CCorporate orp
Governance Good Corporate Governance Committee Report
a robust guideline that adheres to the highest
Thai Airways International Public Company
The Good Corporate Governance Committee
Limited has taken to heart the importance of ethics
also recognizes that fostering good corporate
as it sets the tone of leadership that emphasizes
governance principles ensures a company’s long-term
management transparency, equality and auditable.
stability and sustainability to the company. Emphasis
THAI’s business principles are defined by its ethical
has been put on providing knowledge, understanding
framework and constantly improved in view of
and benefits of such principles to employees of
economic and social changes as well as under the
all levels to enhance work effectiveness. The
Stock Exchange of Thailand and Thailand Institute
Company also supports various good corporate
of Directors (IOD) regulations.
governance activities promoting a corporate culture
The Company’s Board of Directors has assigned the Corporate Governance Committee to supervise,
international standard.
that fosters confidence, trust, respect and loyalty within the Company.
monitor, and review all corporate governance matters
Efforts to foster and maintain high ethical
as well as to consider trends and new developments
standards has earned the Company a rating of
as stipulated by the Asean CG Scorecard. Routine
“Excellent” for the second consecutive year from the
assessment is undertaken to determine changes
Thai Institute of Directors (IOD) for overall corporate
and improvements to be made to the Company’s
ethics. This reflects the mindset of the Company’s
good corporate governance principles to ensure
Board of Directors, management and staff in regards to upholding the highest standards of good corporate governance.
(Signed)
Pol.Gen. Adul Sangsingkeo (Pol.Gen. Adul Sangsingkeo) Chairman of the Good Corporate Governance Committee February 3, 2014
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Annual Report 2013
CORPORATE GOVERNANCE
Good Corporate Governance
Policies on Good Corporate Governance
Thai Airways International Public Company
THAI understands the importance of having
Limited is a large top ten state enterprise and the
good corporate governance and diligently observes
service rendered by the Company contributes of the
such principles in practice. The Company, therefore,
country’s economic vibrancy. As confidence in and
instills a culture of good corporate governance for
growth of a business entity are the crux of sustainable
Board members, senior management and employees
success, THAI believes that by observing the principles
to enhance THAI’s long-term competitiveness and
of good corporate governance and taking to heart its
sustainability.
corporate social responsibilities will serve to sustain
The Company’s Board of Directors requires that
THAI’s long-term success. These beliefs are also echoed
the Company have a strong set of good corporate
by both the Stock Exchange of Thailand (SET) and the
governance guidelines as management framework
Institute of Directors (IOD) in their guidelines for
encompassing 4 different aspects :
companies to observe.
To this end, the Company’s Board of Directors’
Policy Framework on Good Corporate Governance.
directive is to ensure that the Company has a clear
business structure with clear management processes,
run business under good corporate governance by
a robust monitoring system and a strong internal
referring to international practices, From this Policy
audit process. As investors are attuned to a company’s
the Board has formulated a framework on good
financial performance as the reason for investing in
corporate governance focusing at 4 areas as follows;
a company’s equity shares, THAI’s investment in its
Government Sector, Society and Community
information technology platform beginning with the
z Promoting
human resource management system and the SAP
environmental awareness as regards to the impact
system launched for the Finance and Accounting
resulting from the Company’s business activities.
Department have been geared towards improving the
Policy from THAI’s Board of Directors is to
environmental conservation and
z Stimulate,
support and re-emphasize
information reporting period to enable management
awareness of each and every employee in regards
to make decisions more quickly. Quicker decision
to their duties and responsibilities towards society,
making enhances competitiveness and ultimately
the environment and communities.
provides greater benefits to the Company’s customers, shareholders and other stakeholders.
responsibili-
ties towards the environment, society and
For THAI’s efforts in embracing principles of good corporate governance, THAI was awarded and recognized by independent entities including a “very good” rating received consecutively since 2006 and an “excellent” rating for 2012.
z Management with awareness of
communities as per all relevant laws and regulation.
Customers and Stakeholders z Emphasize
providing excellent service to
customers and stakeholders, meeting their needs. z Enable
customers and stakeholders to lodge
comments through various channels. z Promote
and encourage technological
enhancements to improve service standard and facilitate customer convenience.
Thai Airways International Public Company Limited
73
CORPORATE GOVERNANCE
z Enhance
service standards with customer
z Encourage
and support knowledge,
satisfaction as the desired outcome and taking
information sharing and learning to improve
responsibility for bad service or not being able to
overall operating standard.
meet the agreed to standard of service. z Ensure
fair and level competition along with
providing equitable service for all.
Organization
z Respect
employees’ personal privacy and
rights by ensuring non-disclosure of employees’ personal information. z Monitor
and ensure performance and
measures to manage and prevent
execution of tasks with integrity and transparency.
conflicts of interest while also regularly reviewing the
Conflict of interest must be avoided while maximizing
adequacy of these measures on a regular basis.
the Company’s benefits.
z Create
z Promote,
cultivate and stimulate the
z Provide
fair and equitable treatment of
awareness risks resulting from unethical practices
all employees and provide a channel for which
and instilling such awareness into the Company’s
complaints can be lodged against unfair treatment.
culture, emphasizing consequences of not complying
THAI’s Principles of Good Corporate Governance
with moral, ethical and good governance principles. z Develop
preventive mechanisms and
Creation of Long Term Value: The Company
procedures in handling unanticipated incidents
must promote and instill such vision and the
where the public is adversely affected by the
realization of the importance in increasing
Company’s products and/or services and for cases
competitiveness in all aspects of operations
where there is anticipation for potential adverse
including setting up appropriate committees to
impact on the general public as a result of the
ensure abidance with Good Corporate Governance
Company’s products and/or services.
