As capital markets become increasingly integrated, the quality of Corporate Governance is no longer assessed solely by whether a company complies with legal requirements. Investors also pay attention to the protection of minority shareholders, the independence and effectiveness of the Board of Directors (BOD), transparency, the management of conflicts of interest, and the Board’s ability to oversee sustainability-related matters.
The ASEAN Corporate Governance Scorecard – commonly referred to as ACGS – provides a common set of criteria for assessing these aspects among listed companies across ASEAN. For Vietnamese companies, ACGS serves both as a regional benchmarking tool and as a means of identifying gaps between legal compliance and the adoption of good Corporate Governance practices.
What is ACGS?
ACGS (ASEAN Corporate Governance Scorecard) is an ASEAN-wide Corporate Governance scorecard developed as an initiative of the ASEAN Capital Markets Forum (ACMF), with initial support from the Asian Development Bank (ADB). Introduced in 2011, ACGS aims to improve the quality of Corporate Governance, enhance comparability across markets, and recognize companies demonstrating good governance practices in the region.
The latest version of ACGS, revised in 2023 and first applied to the ACGS 2024 assessment, was updated to achieve closer alignment with the G20/OECD Principles of Corporate Governance 2023. One notable change was the introduction of “Sustainability and Resilience” as a separate assessment component.
Accordingly, the scope of the assessment goes beyond shareholders’ rights and equitable treatment, disclosure, and Board responsibilities. It also considers how companies identify, oversee, and manage material sustainability-related risks and opportunities within their strategy, risk management, and internal control systems.
ACGS Assessment Criteria
The ACGS version applied to the 2024 assessment comprises four main areas, reflecting the core components of an effective Corporate Governance system.
Rights and Equitable Treatment of Shareholders
This section assesses how effectively shareholder rights, particularly those of non-controlling shareholders, are protected in terms of access to information and participation in key corporate decisions. It covers matters such as General Meetings of Shareholders, voting rights, Board nominations, dividend policies, related-party transactions, and mechanisms to prevent controlling shareholders from abusing their power.
Sustainability and Resilience
ACGS assesses how companies integrate material sustainability issues into strategy, risk management, and decision-making. The focus extends beyond ESG disclosure to include the Board’s oversight responsibilities and the company’s ability to manage sustainability-related risks and opportunities that may affect long-term value.
Disclosure and Transparency
This section assesses the completeness, timeliness, and accessibility of key information, including ownership structures, financial performance, the Board of Directors, remuneration, related-party transactions, and audit matters. As ACGS assessments rely primarily on publicly available information, the quality and verifiability of disclosed information are particularly important.
Responsibilities of the Board
This area carries the highest weighting and focuses on the composition, independence, capabilities, and effectiveness of the Board and its committees. The criteria also cover risk management, internal controls, succession planning, and Board performance evaluation.
ACGS Scoring Framework
The ACGS uses a two-level scoring mechanism that assesses fundamental governance practices while also recognizing companies that adopt higher standards and applying penalties for indications of weak governance practices.
Level 1 consists of 149 items, with a maximum score of 100 points:
| Assessment Area | Number of Items | Maximum Score |
|---|---|---|
| Rights and Equitable Treatment of Shareholders | 30 | 20 |
| Sustainability and Resilience | 22 | 15 |
| Disclosure and Transparency | 34 | 25 |
| Responsibilities of the Board | 63 | 40 |
| Total | 149 | 100 |
Allocating 40% of the Level 1 score to the responsibilities of the Board highlights the Board’s central role in the governance system. Shareholder rights, transparency, and effective risk oversight are difficult to safeguard without a Board that possesses sufficient capability, independence, and accountability.
Level 2 consists of 18 bonus items, with a maximum bonus of 30 points, and 26 penalty items. Penalties are applied where companies are involved in violations, serious governance incidents, or practices that undermine shareholder rights and integrity.
The final ACGS score is calculated by adding the Level 1 score and bonus points and deducting penalties. The maximum overall score is 130 points. In the 2024 assessment, companies scoring at least 97.5 points, equivalent to 75% of the maximum score, could qualify for recognition as an ASEAN Asset Class company.
ACGS Assessment Methodology
The ACGS assessment process is primarily based on publicly available and accessible information, including annual reports, Corporate Governance reports, Sustainability Reports, company charters, governance regulations and policies, General Meeting of Shareholders documents, and information available on corporate websites. To be included in the assessment and ranking process, most of the required documents must be available in English. A practice is only credited when the disclosed evidence is sufficiently clear, unambiguous, and detailed enough to be verified.
The assessment consists of two layers: a domestic assessment conducted by the designated ranking body in each country and a cross-country ASEAN peer review. In the 2024 assessment, the Top 35 companies from each market, together with companies meeting the qualifying score threshold under the ACGS methodology, were included in the peer review process to enhance consistency and comparability across markets. In Vietnam, only 69 companies were assessed in the 2024 cycle, partly due to the limited number of companies meeting the English-language documentation requirements.
How does ACGS differ from Corporate Governance regulations?
In Vietnam, Corporate Governance requirements applicable to public companies are governed by the Law on Enterprises, the Law on Securities, and relevant implementing regulations, including Decree No. 155/2020/ND-CP, Decree No. 245/2025/ND-CP, and Circular No. 116/2020/TT-BTC. These constitute mandatory legal requirements that companies within their scope must comply with.
