The Developing Fiduciary Standard in Vietnamese Corporate Law

Vietnam has rapidly developed the legal framework for commercial business beginning in the early 1990s. Through successive revisions of its company law, Vietnam has provided more detailed standards and rules for directors and managers of companies. These rules and standards clearly parallel the fiduciary duty standards and rules found in many countries. However, the literature on legal transplantation has highlighted the difficulty of transplanting legal concepts from one country to another. In cases where legal drafting has tracked another country’s concepts, transplants have appeared to fail partly or totally where corresponding procedures and institutions did not exist in and were not transplanted to the recipient country. Vietnam’s development of standards and rules for director and manager duties may present another case of this phenomenon where: (i) the specification of the standard of director and manager performance closely follows the duty of care and duty of loyalty formula familiar in the U.S. and other countries, but it remains unclear whether the standard as a whole can be considered to impose any higher or moral obligation in addition to what is imposed by the ordinary contractual standard; and (ii) the absence, at least until the date of this paper, of any realistic possibility for shareholders to file a derivative suit and uncertainty about procedural alternatives has limited the effectiveness of the standards and rules of director and manager performance.