guidelines. Management must comply with
z Being
mindful regarding the integrity of
transparency and fairness guidelines in regards
information being disclosed to the general public
to nominations, appointments, transfers and
through development of a comprehensive information
consideration for promotions.
database and ensuring availability of the latest
Transparency: Ensure that there is sufficient disclosure of significant financial, operational and
information. z Promote
and establish a risk management
other relevant information related to the Company’s
system to ensure operating efficiency and effectiveness,
past operations for the relevant time period.
ensuring accuracy of reports and abiding with all
Information disclosure must be made via channels
relevant internal control guidelines.
that are most readily accessible by persons who have
Employees
relevant need to access such information. Further
z Emphasize, support and promote development
facilitating information disclosure and dissemination
of human resource, organizational loyalty and ensure
is through the establishment of the Public Relations
a clear succession plan.
and the Investors Relations Department. Employees
z Ensure
a pleasant working environment to
must perform their duties with integrity, must not
motivate employees and provide employees with
take actions to benefit their own interests and must
the necessary skills and competencies to enhance
avoid conflicts of interest. An employee may not
the Company’s overall operating efficiency.
undertake a post as a director, advisor or any other
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Annual Report 2013
CORPORATE GOVERNANCE
position at another Company that could cause a
complaints against illegal acts or violation of the
conflict of interest. The acceptance of property or any
Company’s regulations and to take necessary action
other benefits by any employee must conform to the
within the appropriate time.
guidelines specified by the National Anti-Corruption
Stakeholders’ Rights
Commission. Responsibilities: Employees must devote
THAI operates its business with integrity,
themselves in performing their duties with knowledge
transparency and ethics emphasizing adherence
and experience to the best of their ability by placing
to good corporate governance principles as well
importance on being responsiveness to the needs of
as international best practice with the focus of
shareholders, customers, business partners and fellow
being transparent, enhancing effectiveness and
employees. Use careful discretion in performing their
building shareholder and customer confidence and
duties with honesty and fairness. Employees must not
satisfaction. Further focus is placed on building
engage in any action or activity which conflicts with
shareholder value and enhancing benefits to
the Company’s interest nor take the opportunity, nor
stakeholders while ensuring equitable treatment.
use information received as a result of being an
THAI, in its role as the national carrier, has
employee of the Company to seek benefits for
conducted its business guided by the conscience
themselves or others. It is the duty of management
of corporate social responsibility (CSR) reflecting
to promote and instill the highest sense of
international environmental standards minimizing
responsibility in executing tasks and achieving
pollution and waste resulting from undertaking
the Company’s objectives.
business activities. To be compliant with the
Accountability: Employees must attentively
Constitution of the Kingdom of Thailand B.E. 2550,
perform their duties to the best of their ability and
the Company’s Good Corporate Governance and
must exercise due care in the manner of a person
Ethics Code were drafted, printed and distributed
having knowledge and experience including being
to Company executives and employees reflecting
ready to take responsibility for the outcome of their
the following guidelines:
actions and are able to explain their decisions
Country
and actions to the Company’s Board of Directors,
THAI operates its business based on transparency
immediate supervisor, shareholders, customers,
and accountability focusing on sustainable growth
business partners and the Company ’s other
and maximizing benefit to the country.
Society and the General Public
stakeholders. Equitable Treatment: Employees are expected
THAI is aware of its CSR role and emphasizes
to perform their duties with fairness by providing
conservation of natural resource, environment and
equal and non-discriminant treatment of stakeholders
has the interest of the general public at heart. THAI is
based on their race, nationality, religion, sex or other
supportive of activities that benefits communities or
unfair reasons. Treatment of business competitors
society.
must be in-line with internationally accepted
Shareholders
standards under the scope of relevant laws, not
THAI shall operate its business to generate
infringing on proprietary information and not to
satisfactory return for Shareholders and ensure
fraudulently obtain competitors’ trade secrets. A
equitable treatment of all shareholders.
channel must be provided for employees to lodge
Thai Airways International Public Company Limited
75
CORPORATE GOVERNANCE
Customers
therefore, has worked collectively with the stakeholders
THAI shall render quality services, emphasize
in considering the Company’s useful core identity
customer safety and convenience and shall seek means
and value and creating practical visions. The Board
to better meet customer needs building on confidence
also ensures that all activities undertaken by the
towards THAI and enhancing customer satisfaction.
Company are in compliance with all legal and
Business Partners, Creditors and Debtors
regulatory guidelines to maximize efficiency and
THAI will undertake to build confidence for
effectiveness for the Company.
Business Morals
Business Partners, Creditors and Debtors that they will
Business morals are considered to be
be equally and fairly treated based upon business
contributing factors to the Company’s success through
relationship that is fair for both parties. THAI shall
recognition and credibility enhancement which is a
also avoid any situation which may cause a conflict of
competitive edge that has enabled the Company to
interest.
be successful. Corporate Social Responsibility is
The Employees
integrated into THAI’s overall business and strategy
THAI provides fair treatment of all its employees
where good corporate governance and ethics form
and chooses qualified candidates for positions based
part of THAI’s values guiding daily operations of the
on clear guidelines and the selection process is
Company. Each employee is guided by the Company’s
undertaken transparently. Ongoing knowledge
Good Corporate Governance and Ethics Code along
de velopment forms part of the Company ’s
with a number of rules, regulations and guidelines
human resource development strategy in creating
announced by the Company. The goal is to earn
opportunities for individual growth.
respect and give confidence to stakeholders regarding THAI’s sound approach to management.
Leadership and Vision Leadership is extremely important in managing a successful organization under competition.
