The wave of hiring foreign CEOs

A foreigner, David Alexander Newbigging, has been nominated for the post of the member of the board of directors of REE (Refrigeration Engineering Enterprise). He does not hold REE shares now, but has been nominated by the big shareholder who holds 27.65 million REE shares, Platium Victory Pte Ltd.

More and more foreign businessmen have been assigned important positions at Vietnamese businesses recently. 

The wave of hiring foreign CEOs began 3 years ago, when Techcombank, one of the biggest joint stock banks in Vietnam, replaced the then CEO Nguyen Duc Vinh, who had been on the post for 12 years by that time, with a British CEO, Simon Morris.

Though Vinh very succeeded on his post, Techcombank still believed that it needs a new CEO for the new development stage. The foreign banker, with impressive profile on his career, was supported by the key personnel of the bank. He was believed to help preserve the high growth rate of the bank in a more competitive environment.

In March 2012, Maritime Bank announced the appointment of an Indian, Atul Malik, to the post of CEO, hoping that the foreign businessman would help improve the corporate governance and make it come closer to the international practice. 

However, Lau Boo Tuan, Singaporean nationality, is considered the first bank CEO in Vietnam. He worked for Mekong Bank, headquartered in Tien Giang province.

In Suk Ko, former Deputy President of South Korean Hyundai Group and CEO of Hyundai Investment, was appointed as the CEO of Vietnamese Bitexco, a real estate group in early 2011.

Mar Laude, French nationality, became the CEO of Dong Tam Group in 2008. Chad Ovel, US nationality, was appointed as the CEO of the AA Construction and Architecture JSC. Japanese Ogawa Takeo became FPT Japan Company in early 2010, while Madhur Maini CEO and member of the board of directors of Masan Group, a consumer goods manufacturer.

Will foreign CEOs help?

The rapid development of Masan Group and the sharp increase in the asset value of Mekong Bank show the ability of the foreign CEOs.

However, observers have commented that they still cannot see the “personal hallmarks” of the foreign businessmen in Vietnamese businesses. In other words, what the foreign CEOs have brought are not as high as businesses expected.

A lot of foreign CEOs have very impressive curriculum vitas, but they still cannot do anything “impressive,” or make any breakthrough to Vietnamese businesses. Some commercial banks with foreign CEOs still have reported unsatisfactory business results.

Explaining this, experts say foreigners may have good experiences in doing business in the international market, but still have deep knowledge about the Vietnamese business environment.

The foreign CEO was hoped to help Maritime Bank improve the corporate governance skills. However, investors keep complaining that the bank’s reports have not been updated.

To date, investors still have not been informed about the business performance of the bank in 2012, and the first six months of 2012. Only the annual 2011 report was exposed which showed the sharp decrease in its profits.

Vietnamnet