Entering the 2025–2030 period, with 2025 serving as a critical turning point and the global textile and garment industry facing heightened uncertainty, Vinatex has launched a comprehensive reform of its performance assessment system for Capital Representatives across its member companies. In the interview below, CEO Cao Huu Hieu discusses the new evaluation criteria and the transformative KPI framework, which introduces a more transparent and quantifiable approach to assessing leadership performance. The new system is designed to balance immediate financial imperatives with long-term strategic commitments, including ESG and digital transformation, in order to preserve and strengthen Vinatex’s industry leadership.
Vinatex’s Capital Representatives: From Capital Preservation to Strategic Development
Mr. CEO, could you share with us the key drivers behind the Group’s decision to fundamentally reform the evaluation framework for Capital Representatives over the past year?
Over the years, Vinatex has regularly evaluated its Capital Representatives at member enterprises to acknowledge their significant contributions to the Group’s annual performance. At the same time, these assessments help identify issues that require improvement at an early stage, allowing the Group to recommend corrective measures and support Capital Representatives in carrying out their responsibilities more effectively. This, in turn, enhances their role in driving business development, as well as in preserving and increasing the value of the entrusted capital.
In 2025, this process was comprehensively redesigned. The most significant impetus for the reform came from the growing demand for greater transparency, objectivity, and precision in performance evaluations, coupled with the need to create new growth drivers for the Group as it enters a new phase of development.
Against the backdrop of an increasingly volatile textile and apparel industry and rising pressure to double-digit growth. Improving total factor productivity (TFP), strengthening supply chain linkages, fostering innovation, accelerating digital transformation, building high-quality human resources, and meeting ESG standards have become essential pillars of competitiveness and sustainable development. As a result, our evaluation system also needed to change so that it could adequately reflect these priorities.
Based on these requirements, Vinatex has developed a new evaluation framework that goes beyond measuring final financial outcomes to also assess management capabilities, adaptability to market fluctuations, and the contribution of Capital Representatives to the long-term development objectives of both their enterprises and the Group.
What is the most significant “breakthrough” in Vinatex’s 2025 evaluation criteria for Capital Representatives compared with previous years?
Although this year’s evaluation framework continues to be built around five key pillars: Finance, Market, Human Resources, Investment and Development, and Digital Transformation — the most significant breakthrough lies in the greater emphasis on quantitative assessment and a shift in approach from merely evaluating end results to assessing the quality of governance and the capability to deliver sustainable performance.
Previously, the assessment process focused primarily on indicators related to production and business performance. This year, the Group has added a range of new criteria that more comprehensively reflect management quality and the company’s ability to compete and grow sustainably over the long term.
Specifically, within the financial dimension, for the first time, Vinatex has introduced indicators such as the Cash Conversion Cycle (CCC) and Total Factor Productivity (TFP) to assess cash flow management, growth quality, resource efficiency, and long-term competitiveness. In the market dimension, the evaluation framework goes beyond revenue generation and considers market diversification, customer portfolio quality, and the sustainability of the company’s market structure. In terms of investment and digital transformation, the new criteria are designed to encourage enterprises to increase technology investments, the application of advanced management practices, and enhanced competitiveness. At the same time, the human capital indicators have been further strengthened to support the development of a high-quality workforce.
Another notable enhancement is that the indicators have been designed with adjustment coefficients tailored to the specific characteristics of each business segment — such as spinning, weaving, and garment manufacturing — to ensure fairness and enhance comparability across different business units.
Aligning the Group’s strategic objectives with actual performance at member companies has always been a challenging task. This year, what principles did Vinatex apply in designing the KPI framework for Capital Representatives to ensure that they move beyond merely “preserving capital” and take a more proactive role in “driving strategic development”?
To provide a comprehensive assessment, the KPI framework for Capital Representatives has been structured around a dual objective: measuring current performance while also evaluating the enterprise’s capacity to create sustainable growth and long-term value.
We believe that current business performance remains the most important indicator of a Capital Representative’s management and leadership effectiveness and should be recognized properly. Therefore, performance indicators reflecting current results — such as Return on Equity (ROE), dividend payout ratio, and the actual value of dividends submitted to Vinatex — continue to carry significant weight in the evaluation framework. These metrics directly reflect capital efficiency, profitability, and the enterprise’s tangible contribution to the Group’s overall financial strength.