THAI’s Ethical Principles: Ethics z To
adhere to the democratic regime by
The quality of a good leader is the ability to build
supporting and adhering to the democratic regime of
credibility and trust within and without the company.
which the King is the Head of State
The leader’s fine vision should not only be realistic
z To
uphold the Company’s interest - perform
and consistent with the core value of the organization
tasks to maximize Company’s benefit and not seek
but also challenging. While mission statements are
personal benefits and not having conflicts of interest
used to guide the organization in its day-to-day operations and lead the organization to sustainably success, focusing on maximizing customer,
z To
uphold honesty - corruption is not to be
tolerated in performing one’s duties z To
uphold righteousness - no wrong doing
shareholder, stakeholder and employee benefits.
shall be tolerated while executing one’s duties and
The leader also needs to communicate with the
responsibilities
stakeholders relating to their benefits. The visions of the Company’s Board of Directors have been constantly evolved in order to provide a sense of direction in the long term. The Boards,
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Annual Report 2013
z To
uphold transparency - not distorting facts
and information given to colleagues, the general public, shareholders and other stakeholders
CORPORATE GOVERNANCE
Balance of Power by Non-Executive Directors
Corporate Governance Committee, the criteria of
Prior to Board members being approved by the
assessment and improve the overall effectiveness of
AGM, candidates were screened by the Nomination,
the Board of Directors. The evaluation process consists
Remuneration and Human Resource Development
of a self-assessment section, a cross evaluation
Committee and then reviewed by the Company’s
section and a full Board evaluation. Results from
Board of Directors as per the Company’s guidelines.
the evaluation are reflected upon the Board of
The Company’s Board of Directors is made up of at
Directors to develop programs geared towards
least 5 persons but not more than 15. As of December
enhancing Board Members’ knowledge and
31, 2013, the Company’s Board of Directors consisted
capability in executing their tasks.
evaluation is modified regularly to enable better
THAI has appointed a committee to evaluate
of 15 persons. z 14
Non-Executive Board members
the performance of the President. The Committee
z 11
Independent Directors
is comprised of members of the Board and
z 1
representatives from management and the
Executive Director
Of the 15 Board members, 93.33% are
Committee is also charged with the responsibility of
Non-Executive Directors and 73.33% are Independent
evaluating the President’s performance twice a year.
Directors, which is considered to be sufficient to have a built-in check and balance system. With
Combination and Segregation of Positions
the current composition of Board members,
The Chairman of the Board of Directors
stakeholders can be assured that shareholders’
does not hold a management position but is an
interests are upheld with an adequate check and
Independent Director and is not the same person
balance system.
holding the position of Company President. The
The Company’s Board of Directors has the
Chairman of the Board has no relations to other
responsibility of ensuring that the Company abides
members of the Board or members of Management.
by all relevant rules and regulations, resolutions
There is a clear written differentiation between
reached at the AGM. Board members are expected
the responsibilities and roles of the Company’s Board
to execute their tasks and responsibilities honestly
of Directors and that of the Company’s Management.
with due care and upholding the Company’s interests. by the Company’s regulations requiring that at
Remuneration for Directors and Management
least one third of the existing Board members retire
The Company’s Board of Directors appointed
Each Board member has a fixed tenure as stipulated
the Nomination, Remuneration and Human
based on the length of tenure at each AGM.
Resource Development Committee whose task is to
Evaluation of Board Members and Evaluating the Performance of the President
determine the appropriate level of remuneration
As a tool to monitor the performance of the
sub-committees and the Company’s management.
Board of Directors, the annual evaluation of the
This also includes setting remuneration for
Board of Directors reflects Good Corporate Governance
non-company personnel hired to execute tasks for
guidelines. Approved by the Company ’s Good
the Company. The remuneration guidelines are
for members of the Board, member of various
Thai Airways International Public Company Limited
77
CORPORATE GOVERNANCE
clear and transparent while being attractive to
responsible for putting in place a strong and effective
retain qualified Board members and is benchmarked
risk management and internal control process.
against other companies in the industry.
An Internal Audit Committee was appointed to ensure
Board members who took on additional
comprehensive and transparent disclosure of financial
responsibility were given an appropriate level of
information and ensure that the Company has a
extra remuneration. As for Board members who
robust internal control process that is in abidance
are also a part of management and the management
with generally accepted accounting standards.
of the Company, remuneration is linked to the
Both the Board of Directors and the Audit Committee
Company ’s financial performance and in part
have provided summary statements regarding
linked to individual performance. To comply with
their respective areas of concern in the annual report.
the Ministry of Finance’s good corporate governance accepted guidelines, remuneration for Board members
Personal Development for Directors and Senior Executives
must comply with the amount approved at the AGM.
There has been enhanced interest by
For the year 2013, remuneration for Board Members
stakeholders, investors, shareholders, government
and Management Executives has been disclosed in
units and listed companies themselves in the role
the Board and Management Executive Remuneration
in which directors of publicly listed companies are
section.
playing to champion good corporate governance.
Sub-Committees
With the ever increasing important role that
principles and that of the SET including internationally
The Company’s Board of Directors appointed
members of the Board are taking on, stakeholders
knowledgeable and experienced Board members
are no longer satisfied with just a summary report
to various sub-committees to assist in analyzing
but are expecting the Board of Directors to
and screening of important issues that may require
successfully steer and guide the Company towards
close monitoring in the various areas of operations.
sustainable growth. Growth in itself is a function
The various sub-committees are expected to provide
of employed capital where the mix consists of 2
thoughts, comments and recommendations to
portions, internally generated capital and that which
the Board of Directors for consideration and decision
has been obtained from investors or creditors. It is
making. The various sub-committees as defined by
therefore an important role for the Board of Directors
the principles of Good Corporate Governance, the
to look after the interests of institutional and retail
Company assigned these sub-committees to be
shareholders and to provide such shareholders with
responsible for various areas. Information on the
the highest rate of return. With the role of Board
sub-committees has been detailed in the Board
members becoming increasingly important, it is the
of Directors and Sub-Committees Section.
