Corporate Governance
Report of the Board of Directors
Overall evaluation
Based on the general regulations for the BOD's activities and the Corporate Charter, the BOD promptly directed, closely supervised, and consulted the BOM in a timely manner to realize strategic objectives in 2023.
Strategic planning was consolidated throughout the Corporation. Hence, FPT implemented critical targets and action plans responsively, clearly, and consistently.
FPT's BOD, particularly its independent members, are distinguished leaders with sterling reputations in the regional IT sector. They boast extensive management experience and a wide-reaching network of connections. The BOD sustained transparent management practices in 2023 by leveraging its exceptional strengths and building upon past achievements. This commitment facilitated FPT in maintaining its impressive growth trajectory, solidifying its position as a premier technology corporation in both the Vietnamese and global markets.
Evaluation of the activities of the Committees
The Personnel and Remuneration Committee
In 2023, the Personnel and Remuneration Committee spearheaded the research and development of numerous pivotal programs and policies for human resource development within the Corporation and its subsidiaries, undertaking several notable initiatives as below:
- Directing the BOM to conduct research and formulate the FPT human resources strategy for the 2024 – 2026 period, aligning with growth objectives and advancing toward the DC5-135 strategy.
- Directing the implementation of programs on planning and rotating senior leaders: The Committee conducted programs on planning, evaluation, appointment, rotation, and enhancement of the senior leadership at the Corporation and several subsidiaries. For instance, it collaborated with SCIC to appoint new Chairman and CEO for FPT Telecom, and facilitated rotations and appointments for key positions such as Chairman of FPT IS, Vice Chairman of FPT University Council, two Deputy CEOs of FPT Software, CEO of Base.vn, and COO of FPT IS. Additionally, the Committee directed the BOM to compile a report summarizing the implementation of FPT's staff rotation regulations after three years of enactment.
- Guiding and overseeing the issuance and execution of numerous critical HR programs and policies across the Corporation and its subsidiaries.
- Developing, implementing and measuring specific remuneration policies in subsidiaries in order to retain talent and control the turnover rate such as: The procedure to support house/car loans and the policy to increase earnings for groups of employees in some specific departments.
- Formulating and deploying new recognition and incentive frameworks, with a focus on empowering managers at every tier to promptly acknowledge accomplishments and inspire staff, thus enhancing labor productivity and business performance at FPT. Noteworthy examples include the Merit Celebration Policy and Commendation Policy.
- Formulating and enforcing protocols for assessing the performance of functional leaders at subsidiaries with the objective of enhancing management proficiency across the Corporation.
The Policy Development Committee
Internal Management Policy
- The management with OKRs (Objectives and Key Results) as a methodology remained extensively applied to all employees worldwide. This marks the fourth consecutive year of implementing this tool within the Corporation. The Chairman and CEO of all subsidiaries was required to convene in quarterly meetings to report on OKRs with the BOM, setting a precedent for employees. OKRs have evolved into a guiding framework for FPT and its subsidiaries, resulting in 95 - 97% completion rate of OKR goals within the designated timeframes.
- The policy of senior officials' rotation remained steadfastly implemented, aiming to train and develop the next cohort of leaders while fostering motivation for development across the organization. In 2023, approximately 120 senior leaders and 350 middle-level leaders throughout the Corporation underwent rotations. This initiative is anticipated to bolster the labor productivity of subsidiaries and provide individuals with leadership potential the opportunity to showcase their capabilities.
- The Program for Enhancing Functional Management Capacity was designed to bolster the swift advancement of the entire Corporation. This program placed emphasis on reinforcing the role of Commanders (Heads of functional department at FPT Corporation) by means of management and policy formulation to foster the function's operations, particularly in technology, aimed at optimizing resources for product research and development. Furthermore, the Policy Development Committee provided counsel to the BOM on pivotal strategies, including the establishment of two functional systems: Procurement and Legal.
- The Discipline Enhancement Program was paramount in ensuring the growth and sustainable development of the Corporation, particularly during periods of economic fluctuation. At the behest of the Policy Development Committee, the BOM was urged to persist in refining discipline throughout plan implementation, with leaders serving as exemplars in executing business plans aligned with established objectives. Enhancing discipline remains a foremost priority for FPT in 2024.
Business Development Policy
- Policy for developing and retaining customers in the domestic market: Recognizing the Corporation's internal capabilities, the Policy Development Committee proposed the implementation of the Local Representative Program to leverage internal strengths and foster solidarity among member companies in market management and expansion. Additionally, the Committee advised the BOM on promoting cross-selling of products among member companies. Furthermore, the Committee put forth new directions related to the development of product suites, including leveraging existing FPT products or exploring new ones to cater to the needs of corporate customers (e.g., the Made-by-FPT Ecosystem, ERP solutions), public sector clients (e.g., Project 06 solutions), and individual customers.
- Investment in Expanding Operations and Capacity in Foreign Markets: In 2023, FPT expanded its operations by establishing 05 new offices in various markets, including Japan, Korea, China, and Mexico. Concurrently, the Corporation executed 04 M&A deals and strategic investments in renowned global technology companies while inaugurating a company specializing in automotive software. These strategic endeavors played a pivotal role in generating a remarkable revenue of 01 billion USD from foreign markets, positioning FPT among the league of billion-dollar IT service enterprises worldwide.
- Strategic projects: Strategic initiatives like Eat – Learn – Work – Health and DC5 remained focal points for investment and received direct advisory support from the Committee. Notably, the DC5 Strategy project advanced significantly, marked by the introduction of the Happy Club Ecosystem and the signing of a collaboration agreement with Visa during the 2023 FPT Techday.
- Emerging Strategic Directions: The Corporation prioritized investments to establish a solid foundation for future sustainability, particularly in automotive software and semiconductor (IC) manufacturing, and AI technology… Initial successes stemming from these new development initiatives included the establishment of FPT Automotive in the US, the formation of FPT Semiconductor, and the acquisition of a stake in Landing AI, positioning the company as a strategic partner.
The Chairman's Office
Along with fulfilling the role of supporting the BOD in professional activities, the Chairman's Office also actively maintained and promoted external relationships with key partners to promote business development. Simultaneously, the Office also guaranteed the timely and precise provision of information, facilitating the prompt announcement of corporate governance resolutions and reports in accordance with relevant regulations. Besides, the Chairman's Office coordinated with other departments to organize the 2023 AGM in April 2023.
Orientations for the BOD's activities in 2024
To build upon the successes of 2023, in 2024, the BOD will maintain close oversight, discussions, and coordination with the BOM. The focus will be on directing the implementation of strategic objectives to reinforce FPT's position and expand business areas horizontally and vertically. This approach aims to create favorable conditions for the BOM to fulfill its business tasks in 2024.
Furthermore, the Board members will persist in advising and contributing to the identification, acquisition, and utilization of external resources, including partnerships, customers, and enterprises, to expand business operations, enhance the customer base, and develop products. Specifically, in 2024, FPT will steadfastly advance the DC5 ecosystem, adhering to a roadmap for the concurrent development of AI and data-based products and services, fostering individual customer satisfaction, and driving efficiency and success for organizations.
The management of objectives and key results (OKRs) will persist as a vital internal management tool to drive the realization of FPT's strategic objective of "dominating the top" in 2024.