WAVERING BETWEEN SHAREHOLDERS’ RIGHT TO ACCESS INFORMATION AND CORPORATE NEED OF MAINTAINING CONFIDENTIALITY

Global Vietnam Lawyers is pleased to introduce an article by Lawyer Le Thanh Tam – Lawyer Tran Thanh Tung titled “Wavering Between Shareholders’ Right to Access Information and Corporate Need of Maintaining Confidentiality”. This article was originally published in The Saigon Times on 08 May 2025 and is shared here with permission from the publisher.

Providing information to shareholders – how to balance shareholder rights and corporate operational efficiency?

At a meeting at the beginning of the year, the general director of a public company shared a dilemma in the company with more than ten thousand shareholders when a group of shareholders continuously requested the company to provide documents, from resolution of the board of directors (BOD), company regulations to contracts, and even any invoices for a certain payment. Continuous and repetitive requests made shareholder-serving staff busy, not having enough time to take care of other shareholders, and the general director had to spend time assessing whether the documents are sensitive or bound by confidentiality obligations with partners before approving the provision of information to shareholders. Although knowing for sure that such shareholders intentionally caused troubles to the executive board, the general director could not rely on any basis for refusal.

On the other hand, shareholders often complained that the company provides information slowly, with restrictions, or even rejections on the grounds of “business secrets”.

So how to balance the right of shareholders to request information and the effective operation of the company?

Right to access information: a tricky conflict to resolve

Shareholders are the owners of a joint stock company, so it is reasonable for them to have the right to access information. Article 115 of the 2020 Enterprise Law stipulates that shareholders or groups of shareholders owning 5% or more of common shares (or a smaller percentage according to the charter) are entitled to review, search, and extract minutes, resolutions of the BOD, financial statements, reports of the supervisory board, contracts, transactions that must be approved by the BOD, and other documents, except for documents related to “trade secrets” or “business secrets”.

Article 115 is given priority aimed at ensuring shareholders’ access to important information, but this provision leaves a controversial loophole. First, the phrase “other documents” is unclear, allowing shareholders to request any document except “trade secrets” or “business secrets”. However, the 2020 Enterprise Law does not clearly define these concepts. Meanwhile, the 2009 Intellectual Property Law (Article 4) stipulates that “trade secrets” are information obtained from financial and intellectual investments, which has not been disclosed, being of a business value. The 2018 Competition Law (Article 45) defines acts of trade secret infringement in the form of unauthorized access and use of information. The lack of consistency between the laws makes it difficult to apply and reduces transparency.

Second, the Enterprise Law does not have a protection mechanism to classify “trade secrets” or “business secrets”. Enterprises must decide by themselves, facing not only complaints from shareholders if they refuse, but also risking the disclosure of sensitive information if they provide it without control.

Third, the contradiction between the Enterprise Law, the Intellectual Property Law and the Competition Law further complicates the problem. For example, documents that are not “business secrets” under the Intellectual Property Law may be considered as “trade secrets” by enterprises, causing disputes with shareholders.

Eventually, the law does not clearly stipulate the process for requesting information, such as how to do it or the deadline for responding. This leads to the risk of shareholders abusing their rights, making excessive requests, and affecting the company’s operations.

Recommendations for enterprises

Pending the legal amendments, enterprises need to proactively address the problem. First of all, it is necessary to formulate regulations on classifying information, identifying “trade secrets” and “business secrets” based on the criteria of the Intellectual Property Law and the Competition Law, such as business strategies or customer data.

Based on that, enterprises should issue regulations on providing internal information, determining the scope of information that shareholders can access, distinguishing readable documents, that can only be viewed on the ground (such as meeting minutes of the BOD), from copyable documents (such as financial statements). The regulations should clearly state the information request process, response time, and dispute resolution.

In addition, to prevent abuse of rights (such as illegal use of competitive information), enterprises can require shareholders to commit to confidentiality or impose sanctions if they violate. These measures help balance shareholder rights and the stable operation of the company, improve governance efficiency, and cement investor sentiment.