized to represent state capital There is no document on the party's resolution on the Party's inspection of party organizations and party members at state-owned enterprises and SOEs Many regulations on SOEs are unclear, overlapping or unrealistic so it is difficult to implement, but not amended or supplemented in time In the process of implementation of the equitisation policy, the disclosure of inadequacies Regarding regulations, the content of state management with state management of SOEs has been identified The main shortcomings and constraints are as follows: Firstly, there are too many clues to management, so it is in the situation of overlapping and not clearly defined responsibilities Secondly, it is not yet clear whether the CSH function is representative of state management functions Thirdly, there is still a dispersed, incompetent, professional and specialized situation in the exercise of the rights, responsibilities and obligations of State Owned Enterprises Fourthly, there is no mechanism for creating incentives and sanctions for all agencies and individuals who successfully fulfill their tasks of performing the function of representing State employees The process of selecting and arranging SOE managers is not suitable with the operation of enterprises according to the market mechanism and international practices The remuneration and treatment regime applicable to SOEs' managers is basically the same as for public servants Fifthly, the model of implementing the rights and responsibilities of representatives of state-owned enterprises and SOEs in enterprises has been renewed, but has not kept pace with the requirements set out in the management practice and supervision of enterprise The decentralization of cadres who represent SOEs at SOEs has many unreasonable points, which are more likely to occur negatively and locally A small part of SOEs' managers are weak in management capacity, lack of responsibility, deterioration in ethical qualities, 20 deliberate wrongdoing, violations of legal regulations, Taking advantage of assigned tasks to gain their own benefits and causing big losses, big losses for some SOEs, badly affecting the prestige of the Party and the State and belief in SOEs Inspection and supervision of the CSH is formal, there are places, sometimes let loose 3.3.3 Causes of limitations Objective causes due to the global and domestic economic situation, especially due to difficult situation of SOE sector from many years are not easy to handle, solved immediately in a short time The financial crisis, global economic crisis has greatly affected the SOE system in the context of the country has deepening integration and broad economic system in the world Maintaining the model of centrally planned planning is too long leading to backwardness and difficulties in economic thinking, management mechanism and SOEs The SOE model in every country has always contained difficulties and complexity in management Subjective causes are due to: - Awareness of position, role of national economy and SOEs, representatives of state capital owner in SOEs have sometimes been inadequate; Many issues are unclear, but opinions are different but not summed up Partial representation of some capital owner agencies and SOEs - State management over SOEs is still weak Mechanisms and policies on SOEs, representatives of state capital owner in SOEs are still inadequate, slow and incomprehensible, many of which are not compatible with the socialistoriented market economy - The organization of research and institutionalization of some policies of the Party and State is not timely - Some ministries and agencies have not really focused on the promulgation of mechanisms and policies on state capital representation in SOEs in line with the set plan - The capacity of management of some corporations and corporations is still weak It also causes the loss of capital, assets and losses, but there is no clear and specific mechanism for handling liabilities - Mechanism for monitoring and evaluating the operation of SOEs; The mechanism of inspection and supervision of organizations and individuals that have been assigned the right to represent the State budget has no warning or prevention effect 21 Chapter VIEWPOINTS AND SOLUTIONS TO PERFECT THE MECHANISM OF REPRESENTATIVE OF STATE CAPITAL OWNER OF STATEOWNED ENTERPRISES IN VIETNAM IN THE FUTURE 4.1 VIEWPOINTS ON IMPROVEMENT OF THE MECHANISM FOR REPRESENTATIVES OF STATE CAPITAL OWNER IN ENTERPRISES IN VIETNAM 4.1.1 Forecasting situation In the coming time, the globalization of the world economy will be stronger; bilateral, regional and multilateral economic links continue to expand; science and technology increasingly assert its role as one of the most important direct production forces of the world economy; The tendency for negotiation and conclusion of free trade agreements is broader than before, including nontraditional sectors (new FTAs) The Industrial Revolution 4.0 creates the motivation for businesses in general as well as SOEs to change their production methods, business and market thinking The domestic situation, over the