I must preface this by saying I expect brickbats for writing this. I fundamentally support Mr. Truong Gia Binh’s philanthropic impulse. As an entrepreneur, I believe deeply in corporate social responsibility (CSR), and I have long admired Mr. Binh and the leaders of FPT for building a company with an outstanding culture of openness and meritocracy.
Recently, Mr. Binh shared an incredibly inspiring story: the idea to establish the FPT Military Cadet School for orphans was conceived just 24 hours before he announced it publicly. The commitment—a long-term pledge to care for 1,000 children who lost their families during the pandemic—is heart-warming and a testament to his goodwill.
However, the question I struggle with is one of corporate governance. From the perspective of international standards, Mr. Truong Gia Binh’s decision, while noble, poses serious organizational issues.
The fiduciary breach of a public company
We must acknowledge two undeniable facts:
- FPT is a corporation.
- FPT is a publicly listed company with numerous shareholders, including foreign institutional investors, not a private or family-owned firm.
The ultimate goal of a public company is to create profit for its shareholders, not to function as a charity. When a public company engages in philanthropy, it must be funded through a dedicated CSR budget that has been explicitly approved by the Board of Directors and/or the General Shareholders’ Meeting. Every single dong spent on charity is taken directly from the company’s annual profit, affecting shareholder rights.
To put this crudely: FPT’s valuation is roughly 22 times its annual earnings. If Mr. Binh’s estimate of the annual cost to raise 1,000 orphans is 80 billion VND, his impulse decision, if funded by FPT, has instantly reduced the company’s theoretical market value by approximately 1,772.8 billion VND (80 billion x 22.16). While the stock price may not immediately reflect this—and may even receive a short-term boost from positive PR—the 80-billion-VND hole will appear clearly in next year’s profit-and-loss statement.
The standard of global governance
If this action was already pre-approved by the FPT Board of Directors (BOD) through an existing CSR fund, the initiative is commendable.
But I find it difficult to believe that between the moment the idea was conceived and the public announcement 24 hours later, Mr. Binh—who owns only 6.11% of FPT shares—had time to convene and receive the BOD’s formal approval. Furthermore, this type of decision is typically the responsibility of the CEO, not the Chairman. If it bypassed the CEO and the BOD, it risks being interpreted as an overreach of power in the name of the founder.
This creates a negative precedent regarding FPT’s governance. It is not a habit a major enterprise should cultivate, as shareholders are legally entitled to demand an explanation from the Chairman for any decision that compromises company assets. In extreme cases, they could even sue.
The billionaire blueprint (the solution)
The world’s billionaires donate enormous sums, but they do so primarily as private citizens, separate from the public companies they founded. If their companies engage in CSR, it is done through explicitly Board-approved activities.
Billionaires use their personal stock holdings to fund their philanthropic visions:
- Bill Gates used his personal assets to establish the Bill & Melinda Gates Foundation.
- Warren Buffett contributed billions via his personal shares of Berkshire Hathaway.
- Azim Premji (India) transferred billions in personally owned shares to his foundation.
Mr. Truong Gia Binh, with his 55 million FPT shares valued at over 5.1 trillion VND, can follow this ethical and legal blueprint. He could sell a portion of his personal stock, rally other shareholders or FPT employees to contribute, and put the funds into a trust dedicated to the orphans.
This method ensures transparency, safeguards shareholder rights, and avoids the dangerous precedent of founders using public funds for their personal, albeit noble, commitments. It is a necessary step to demonstrate respect for shareholders and adherence to global corporate governance standards.