Company’s policy to regularly enhance knowledge and skills of Board Members and management alike so as
Board of Directors’ Report
to ensure that Board Members are able to better
The Board of Directors is responsible for
execute their role as a member of the Board. It is
preparing a summary of the Company’s performance
also important for senior management to undergo
and to discuss issues that impacted the Company’s
the same training so as to ensure that they are able
operations during the year. The Board is also
to better represent the Company in the capacity
78
Annual Report 2013
CORPORATE GOVERNANCE
of a Board Member of a subsidiary, an associated or
z The
Role of the Chairman Program (RCP)
an affiliate company of THAI. To meet the growing
z The
Finance for Non-Finance Director (FN)
challenges, the Board of Directors mandated that
z The
Board Members, Executive Management and the
Understanding the Fundamental of
Financial Statements (UFS)
Corporate Secretary register as members of the Thai
z The
Financial Statements for Directors (FN)
Institute of Directors Association (IOD), amongst
z The
Executive Director Course (EDC)
other institutions. The benefit of such membership
z The financial Institution Governance Program
is the wealth of knowledge that can be obtained to
(FGP)
expand knowledge and sharpen skills by attending the various courses and seminars provided by IOD,
Board and Executive Management Training
The Securities Exchange of Thailand, The Office of the
The Company’s Board of Directors along
Securities and Exchange Commission (SEC) and The
with the Company ’s Executive Management
Association of Publicly Listed Companies. The Board
recognizes the importance of regularly participating
of Directors has attended the following courses
in seminars on issues related to ongoing knowledge
organized by the IOD:
development in regards to executing duties of a
z The
Director Accreditation Program (DAP)
Board Member. As of December 31, 2012, the
z The
Director Certification Program (DCP)
Company ’s Board of Directors along with the
z The
DCP Refresher Course (Re-DCP)
Company’s Executive Management have attended
z The
Audit Committee Program (ACP)
the following training/seminars provided by the IOD:
Thai Airways International Public Company Limited
79
CORPORATE GOVERNANCE
Board of Directors Mr. Ampon Kittiampon Mr. Areepong Bhoocha-oom
Mr. Kanit Sangsubhan
Position Chairman and Independent Director Vice Chairman, Independent Director Independent Director
ACM Satitpong Sukvimol Independent Director Mr. Weerawong Chittmittrapap Independent Director Member of the Audit Committee
Course Attended z Director Certification Program (DCP 80/2006) z Director Certification Program (DCP 3/2000) z DCP Refresher Course (Re DCP 2/2009) z Director Accreditation Program (DAP 21/2004) z Director Certification Program (DCP 0/2000) z The Executive Director Course (EDC 1/2012) z Director Accreditation Program (DAP 26/2004) z Director Accreditation Program (DAP 54/2006) z Audit Committee Program (ACP 38/2012) z Director Certification Program (DCP 49/2004) z Role of the Chairman Program (RCP 11/2005) z Director Certification Program (DCP 118/2009) z Financial Institutions Governance Program (FGP7/2003) z Director Accreditation Program (DAP 63/2007)
Mr. Dheerasak Suwannayos
Director
ACM M.L. Suprija Kamalasana
Independent Director
Mr. Chutinant Bhirom Bhakdi
Independent Director Member of the Audit Committee
ACM Prajin Juntong Pol.Gen. Adul Sangsingkeo
Independent Director Independent Director
Mr. Sutham Siritipsakorn
Independent Director
Mr. Pongpanu Svetarundra
Director
z Director
Mr. Somchai Siriwatanachoke
Director
z Director
Mr. Athapol Yaisawang
Chairman of the Audit Committee Independent Director
Mr. Sorajak Kasemsuvan
Director President
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Annual Report 2013
Certification Program (DCP 17/2002) z Financial Statements for Director (FSD 2/2008) z Role of Chairman Program (RCP 21/2009) z Financial Institutions Governance Program (FGP7/2003) Certification Program (DCP 146/2011) z Financial Statements for Director (FSD 12/2011) z Director
Accreditation Program (DAP 22/2004) z Director Certification Program (DCP 157/2012)
CORPORATE GOVERNANCE
Sub-Committee
13. Pol.Gen. Adul
Sangsingkeo
Independent Director
Board of Directors The Board of Director s has ultimate responsibility for the administration of The Company’s affairs. The Company ’s Articles of Association
14. Mr. Athapol
Yaisawang
Independent Director and Chairman of Audit Committee
provides for a Board of Directors of between 5 and 15
15. Mr. Sorajak
persons whose appointment is approved at the
Director
annual general meeting of shareholders. The
Mrs. Suvimol Bualerd (Vice President, Cor-
requirement is also that no less than half of the
Kasemsuvan
porate Secretariat Department) as Secretary
Directors must reside in Thailand. At the Company’s
Authorized Directors
annual general meeting of shareholders, one-third of
Signatures of Mr. Ampon Kittiampon, Chairman
the Directors are required to retire, and new Directors
and either of Mr. Kanit Sangsubhan or Mr. Sorajak
will be elected. Directors that are required to retire
Kasemsuvan along with a Company seal constitutes a
may be re-elected.
binding contract.