past 30 years of innovation has created a lot of strength and power than before, the economy of the country has changed in terms of speed and growth of each industry, each However, Vietnam will still have to face with difficulties and challenges arising from the inherent weaknesses of the economy So far, many of the Party's policies on state capital representation in enterprises have not been fully institutionalized 4.1.2 Some viewpoints - State-owned enterprises are a part of the state economy - State-owned enterprises shall implement the strategic direction of the State and submit to the comprehensive inspection and supervision of the State capital owner - The organization and operation of SOEs must comply with the following principles: Obey the laws, the objective laws of the market economy; Under the management and regulation of the State - Separation of ownership and business rights, separation of state management functions with the task of exercising the right of CSH to SOEs Establishing a specialized agency to act as representative of state owned enterprises - Strengthening the leadership of the Party towards the reorganization, renovation, development and improvement of SOEs' effectiveness; Renewal and enhancement of the leadership role of party organizations in SOEs 22 4.1.3 Directions - To define and strengthen the state management functions and functions of implementing the CSH on the basis of perfecting the decentralization mechanism for exercising the rights and obligations of the State Treasury - Separating the implementation of ownership rights to the right of production and business of enterprises - Promoting equitization of SOEs - Renovation of governance and operation mechanism of SOEs moving towards organization and operation in the form of joint stock companies, limiting the operation in the form of limited liability companies - To publicize and clarify activities of SOEs, especially the SEs and the State Corporations in the fields of natural monopoly - Renovation of appointment and commendation; Strengthening examination and supervision Representative Transparency in the recruitment and appointment of representatives 4.2 MAJOR SOLUTIONS TO PERFECT THE MECHANISM OF REPRESENTATIVES OF STATE CAPITAL OWNER IN VIETNAMESE ENTERPRISES IN THE FUTURE 4.2.1 General solution group Firstly, strengthening the leadership of the Party in state-owned enterprises Renovate the model of party organization in the state-owned enterprises to suit the practical situation Secondly, establish a state-owned representative office in the enterprise To form a unified organization for the representation of owner in SOEs, to promote administrative reform in state management agencies; Creating breakthroughs in innovation, development and improvement of SOEs' efficiency Thirdly, exercising the rights and responsibilities of the State Representative The National Assembly promulgates laws on state capital representation in enterprises The Government issued decrees on the operation of SOEs and the management and use of state capital invested in enterprises 4.2.2 Group of solutions on organizational and human apparatus Firstly, strengthening SOE governance; Strategic training of business leaders, state managers in accordance with international standards; Renovate the remuneration mechanism for representatives of State-owned enterprises in enterprises Secondly, to perfect the mechanism of information systems, internal management Strengthening transparency and disclosure of information, equitized SOE companies must be listed on the stock market if they meet the conditions, contributing to increasing supply to the market and transparency of information Thirdly, the separation of SOE managers from civil servants and officials To publicize, transparently and broadly apply the mechanism of recruitment and appointment of representatives through competitive examinations 23 4.2.3 Group of solutions on supervision and inspection Firstly, there is a mechanism to clarify the responsibilities and obligations of organizations and individuals assigned to perform the rights and obligations of the owner To intensify the Party's inspection and supervision of the Party organizations and Party members at the State agencies for State and State enterprises; Strengthen management, supervision, inspection of owner Improve capital management efficiency and representative supervision Secondly, to perfect the management and control mechanism for SOEs on the basis of economic activity and socio-political tasks, including financial supervision and performance evaluation in State owned enterprises and enterprises with state capital Thirdly, promoting the role of supervision of mass organizations in enterprises To supplement the completion of important monitoring indicators in service of the prevention of risks, prevention of loss of capital and assets, ensuring the safety of the State capital and assets at enterprises The sanction system should be designed specifically, strong enough and clear for violations 4.2.4 Group of solutions on equitization, state enterprise restructuring Promoting