The study aims at analyzing the effect of board independence on the financial performance of companies listed on the Vietnamese stock exchanges with the mediating role of market competition. The results of GMM showed that CEO duality is found to have a negative effect on the financial performance of listed firms. Meanwhile, the statistical evidence shows that the percentage of non-executive board members and market competition positively affect the financial performance. In addition, the evidence showed that market competition could reduce the positive influence of the percentage of non-executive board members on financial performance of listed companies. To improve the financial performance of listed firms have been proposed, some governance implications have been proposed such as limiting CEO duality, increasing the percentage of non-executive board members and empower the management board in a highly competitive market and choosing the appropriate size of the board.