As of December 31, 2013 the Company’s Board
Audit Committee
of Directors consists of the following members: 1. Mr. Ampon
To ensure abidance with policies on good
Kittiampon
corporate governance as stipulated by the Ministry of
Chairman and Independent Director 2. Mr. Areepong
Finance and the Stock Exchange of Thailand, to
Bhoocha-oom
Vice Chairman and Independent Director 3. Mr. Kanit
the Company’s Board of Directors appointed the
Sangsubhan
Audit Committee. As of December 31, 2013 the
Independent Director 4. Mr. Chutinant
Audit Committee consisting of non-executive Board
Bhirom Bhakdi
Independent Director and Audit Committee 5. Mr. Dheerasak
2. Mr. Chutinant
Juntong
in reviewing reliability of Financial Statements)
Svetarundra
3. Mr. Weerawong Chittmittrapap Member
8. Mr. Weerawong Chittmittrapap Independent Director and Audit Committee 9. ACM Satitpong Sukvimol Independent Director Siriwatanachoke
Mrs. Keseree
Siritipsakorn
Independent Director
Narongdej
Advisors to the Audit Committee Ms. Raweepon Kuhiran Advisors to the Audit Committee Mrs. Nantana
Director 11. Mr. Sutham
Bhirom Bhakdi
Member (who has knowledge and experience
Director
10. Mr. Somchai
Yaisawang
Chairman
Independent Director 7. Mr. Pongpanu
members: 1. Mr. Athapol
Suwannayos
Director 6. ACM Prajin
increase shareholder and investor confidence,
Sangkavichitr
(Vice President, Office of the Internal Audit) Secretary
12. ACM M.L. Suprija Kamalasana Independent Director
Thai Airways International Public Company Limited
81
CORPORATE GOVERNANCE
The members of our Audit Committee must
meet with the Company’s financial auditor at least
meet the following requirements of the Thai Capital
once a year without the presence of the Company’s
Market Supervisory Board, which include:
management
1. Members must be independent directors
5. Review all transactions determined to be
with qualifications as defined by the Capital Market
related party transactions or have conflicts of interest
Supervisory Board.
and ensuring adherence to all legal guidelines and
2. Members may not be directors authorized
regulations that of the Stock Exchange of Thailand
by THAI’s Board of Directors to make any decisions in
and determine appropriateness of such transactions
the business operations of a parent company, its
and ensuring that such transactions are in the best
subsidiary company or a subsidiary at the same
interest of the Company
level as our Company, or its majority shareholders or controlling persons.
6. Prepare an Audit Committee statement, as per the guidelines of the Stock Exchange of Thailand,
3. Members may not be directors of a parent
to be included in the Company’s annual report
company, its subsidiary company or a subsidiary
and must be signed by the Chairman of the Audit
of the same level
Committee
4. Members must have sufficient knowledge
7. Undertake other activities that may be
and experience to perform their duties as Audit
prescribed by the Company’s Board of Directors
Committee members.
within the scope of the Audit Committee’s function
Audit Committee’s Authority and Responsibilities
regarding transaction or actions taken which may bear
1. The Audit Committee reviews the Company’s
significant impact on the Company’s financial
financial statements and ensures sufficient and
stability and financial performance, the Audit
correct disclosure of financial information
Committee must report such findings and/or query to
8. Upon finding or have any questions
2. Ensures the adequacy and effectiveness of
the Company’s Board of Directors for immediate
internal control measures and internal audit
corrective action within the time period as stipulated
processes while also ensures the independence of the
by the Audit Committee. These include:
Internal Audit Department. The Committee’s responsibility is also to provide consent on the appointment, transfer of or the dismissal of the head of the Internal Audit Department
(1) Transactions that are flagged as having conflicts of interest (2) Corruption or something out of the ordinary or any fault or loophole in the internal audit process
3. Ensuring the Company adheres to all Stock
(3) Breaking rules or guidelines set by the
Exchange of Thailand rules and regulations and
Stock Exchange of Thailand or any legal guidelines
all other related legal guidelines to the Company’s
governing the Company’s business
business 4. Consider, screen and submit for approval
Good Corporate Governance Committee
qualified independent persons to undertake the
To ensure integrity of the Company’s operations
function of the Company’s financial auditor along
with respect to the principles of good corporate
with submitting for approval the applicable auditor’s
governance as stipulated by both the Ministry of
fees. It is also required that the Audit Committee
Finance and the Stock Exchange of Thailand and is in
82
Annual Report 2013
CORPORATE GOVERNANCE
line with international best practices, the Company’s Board of Directors appointed the Good Corporate
5. Other undertakings as may be designated by the Board of Directors
Governance Committee. As of December 31, 2013 the Good Corporate Governance Committee consist of: 1. Pol.Gen. Adul
Sangsingkeo
To ensure that THAI adheres to the principles
Chairman
of good corporate governance as stipulated by the
2. ACM Satitpong Sukvimol
Securities and Exchange Commission (SEC), similar
Member 3. Mr. Dheerasak
guidelines of the State Enterprise Policy Office (SEPO) Suwannayos
and that of the Institute of Directors (IOD), the Board of Directors appointed the Independent Diretors. As
Member
of December 31, 2013 the Independent Consist of:
4. Mr. Weerawong Chittmittrapap
1. Mr. Ampon
Member 5. Mr. Somchai
Independent Directors
Kittiampon
Independent Director
Siriwatanachoke
2. Mr. Areepong
Member
Bhoocha-oom
Independent Director
6. President Member
3. Mr. Kanit
7. Executive Vice President, Human Resources and Compliance
Independent Director 4. Mr. Weerawong
Member and Secretary
Sangsubhan Chittmittrapap
Independent Director
8. Vice President, Legal and Compliance Department
5. ACM Satitpong
sukvimol
Independent Director
Assistant Secretary
6. Mr. Chutinant
Good Corporate Governance Committee’s Authority and Responsibilities 1. Review corporate governance procedures and making recommendations to the Board of Directors with the goal of establishing good corporate governance according to the principles set forth by
Bhirom Bhakdi
Independent Director 7. ACM M.L. Suprija
Kamalasana
Independent Director 8. Mr. Sutham
Siritipsakorm
Independent Director 9. Pol.gen. Adul
Sangsingkeo
Independent Director
the MoF and the SET 2. Review adherence and observance of good
10. ACM Prajin
Juntong
Independent Director
corporate governance guidelines 3. Coordinate with the Company’s Board of Directors and related sub-committees as deemed
11. Mr. Athapol
Yaisawang
Independent Director
appropriate employees or other related persons to provide a
Independent Directors’ Authority and Responsibilities
statement and/or view point including the authority
1. Freely provide comments/suggestions
to request documents or other necessary items
and/or provide progress reports on undertakings as
to assist in decision making
assigned by the Board of Directors to ensure that
4. Has the authority to question management,
Thai Airways International Public Company Limited
83
CORPORATE GOVERNANCE
Exchange of Thailand’s guidelines and guidelines
Nomination, Remuneration and Human Resource Development Committee’s Authority and Responsibilities
for which the Company is evaluated annually
1. The Committee is charged with the
the Company has corporate governance which complies with the Ministry of Finance and the Stock
including international best practices.