equitization, divestment To consistently promote SOE equitization in the direction of reducing the state ownership ratio in enterprises; To implement publicly and transparently, especially in equitization roadmap, enterprise valuation audit, financial report Continuing to strengthen the restructuring of SOEs, with focus on corporations and state corporations To build an economic group with 100% capital or controlling shares in a number of important branches in order to implement the national development strategy as a key force in ensuring the major balances and macroeconomic stability To continue restructure state-owned economic groups and corporations in a comprehensive manner from the organizational model, management, human resources, production and business lines, development strategies and investment to the market and products, organizational structure and labor, innovation of corporate governance 4.3 SOME RECOMMENDATIONS TO THE CENTRAL - For the Party Central Committee - For the National Assembly - For the Government - For ministries, ministerial-level agencies and agencies attached to the Government 24 CONCLUSION SOE reform is an important step in the reform process and the transition to a market economy in Vietnam So far the legal framework for representation of state capital owner in enterprises in Vietnam has been gradually improved in order to gradually separate the function of state-owned enterprises with the function of state administrative management of SOEs; To contribute to organizing the efficient management of investment and business of the State capital and assets However, the ownership regime and the way of exercising state ownership in enterprises not fully satisfy the principles or criteria of market economy institutions, the mechanism of representation of state capital owner in enterprises is unsuitable Therefore, studying the mechanisms of representation of state capital owner in enterprises is still an urgent issue that the Party and the society are concerned about The problem of representation mechanism of state capital owner in enterprises in Vietnam has been basically solved in the study of this thesis Theoretical issues on the representation mechanism of state capital in enterprises are outlined from the concept of state ownership in a market economy, the representation of state capital owner in enterprises, the role of SOEs in the economy, the thesis has introduced the concept of State capital owner’s representative mechanism in enterprises Based on the research and evaluation of the actual situation of state capital owner representation mechanism of state-owned enterprises in Vietnam on the organizational structure and operation of SOEs; the Party's and the State’s policies on state capital representation in enterprises; promoting, supervising and monitoring and evaluating representative of state capital owner in enterprises, the thesis has proposed four groups of measures to improve the mechanism of representative of state capital owner in enterprises in Vietnam in the coming time, including: i) general solution group (on enhancing the leadership of the Party in state-owned enterprises, establishing the model of state capital owner representative agency in enterprises in Vietnam; on implementation of rights and responsibilities of representatives of state capital owner ii) groups of solutions on organizational and human structure; iii) group of solutions for inspection, supervision and discipline; iv) solutions for SOE equitisation and restructuring LIST OF WORKS OF PUBLISHED BY THE AUTHOR RELATED TO THESIS Nguyen Thi Minh Phuong (2014), "Unifying the use of statistical forms of monitoring, supervision and implemenation of the Party’s discipline", Journal of Inspection, (4), pp.46-48 Nguyen Thi Minh Phuong (2014), "The role of administrative accounting in budget management", Journal of Finance, (5), pp.58-59 Nguyen Thi Minh Phuong (2014), "Solutions to Enhance Accounting activity in Administrative Units of the Party", Journal of Finance, (5), pp 60-61 Nguyen Thi Minh Phuong (2014), "Synthesis report and statistics on Party supervision and inspection", Journal of Inspection, (6), pp.41-42 Nguyen Thi Minh Phuong (2016), "The Problem set out in Inspection and Supervision of Representatives of State capital Owners in Enterprises", Journal of Inspection, (12), p.38- 40 Nguyen Thi Minh Phuong (2017), "Some issues on the mechanism of inspecting and supervising representatives of state-owned enterprise owners", Journal of Inspection, (11), pp 32-34 ... Committee; Under the provincial Party Committee, the Party Committee or the Party Committee of the business unit of the provincial Party Committee, the Party Committee is organized according to two... Party Secretary, Chairman of Petrovietnam Construction Joint Stock Corporation (PVC) under the Vietnam National Oil and Gas Group has been with the Standing Committee of the Party Committee, the... solutions on equitization, state enterprise restructuring Promoting equitization, divestment To consistently promote SOE equitization in the direction of reducing the state ownership ratio in enterprises;