Management of Senior-level employees: What should enterprises establish?

Senior-level employees – including General Director, Chief Executive Officer (CEO), Chief Financial Officer (CFO), Human Resources Director (HRD), or equivalent management positions – are not simply employees but are individuals empowered to manage a department or represent the enterprise or be in charge of crucial work groups. They possess strategic information, decision-making power, and directly influence the enterprise’s finances, human resources, and corporate culture. Therefore, the management of senior-level employees cannot be limited to standard labor contracts, but must be integrated into a strict internal legal document system to ensure three factors: correct empowerment, sufficient control, and comprehensive protection of enterprise interests.

1. Which documents does an enterprise need to establish for managing senior employees?

In this article, we will not discuss documents related to the field of human resources. We will only focus on legal documents aimed at helping the enterprise control risks that may arise when the relationship between the enterprise and its senior employees is no longer smooth or when it terminates upon expiration or by agreement. From the time the employment relationship is established until its termination, the parties typically establish the following documents: Labor contract, Non-Disclosure Agreement (NDA), Non-Compete and Conflict of Interest Agreement, Authorization Document, if the employee is assigned to represent the company in certain operational areas. In addition, general company management documents such as internal labor regulations, financial regulations, and procedures will also include provisions to focus on adjusting potential violations by management personnel. This serves as a preventive step against risks and a basis for management solutions.

1. Labor Contract with Management and Senior Personnel

Under current regulations, businesses can establish a probationary contract with management positions for a period of 180 days, instead of the previous 60-day limit. This provides the enterprise with sufficient time to thoroughly evaluate the competence of management positions. However, the enterprise’s governing document, specifically the Company Charter, must clearly define which titles are considered management positions, as this will serve as the basis for determining the probationary period. Beyond the probationary period, current labor law does not require establishing a labor contract with a minimum term of 12 months as previously mandated. These provisions are considered to give enterprises proactivity and flexibility in managing senior personnel. In addition to flexibility in term length, to manage risks during the employment relationship, enterprises should pay attention to several points in the labor contract: authority to establish the contract, job description recorded in detail in the contract or in an attached job description sheet, provisions on reporting mechanisms, risk control, and financial limits for each executive decision, clauses on contract termination, non-disclosure and non-compete agreement. If the enterprise has developed internal labor regulations or internal rules, the labor contract shall reference the provisions in these general documents.

2. Enterprise’s non-disclosure agreement

For senior employees, the risk of leakage of confidential information, trade secrets, customer data, or business strategy is significant. Therefore, in addition to the labor contract, the enterprise must have a separate NDA that is signed independently and remains effective even after contract termination. An effective NDA needs to cover: Scope of confidential information: Strategy, finance, customers, personnel, technical data, operating models, personal data, etc.; Confidentiality term: lasting for at least 24–36 months after the termination of the employment relationship; Mechanism for handling violations: Clearly specifying the level of compensation for damages and the right to demand remediation; Provisions on data ownership. In enterprises with FDI elements or those operating in technology, finance, logistics, legal sectors, etc., the NDA should be accompanied by an “Intellectual Property Transfer Agreement” to avoid later disputes over creative rights or management systems.

3. Internal labor regulations, procedures and internal rules

Even a meticulously drafted labor contract cannot cover all operating rules, control mechanisms, and internal conduct of the enterprise. This is particularly true for senior positions, where the authority, responsibility, and influence far exceed the scope of a standard labor contract.

In management practice, an enterprise can only effectively manage its senior management team when it has a system of internal rules, procedures, and regulations that is clearly designed, unified, and legally binding. These documents not only govern the employee’s behavior but also establish the mechanism of power and responsibility throughout the entire executive apparatus. They help the enterprise control both the “power to make decisions” and the “legal consequences” of each management action. Specifically:

• Internal Labor Regulations define the behavioral standards, ethical principles, and discipline that the executive must comply with;
• Internal Procedures describe the methods for decision-making, approval, signing, reporting, and control of executive operations, helping to prevent abuse of power or conflicts of authority among management levels;
• Internal Rules act as the “framework of power,” clearly defining the delegation mechanism, financial limits, HR processes, asset usage, and information security of the enterprise.

When these three elements are designed synchronously, the enterprise not only creates a transparent and disciplined operating environment but also protects the senior management team itself from the risk of exceeding authority or violating legal regulations.

4. Authorization document

Under the law, an authorized person may only perform tasks within the scope of the authorization. If they exceed the scope, the authorized person must bear personal responsibility, unless the enterprise was clearly aware of the excessive action. For management positions, the legal representative typically delegates the authority to decide on a specific set of tasks and to sign related documents. However, if this is recorded too generally, it can easily lead to the manager making decisions beyond the control of the representative. Therefore, the Authorization Document needs to clearly list each work item and the financial limit that the personnel is authorized to decide. Example: For personnel managing the finance – accounting department, the scope of authorization needs to clearly state the right to: sign contracts with specific groups of suppliers, approve costs, conduct bank transactions, and whether there are transaction limits, etc. The Authorization Document should be drafted as a separate document, signed and sealed by the enterprise, and ensure that the authorized person has received and clearly understood the content of the authorization.

Managing senior employees is not just about signing contracts and paying salaries, it requires a plan to govern risks that may arise both during and after the termination of the employment relationship. Disputes arising from employment contracts with management personnel often lead to losses in finance, reputation, data leakage, and negatively impact the team they manage. Therefore, an effective senior employee management system typically includes: Labor Contract, Non-Disclosure Agreement, Internal Labor Regulations, Accompanying Procedures and Rules, and Power of Attorney . These tools not only help the enterprise prevent the risk of abuse of power or misconduct but also create a culture of governance compliance – where all power is accompanied by clear control mechanisms and legal responsibility.

CDLAF accompanies enterprises in establishing a complete package of high-level labor management systems, from drafting contracts, regulations, and authorization mechanisms, to advising on operation and information security – helping the enterprise delegate power correctly, control sufficiently, and achieve sustainable development.

Time of writing: 28/10/2025

The article contains general information which is of reference value, in case you want to receive legal opinions on issues you need clarification on, please get in touch with our Lawyer  at  info@cdlaf.vn

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