obligation to draft a selection and appointment
2. The Committee has the authority to obtain
process for the Company’s Board Members along
documents and summon relevant persons to provide
with the Company ’s senior management and
information in regards to assigned task(s) and other
strategy to develop the Company’s human resource.
matters as assigned by the Board of Directors.
Such process must be ethical and comply with
3. Other matters as assigned by the Board of Directors
the good corporate governance principles as stipulated by the Ministry of Finance and the Stock
The duty of this Committee is to provide
Exchange of Thailand and conforms to international
independent thoughts and comments and to also
best practices. The latest approach to human resource
ensure equal benefits for all shareholders.
management is needed to be able to screen and select the most qualified persons to sit on the
Nomination, Remuneration and Human Resource Development Committee
Company’s Board of Directors and senior management
Following the good corporate governance
and auditable while all candidates are to be treated
principles of both the Ministry of Finance and that
posts. The selection process must be fair, transparent equally.
of the Stock Exchange of Thailand and in observance
2. The Committee is also responsible
of international best practice, the Company’s Board
for det ermi ni ng t he appropri at e l e vel of
of Directors appointed Nomination, Remuneration
compensation for members of the Board of Directors,
and Human Resource Development Committee.
Sub-Committees, the Company’s management and
As of December 31, 2013 the Nomination,
outsiders who have been commissioned to perform
Remuneration and Human Resource Development
tasks on the Company’s behalf. The compensation
Committee consists of :
scheme should be comparable to companies
1. Mr. Areepong
Bhoocha-oom
Chairman 2. ACM Satitpong
and retain persons possessing desired qualities. Sukvimol
Vice Chairman 3. Mr. Kanit
Sangsubhan
compensate for their extra effort and commitment. For members of the Board with management
Siritipsakorn
Member 5. President Member 6. Executive Vice President
responsibilities and that of the Company’s senior management, compensation is tied to the Company’s overall performance and each individual’s effort and contribution. Such guidelines reflect the Company’s efforts in fulfilling the good corporate
Human Resource and General Management
governance guidelines stipulated by both the Ministry
Department
of Finance and the Stock Exchange of Thailand while
Secretary
84
Board members who have been assigned additional tasks and responsibilities should also appropriately
Member 4. Mr. Sutham
within the industry but must be sufficient to attract
Annual Report 2013
CORPORATE GOVERNANCE
observing international best practices.
5. Executive Vice President,
3. The Committee has the authority to obtain documents and summon relevant persons to provide information in regards to assigned task(s).
Commerce Department Member 6. Executive Vice President
4. Execute other matters as assigned by the Board of Directors.
Corporate Finance and Accounting Department
5. The Committee is charged with the authority to review the appropriateness of each
Member 7. Executive Vice President
position within the Company, responsibilities
Business Strategy and Development
assigned to each position especially for senior
Department
management level positions.
Secretary
6. Conduct the selection process of suitable
Mr. Pichai Chunhavajira, Expert on fuel hedging
persons to be members of the Board of Directors and
as Chairman of the Risk Management Working Group
Executive Vice President level positions and submit such candidates to the Board of Directors to be
Risk Management Committee ’s Authority and Responsibilities
appointed, promoted or rotated prospective
1. Provide consultation and advice on all
candidates for our Board of Directors and senior management.
Company’s risk management 2. Supervise the implementation of risk management, follow up on risk identification and risk
Risk Management Committee
assessment, including assess of adequate essential risk
To ensure that the Company has a robust risk
management
management system that not only conforms to
3. Formulate policies on suitable cash
the Stock Exchange of Thailand’s good corporate
management such as identify investment
governance guidelines but also guidelines
budget, investment period, ratios, conditions, return
established to assess the Company ’s annual
policy and acceptable investment risk
performance and meeting international standards, the Risk Management Committee was established
4. Consider request on setting up of private fund and procurement of private fund manager
to ensure adherence to the stipulated guidelines.
5. Consider guidelines on following up and
As of December 31, 2013 the Risk Management
assessment of return on investment in order to control
Committee consists of:
possible risk
1. Mr. Dheerasak
Suwannayos
Chairman 2. ACM Prajin
exchange risk in accordance with revenue, cost and Juntong
Member 3. Mr. Pongpanu Member 4. President Member
6. Consider guidelines and policies on foreign debt structure, including accounting standards that impact the Company’s current and future budgeting
Svetarundra
7. Has the authority to summon relevant persons and documents to clarify matters under consideration. 8. Execute other matters as assigned by the Board of Directors.
