The Role of the General Shareholders in Corporate Governance

The role of the General Shareholders in a company’s internal governance system encompasses the tasks and functions of the board in management and administration. This body holds the highest decision-making authority regarding strategic development, organizational structure, and critical issues of the company. In the following article, Long Phan will provide a detailed analysis of the functions, tasks, and impact of the General Shareholders’ Meeting on the company’s business operations. Please refer to the article for more information!

Overview of the General Shareholders’ Meeting

Definition

The General Meeting of Shareholders is the highest decision-making body of a joint-stock company. This body includes all shareholders with voting rights and performs crucial functions in corporate governance.

The organizational structure of a joint-stock company typically includes the General Meeting of Shareholders, the Board of Directors, the Supervisory Board, and the Executive Board. The General Meeting of Shareholders convenes annually once a year, within 4 months from the end of the fiscal year.

In addition, the General Meeting of Shareholders can hold extraordinary meetings when necessary. A General Meeting of Shareholders is conducted when shareholders attending the meeting represent more than 50% of the total voting shares. If the quorum is not met, the company may convene a second or third meeting according to legal provisions.

The General Meeting of Shareholders plays a vital role in deciding the company’s major issues. This body approves development directions, decides on the types and total number of shares to be issued, elects and dismisses members of the Board of Directors, and approves the annual financial statements.

The General Meeting of Shareholders also decides on other important matters, such as amending the Charter, restructuring, and dissolving the company.

Legal Basis: Article 138 of the Law on Enterprises 2020.

Functions and Responsibilities of the General Shareholders’ Meeting

The General Meeting of Shareholders plays a crucial role in corporate governance, carrying out many important functions and responsibilities. Specifically, it is responsible for:

• Deciding the company’s development strategy;
• Electing and dismissing members of the Board of Directors and the Supervisory Board;
• Determining the number, term, and qualifications of members of the Board of Directors;
• Approving the operational regulations of the Board of Directors and the Supervisory Board;
• Approving the audited annual financial statements;
• Deciding the annual dividend rate for each type of share;
• Approving the list of independent auditing firms and deciding which auditing firm will audit the company’s operations;
• Making decisions on other major company issues.

Regarding the company’s development strategy, the General Meeting of Shareholders has the following functions and responsibilities:

• Approving the company’s long-term development orientation;
• Reviewing and approving business plans and financial goals proposed by the Board of Directors;
• Deciding on investments or the sale of significant assets, valued at 35% or more of the total asset value.

The Role of the General Shareholders in Effective Corporate Governance

The General Meeting of Shareholders is a body that significantly influences corporate governance. This entity decides the most crucial matters of the company. The General Meeting of Shareholders establishes an effective oversight mechanism for the Board of Directors and the Executive Board.

Through the election and dismissal of members of the Board of Directors, the General Shareholders’ Meeting directly impacts the corporate governance structure. This body decides the number, standards, and tenure of the Board of Directors’ members, ensuring that the Board has the necessary competence and experience to manage the company effectively.

The General Shareholders’ Meeting is also authorized to approve critical reports such as financial statements, reports from the Board of Directors, and reports from the Supervisory Board. This creates a stringent oversight mechanism over the company’s operations.

The General Shareholders’ Meeting also makes key decisions such as amending the Charter, increasing capital, and repurchasing shares. These decisions have a direct impact on the capital structure and operations of the business.

How to Organize a Shareholders’ General Meeting in a Company

The Role of the General Shareholders consists of all shareholders with voting rights.

The General Shareholders’ Meeting is held annually once a year. In addition to the annual meeting, the General Meeting of Shareholders may convene extraordinary meetings. The location of the General Meeting of Shareholders is determined by where the chairperson of the meeting is present and must be within the territory of Vietnam.

The General Meeting of Shareholders must be held annually within 4 months from the end of the fiscal year. Unless otherwise stipulated by the company’s charter, the Board of Directors may decide to extend the annual General Meeting of Shareholders if necessary, but no later than 6 months from the end of the fiscal year.

Legal basis: Article 139 of the Law on Enterprises 2020.

Effective Business Management Consulting Services

With a team of highly experienced experts, Long Phan provides clients with effective business management consulting services, including:

• Evaluating and analyzing the current management structure of the business, identifying strengths and weaknesses, and proposing necessary improvements;
• Advising on the selection of a suitable management structure model for the business;
• Analyzing and designing a management structure that aligns with the company’s current situation;
• Providing advice on human resource development;
• Assisting in the implementation and adjustment of the business management structure;
• Offering consulting support to resolve disputes during the internal structure implementation process.

And supporting other related services as requested by the client.

The above information relates to The Role of the General Shareholders in corporate governance that Long Phan wishes to share with you. It can be said that the General Meeting of Shareholders plays an extremely important role in corporate governance. If you have any further questions that need to be addressed, please contact Long Phan via Hotline: 0906735386 for the fastest support and consultation