According to the Enterprises Law, a member of BOM has the following general duties:
- to exercise his or her delegated powers and perform his or her delegated duties strictly in accordance with the Enterprises Law, in relevant laws, the charter of the company, and the resolutions of the general meeting of shareholders;
- to exercise his or her delegated powers and perform his or her delegated duties honestly and prudently to their best ability in the maximum legitimate interests of the company and of the shareholders of the company;
- to be loyal to the interests of the company and shareholders of the company; to not use information, secrets, business opportunities of the company, not to abuse his or her position and powers and assets of the company for his or her own personal benefits or for the benefit of other organizations or individuals;
- to notify in a timely manner, fully and accurately the company of enterprises in which he or she or his or her related persons own or have contributed capital or controlling shares;
- in addition to the obligations mentioned above, the BOM and the director or general director may not increase their salaries and pay bonuses where the company has not paid in full all of its debts due and payable; and
- other obligations in accordance with the Enterprises Law and the charter of the company.
Apart from liability in damages generally, directors are also exposed to civil and criminal sanctions in the event of a breach of duty
According to Decree 102, a member of BOM shall be sued by a shareholder or group of shareholders holding at least 1% of the total number of ordinary shares for a consecutive period of six months for the following breaches:
- failure to properly exercise assigned rights and duties, failure to perform in full or promptly a decision of the BOM, or exercised assigned rights and duties contrary to law, contrary to the company charter or contrary to a resolution of the general meeting of shareholders;
- use of information, know-how or business opportunities of the company for his or her personal benefit or for that of another organization or individual;
- abusing his or her station or position and assets of the company for his or her personal benefit or for that of another organization or individual;
- other cases as stipulated by law and the company charter.
The order and procedures for instituting proceeding shall be implemented in accordance with the corresponding provisions of the law on civil proceedings.
There is no specific legislation under the Criminal Code provides that the Board Members would be exposed to criminal sanctions in case it breaches the duty to the company. However, in case the Board Member, in individual capacity, carries out an act having the sign of crime and the danger of such act to society is considerable, then it is subject to the view of the Vietnamese courts, such Board Member may take the criminal responsibility and may be exposed to penalties.
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