Effects of Corporate Governance Code on Corporate Governance Practices and Firm Performance in Vietnam

ABSTRACT This article investigates the impact of Vietnam's Corporate Governance Code (CGC) on corporate governance practices and firm performance from 2016 to 2023. We find that the CGC enhances board independence and gender diversity. Tobin's Q has improved for firms that have increased the number of independent and female directors and for firms with external monitoring exposure. There was no empirical evidence for an increase in the accounting measure of operating performance, except for firms having Big 4 auditors and high state ownership. These findings suggest the capital market's appreciation of corporate governance reforms, but limited operating performance benefits. The study highlights the CGC's role in shaping corporate behavior in emerging markets and offers implications for policymakers and business leaders seeking to strengthen governance frameworks.