However, relying solely on short-term results makes it difficult to create motivation for companies to invest in the future. Therefore, in addition to indicators that measure current performance, this year’s KPI framework introduces new metrics to assess governance quality, financial health, and the enterprise’s long-term development capabilities.
More importantly, we have established a direct linkage between the Group’s strategic objectives and the evaluation framework for Capital Representatives. Key strategic priorities such as market development, customer quality enhancement, digital transformation, technological innovation, human capital development, and ESG implementation — have all been translated into specific performance indicators.
The new KPI framework, therefore, is not merely a tool for evaluating annual performance, it also acts as a mechanism for transmitting the Group’s strategic priorities to every member enterprise, ensuring that Capital Representatives clearly understand their responsibility to deliver near-term results while simultaneously advancing the Group’s long-term development directions.
Building a Proactive, Transparent, and Effective Governance Culture
Considering that, enterprises are influenced by numerous external factors, particularly market conditions. How does the Group’s 2025 evaluation framework distinguish the actual capabilities of Capital Representatives from the impact of these external factors?
In developing the 2025 evaluation framework, one of the most important principles was to select indicators that accurately reflect the managerial capabilities of Capital Representatives while minimizing the influence of external factors such as market fluctuations, capital size, and industry-specific characteristics.
For example, within the financial pillar, rather than relying solely on absolute profit figures, the Group uses Return on Equity (ROE) as a key metric to measure capital efficiency. This approach provides a clearer assessment of management effectiveness and the ability to create value from the capital entrusted to the enterprise.
Similarly, in assessing operational performance, the Group has incorporated Total Factor Productivity (TFP) into the evaluation framework instead of relying solely on revenue or output growth rates. TFP measures the efficiency with which key resources, such as labor and capital, are utilized, thereby providing a more accurate assessment of the quality of a company’s growth.
In the market dimension, the evaluation framework also goes beyond revenue size and dives into indicators that reflect the quality of market development, including the share of revenue generated from key markets, customer mix, and the proportion of strategic customers. These metrics help assess an enterprise’s adaptability, its ability to sustain competitiveness, and its capacity to mitigate risks in a volatile market environment.
In addition, many of the indicators have been tailored to the specific characteristics of different business segments and incorporate adjustment factors or sector-specific indices for the Spinning and Garment industries, thereby ensuring comparability and fairness across the Group.
In essence, this year’s framework goes beyond evaluating outcomes alone; it focuses on assessing the quality of governance and the managerial capabilities that drive those outcomes.
What changes does the Group expect the new KPI framework to bring to the governance culture of its member enterprises after a period of implementation?
Our greatest expectation is to gradually foster a culture of proactive, transparent, and performance-oriented governance across our member enterprises.
More importantly, strategic development objectives must be clearly understood and embraced by Capital Representatives. In doing so, they will not only focus on achieving immediate business targets but also take a proactive role in building long-term growth drivers, including market development, digital transformation, human capital enhancement, and sustainable development.
Through the new KPI framework, the Group also aims to encourage member enterprises to transition from experience-based management to data-driven management, supported by clear and measurable performance indicators. As a result, strategic objectives can be translated into concrete actions, responsibilities can be assigned more clearly, and the overall quality of corporate management and decision-making can be progressively enhanced.
What should be the next step to ensure that the governance and evaluation of Capital Representatives truly become a strategic management tool for the Group?
In the coming period, the Group will continue to refine the governance framework for Capital Representatives at its member enterprises in a more modern, transparent manner and with closer alignment to the Group’s overall management and operational processes. Long-term development criteria will be established early and maintained consistently, enabling Capital Representatives to align with the Group’s strategic objectives and proactively incorporate them into their day-to-day management and long-term decision-making processes. At the same time, a set of supplementary indicators will be designed to reflect the specific characteristics of each year’s market conditions. In addition, the Group will introduce adjustment factors that consider the degree of managerial complexity faced by larger-scale enterprises.
A key priority will be to accelerate digital transformation and build a centralized management data system. By ensuring that production, business, financial, and governance data are continuously updated, the Group will be able to monitor the performance of Capital Representatives against their objectives in real time. This will enable timely support, early warnings, and necessary adjustments, rather than relying solely on year-end evaluations.
In addition, we want the evaluation results to go beyond the classification, recognition, and appointments. They should become a tool for driving continuous improvement. Issues identified through the evaluation process will be translated into governance recommendations and concrete action plans tailored to each enterprise, with effective support and close collaboration from the Group’s functional departments.
Thank you for the interview!