Thai Airways International Public Company Limited
85
CORPORATE GOVERNANCE
Corporate Social Responsibility Committee (CSR)
passengers, stakeholders and employees in such
To ensure ongoing adherence to the Company’s
3. Host activities to raise awareness and
CSR guidelines to enhance the Company’s social value
re-emphasize concerns for environmental conservation
through regular CSR communication, the Company’s
and the society. Consider and approve activities and
Board of Directors appointed CSR Committee. As
projects to be sponsored by the Company in relation
of December 31, 2013 to the Corporate Social
to environmental conservation.
Responsibility Committee consists of : 1. Mr. Somchai
Siriwattanachoke
2. Mr. Weerawong Chittmittrapap
Company ’s CSR activities and to prepare CSR regular basis. 5. To approve the Company’s CSR budget
Member Bhirom Bhakdi
including donations, sponsorships for air tickets and other activities along with budget control.
Member 4. Pol. Gen. Adul
4. Ensure regular communication of the Report to be released to the general public on a
Chairman
3. Mr. Chutinant
activities.
Sangsingkeo
Member 5. President Member
6. To review and approve all proposals to use the CSR budget. 7. Other undertakings as may be designated by the Board of Directors.
6. Senior Vice President, Strategy and Business Development Member 7. Executive Vice President, Commercial Member 8. Executive Vice President, Human Resources
The Executive Board The Executive Board consisting of the persons below were appointed and given the responsibility to ensure that the Company is run with maximum efficiency and to be able to meet the challenges of a
and Compliance
dynamic operating environment while ensuring
Member
maximum benefit to the Company. As of December
9. Vice President, Corporate Communications Member and Secretary Along with Mr. Ampon Kittiampon as Advisor to the Committee
CSR Committee’s Authority and Responsibilities 1. Specify policies and establish clear
31, 2013 the Executive Board consists of: 1. Mr. Kanit Chairman 2. Mr. Areepong 3. Mr. Dheerasak
commitment by employees to the Company ’s
Member
2. Sponsoring activities and projects under the “Travel Green” concept involving shareholders,
86
Annual Report 2013
Suwannayos
Member 4. Mr. Sutham
the “Green Innovation” concept.
Bhoocha-oom
Member
guidelines for CSR to enable adherence and commitment to environment conservation under
Sangsubhan
Siritipsakorn
5. ACM M.L. Suprija Kamalasana Member 6. Mr. Sorajak Member
Kasemsuvan
CORPORATE GOVERNANCE
Mrs. Suvimol Bualerd (Vice President, Corporate Secretariat Department) as Secretary
meeting shall vote amongst themselves for a member of the Executive Board to act as Chairperson.
The Executive Board’s Authority and Responsibilities
Board determines a resolution with each member
1. Oversee the various aspects of the Company’s
of the Board having one vote. Board Members that
operations to ensure abidance with corporate policies,
may have conflicts of interest on a particular issue
corporate plans and that of the Company’s Board
must leave the room during discussion and does
of Directors
not have the right to vote on the particular issue.
2. Screen issues to be submitted for Board of Directors’ consideration
A majority vote by Members of the Executive
Should there be a tie in the votes the Chairperson will have a second vote to break the tie.
3. Provide suggestions in regards to approach and measures to improve the Company’s operating
Legal Committee To ensure that legal issues including issues
effectiveness and efficiency 4. Approve procurement value not exceeding
related to rules, guidelines and regulations are
THB 800 million as per the Company’s procurement
handled correctly and efficiently, the Board of
policy
Directors appoint the following persons to the Legal 5. Has the authority to approve non-budgeted
investments of more than THB 50 million and less than THB 100 million and must report such
Committee charged with overseeing the above issues: 1. Mr. Chulasingh Vasantasingh Chairman 2. Mr. Weerawong Chittmittrapap
authorizations to the Board of Directors 6. Has the authority to summon relevant staff and documents to clarify matters under
Member 3. Mr. Sorajak
Kasemsuvan
Member
consideration 7. Has the authority to appoint sub-committees
4. Mr. Achporn
Charuchinda
Member
and working groups as deemed appropriate 8. Execute other matters as assigned by the
5. Mr. Sarawut
Benjakul
Member
Board of Directors In case of necessity, the Executive Board may propose for the Board of Directors to approve hiring of consultants to perform tasks on the
6. Mr. Kemchai Member 7. Mr. Amornsuk
Company’s behalf. At each meeting of the Executive
Member
Board, at least half of the members must be present
8. Mr. Somkiat
in order to constitute a quorum. The Chairman is
Member
the Chairperson of the meeting and if the Chairman
Chutiwong
9. Mr. Niruj
is unable to attend the meeting or is unable to execute
Member
his duties, the Chairman is to appoint another Board
10. Mr. Bumpen
member to act as the Chairperson on his/her behalf.
Secretary
Noparumpa Chayasriwong Maneepun Suppasri
In case that the Chairman is not able to appoint
Note : Mr. Chulasingh Vasantasingh has resigned
another Board member to act as Chairperson,
from his position of chairman of the Legal Committee
members of the Executive Board present at the
since November 18, 2013.
Thai Airways International Public Company Limited
87
CORPORATE GOVERNANCE
Legal Committee’s Authority and Responsibilities
appointed members of the Board to be member of
1. To review legal issues including rules,
other committee namely, THAI President ’s
guidelines and regulations as instructed by the Board
Pe r fo r m a n c e E v a l u at i o n C o m m i t t e e , C a s h
of Directors, Board Member and the President, or the
Management and Foreign Exchange Risk Management
Executive Vice President of Human Resources and
Committee, Human Resource and Organization
Compliance deems necessary before such issue is
Steering Committee, Revenue Enhancement and Cost
to be submitted for consideration by the Board of
Control Committee, Steering Committee for
Directors.
Maintenance and Operations, Litigation Committee,
Furthermore, the Board of Directors has
2. To determine action guideline for which the
Labor Relations Committee, Fuel Price Risk
Company is to take in regards to the charges related
Management Sub-Committee, Establishment of Thai
to the infringement of Antitrust Law or Competition
Smile as a Subsidiary steering Sub-Committee.