ACGS does not replace legal requirements. Rather, it serves as a reference framework for assessing the quality of Corporate Governance against regional and international good practices. Many ACGS criteria go beyond minimum compliance requirements, for example by examining Board independence in greater depth or assessing the quality, transparency, and accessibility of disclosed information.
Put simply, the law establishes mandatory minimum requirements, while ACGS helps companies assess how far their governance practices are from recognized good practices. Legal compliance is therefore an essential foundation, but does not necessarily translate into a high ACGS score.
Why is ACGS important for Vietnamese companies?
ACGS helps companies assess the gap between legal compliance and good governance practices, covering areas ranging from shareholder protection and Board effectiveness to the quality of disclosure. It also enables companies to benchmark their governance practices against peers across ASEAN and identify areas for improvement based on regional good practices.
From the perspective of investors and capital markets, strong ACGS practices can contribute to greater transparency, stronger investor confidence, and better investor protection, thereby supporting corporate reputation and access to long-term capital.
ACGS and Corporate Governance practices in Vietnam
In recent years, a number of Vietnamese companies have proactively used ACGS as a reference framework to strengthen their governance systems.
In the ACGS 2024 assessment, the five highest-scoring Vietnamese companies were FPT, Vinamilk, HDBank, VPBank, and PVCFC. These results indicate that regional governance standards are receiving increasing attention across a range of sectors, from technology and banking to consumer goods and manufacturing.
Vinamilk has also demonstrated continuity in improving its Corporate Governance practices. The company was previously recognized as an ASEAN Asset Class company in the 2019 assessment and continued to rank among the leading Vietnamese companies in the 2024 assessment.
PVCFC provides a notable example of how governance evidence can be systematically organized. The company has developed a dedicated ACGS section on its website, mapping individual ACGS questions to its company charter, Board regulations, annual reports, General Meeting of Shareholders documents, and other relevant disclosures. This approach not only supports the assessment process but also enables investors to verify the company’s governance practices.
The ACGS 2024 report indicates that the quality of Corporate Governance in Vietnam continues to improve, although a significant gap remains compared with the ASEAN average. The 69 Vietnamese companies assessed achieved an average score of 60.2 out of 130 points, compared with the ASEAN average of 91.28 points. Vietnam also had no company scoring 97.5 points or higher – the threshold for recognition as an ASEAN Asset Class company in the 2024 assessment.
Results across individual components also indicate considerable room for further improvement, particularly as the revised ACGS criteria introduce higher expectations regarding Board effectiveness, transparency, sustainability, and resilience.
How should companies prepare to improve their ACGS results?
Companies should begin by assessing the gaps among legal requirements, ACGS criteria, internal policies, actual practices, and publicly disclosed evidence, rather than simply preparing additional documents to “gain points”.
These gaps can be divided into three categories: failure to comply with mandatory requirements; compliance with legal requirements but not yet meeting good practices; and good practices that are already implemented but not sufficiently supported by publicly available evidence.
Based on this assessment, companies can prioritize improvements in material areas such as shareholder rights, related-party transactions, Board independence and effectiveness, risk management, internal controls, and sustainability oversight, while ensuring that disclosures are consistent, accessible, and verifiable.
CGS’s perspective: From “achieving a high ACGS score” to improving the quality of Corporate Governance
ACGS is a useful tool for measuring governance quality, but the score itself should not be the ultimate objective. If a company focuses only on improving documentation at the time of assessment, its score may increase without necessarily reflecting substantive improvements in governance practices.
From CGS Vietnam’s perspective, companies should approach ACGS through three steps: gap assessment → mechanism improvement → enhancement of substantive effectiveness. When good governance practices are embedded in the Board’s regular activities, the ACGS score becomes an outcome of a high-quality governance system rather than merely the product of an assessment exercise.
A well-governed company is not simply one that has comprehensive regulations and disclosure documents. It also needs to ensure that authority is appropriately allocated and overseen, conflicts of interest are effectively managed, shareholders are treated equitably, and the Board possesses the capabilities required to provide strategic direction, constructive challenge, and oversight to safeguard the company’s ability to create long-term value.
References:
- ASEAN Capital Markets Forum, 2024 ASEAN Corporate Governance Scorecard.
- ASEAN Capital Markets Forum, ASEAN CGCA 2025 Booklet.
- ASEAN Capital Markets Forum, ACGS Country Reports and Assessments 2019.
- ASEAN Capital Markets Forum, ACGS Country Reports and Assessments 2024.
- Government of Vietnam, Decree No. 155/2020/ND-CP.
- Ministry of Finance, Circular No. 116/2020/TT-BTC.
- State Securities Commission of Vietnam, Vietnam Listed Company Awards 2025.
- HDBank, Top 5 Vietnamese Companies in ACGS 2024.
- PVCFC, ACGS Self-Assessment Section.
- Vinamilk, ASEAN Asset Class in the 2019 Assessment.
About CGS Vietnam
CGS Vietnam Consulting Joint Stock Company provides specialized advisory services in Corporate Governance, Sustainability (ESG), Risk Management, and Internal Audit. Backed by a team of experienced professionals with deep expertise in international best practices, CGS Vietnam partners with businesses to strengthen corporate governance, enhance management capabilities, meet investor expectations, and achieve long-term sustainable growth.
Contact CGS Vietnam:
Hotline: (+84) 363 581 520 | Email: [email protected] | Website: https://cgsvietnam.com/
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