Lately, following many events related to start-up companies, I have noticed that the press and many of you often use the terms Founder and Chairman. I have a few remarks and suggestions below:
1. Founder or Co-founder (“Người sáng lập” or “Đồng sáng lập”)
I strongly do not support the rampant and abusive use of the word “founder” in the press and titles as seen today. There are two reasons. The first reason is that Vietnamese should be used for ease of understanding and clarity. Calling someone the “Người sáng lập” (founder) of a company won’t kill anyone. Why must it strictly be “founder” to look prestigious? Reading an entire article in Vietnamese, suddenly coming across the fancy word “founder” feels as uncomfortable as chewing on grit in rice.
The second reason is that I advise those of you who are new entrepreneurs (and the press), if you must use it, you should use the term “đồng sáng lập” or “co-founder.” You should be humble about yourselves and highly appreciate the role of your associates, because rarely does a start-up company succeed through being founded by only one person. Personally, I feel very embarrassed if anyone calls me the “founder” of this or that. Everything I have accomplished carries the imprint of very many associates. Recognize their contributions. There is no need to “delude” oneself too early for any reason.
2. Chairman/Chủ tịch or General Director/CEO
Does anyone recognize these names: Robyn Denholm, John Thompson, John Hennessy, and Liang Hua? In order, they are the Chairmen of the Board of Directors of Tesla, Microsoft, Alphabet (Google’s parent company), and Huawei. Probably 90% of readers who do not use a Google search (myself included) would have no idea who the above individuals are.
But if asked: Elon Musk, Satya Nadella, Sundar Pichai, and Ren Zhengfei, surely over 50% of us will know. They are the Chief Executive Officers (CEOs) of Tesla, Microsoft, Alphabet/Google, and Huawei.
You in Vietnam and the Vietnamese press very much love to use the word “Chủ tịch” (Chairman) without perhaps truly understanding what the true nature of this term is. Meanwhile, reading modern Western and East Asian financial newspapers, we see them referring extensively to the chief executive officer (CEO). According to the US/UK governance model (which we are learning a lot from), the chairman does not have a role as important and grand as the CEO.
However, in Vietnam, the word “chủ tịch” perhaps sounds more impressive and luxurious than “tổng giám đốc” (general director), so brothers and sisters compete to use this term. From tiny companies to large ones. A limited liability company with a few people is also called chairman, and a large public company is also called chairman.
According to the definition (by Vietnamese law and international practice), the Chairman of the Board of Directors (Chairman of the Board) has the following rights:
- Formulate operational programs and plans of the Board of Directors;
- Prepare agendas, content, and documents serving meetings; convene and chair meetings of the Board of Directors;
- Organize the adoption of resolutions of the Board of Directors;
- Supervise the organizational implementation process of resolutions of the Board of Directors;
- Chair meetings of the General Meeting of Shareholders and meetings of the Board of Directors;
- Other rights and obligations according to the provisions of the Law on Enterprises and the company Charter.
Meanwhile, the General Director (TGĐ or CEO), by definition, is the person ultimately responsible for executive management and setting company strategy. According to Wikipedia, the CEO is “the highest executive position of an organization, in charge of the overall management of a corporation, company, organization, or agency. The CEO must report to the board of directors of that organization.”
So what is the relationship between Chairman and General Director? According to international practice, the General Director/CEO is the person holding the highest executive power. Meanwhile, the Chairman is the person leading the Board of Directors to govern the company and supervise the executive team (executive board). The Board of Directors supervises, while the Executive Board holds operational control, in which the CEO is the person in the highest position.
Perhaps the abuse of the title “chủ tịch” is due to our learning from Chinese friends or East Asian countries. In these economies, the title “chủ tịch” is often attached to “boss,” the person who owns the company the most. At the same time, the word “chủ tịch” sounds very grand. No different from the state president or president.
In Vietnam, many times the chairman behaves like a General Director/CEO. Not worrying about governance, but instead worrying about directing and micro-managing the General Director. If so, those individuals had better step down to become CEO instead.
If this way of addressing is abused, it will have the following consequences:
- Diminish/disregard the role of the General Director/CEO, turning the General Director into a figurehead;
- Unconsciously encourage a family-company style model or melodramatic glorification;
- Demonstrate a lack of understanding regarding modern governance principles or inadvertently encourage the blurring of boundaries between governance and executive management.
To give an easy-to-understand example: the Chairman of the Board is somewhat similar to the speaker/president of parliament or the house of representatives. Meanwhile, the CEO is somewhat like the prime minister/president. In principle, only parliament has the power to depose the president/prime minister; and only parliament approves major government decisions and directions. But operational management must belong to the prime minister/president. Do you see anyone mentioning the speaker of parliament/house very much?
Therefore, I also advise the press circle to use terms accurately. Call key leaders by their actual positions as general director/chief executive officer, instead of praising and flattering them with the fancy word “chủ tịch.”
Nguyen Quoc Toan