Law in each region to best protect the Company’s interests and to draft preventive guidelines to protect against potential future infringements. 3. To review and assess the courtroom proceedings in regards to the cases lodged against
Nomination and Appointment of the Board of Directors and Management Executives Board Member Selection
the Company in regards to infringement of Antitrust
Per the Company’s rules and regulations, the
Law or Competition Law. The Committee is also
Board of Directors must comprise of at least 5 and a
charged with the responsibility of selecting legal
maximum of 15 members for which the number is to
consultants and counselors to handle matters
be approved at the Annual General Shareholders’
on behalf of the Company where each case is filed.
Meeting. At least half of the Board members must
4. To gather evidences, obtain and examine
reside in Thailand and each person must possess the
relevant documents in regards to the infringement of
appropriate qualifications and is not subject to
Antitrust Law or Competition Law cases including the
any legal prohibitions. Directors are appointed by
authority to summon staff or employees for further
majority vote at the Annual General Shareholders’
inquiries
Meeting in accordance with guidelines and
5. To appoint sub-committees and/or working groups as deemed appropriate 6. To summon documents and relevant persons as deemed appropriate 7. To perform other relevant undertakings or any tasks as assigned by the Company’s Board of
procedures. At every Annual General Shareholders Meeting, one-third of the Directors shall retire from office. If the numbers of Directors do not match one-third exactly, the nearest amount to one-third shall be deemed appropriate. Guidelines have been stipulated by the Company’s Board of Directors in regards to selecting
Directors The Meeting of the Legal Committee is held
candidates to serve as a member of the Company’s
once a month or as scheduled by the Chairman of the
Board of Directors. The mandate of the Selection,
Legal Committee. Resolutions of the Legal Committee
Remuneration and Human Resource Development
are submitted to the Board of Directors for
Committee is to abide by the Good Corporate
acknowledgement.
Governance guidelines as stipulated the SET
88
Annual Report 2013
CORPORATE GOVERNANCE
emphasizing process transparency and ethical
Board Members must retire, candidates can be
guidelines along with compliance with the Company
selected from : 1) the same person(s) who has/have
guidelines on the selection process.
retired by rotation; 2) the list of accredited persons
Determine the necessary qualifications of the Board Member to be selected
to sit on the Board of state enterprises and announced
1. Key qualifications include sufficiency of
Board Member’s term is terminated prior to the
knowledge, experience and understanding of the role
completion of term, it is required that one third of
of being a member of the Board of Directors. It is
the person to be replaced from the vacancies
imperative for the Company’s Board of Directors to
must be an accredited person by the Ministry of
have persons having the necessary capabilities and
Finance; 3) list of names of candidates as submitted
understanding to set the direction of the Company
by shareholders (if any); 4) the name of the candidate
and the ability to oversee effectiveness in executing
submitted by the Chairman of the Board or the
of the Company’s strategies.
Company’s Board of Directors; 5) persons whose
2. The qualifications of each Board Member should provide comfort that the chosen person has
by the Ministry of Finance. In case that a non-accredited
credentials meet the above criteria determined through a screening process.
the ability to execute his/her fiduciary duty - duty of
Case 2: In case that a Board seat is vacated
care and duty of loyalty. Such person must also
by other than the case of 2.1, the Company’s Selection
be ethical, has integrity and be accountable for his/
Committee will undertake to find a new candidate
her actions and makes decisions based on informed
upon a resolution of the Company’s Board of Directors
judgment.
to appoint a replacement. Candidates can be selected
3. Possesses all the necessary qualifications
from 1) the list of accredited persons to sit on the Board of state enterprises and announced by the
as per the law and other related regulations 4. Not being hampered in judgment as an
Ministry of Finance. In case that a non-accredited Board Member’s term is terminated prior to the
Independent Director 5. Has the time to perform one’s duties for the
completion of term, it is required that one third of
Company which can be determined by the number of
the person to be replaced from the vacancies must be
companies for which a person serves as a Board
an accredited person by the Ministry of Finance;
Member. This is to ensure that the Board Member
2) list of names of candidates as submitted by
has sufficient time to attend Board meetings on a
shareholders (if any); 3) the name of the candidate
regular basis, to oversee its operations and keep
submitted by the Chairman of the Board or the
abreast of the Company’s operations.
Company’s Board of Directors; 4) persons whose
Board Member Selection Process
credentials meet the above criteria determined
1. The Selection Committee is charged
through a screening process.
with the responsibility of screening candidates to be
2. Screen candidates and ensure their credentials are as stipulated
selected to serve as a Board Member Case 1: In case a Board seat is vacated because
3. Secretary to the Nomination Committee
of a completion of term of the retiring Board
must verify the credentials of persons to be considered
Members as required by law where a third of the
to serve as a Board Member as per the process as stipulated by the Company
Thai Airways International Public Company Limited
89
CORPORATE GOVERNANCE
4. The Selection Committee must screen and
Appointment of Management Executives
submit the names of qualified candidates to the
In appointing the Company’s President, the
Company’s Board of Directors
Board of Directors must appoint a Nomination
Majority Vote at the Annual General
Committee comprising of 5 Board members and the
Shareholders’ Meeting to Determine Appointment
Executive Vice President Human Resource . This
of Board Member
Committee draws up qualifications and screens
1.
Each shareholder has 1 vote per share
owned
suitable candidates according to the Act of Standard Qualifications of the State Enterprise Directors
2.
Each shareholder must vote his/her
and Staff B.E. 2518 and that of the amended
entire vote in clause no.1 for an individual or
version. The Nominating Committee will submit
individuals to serve as a member of the Company’s
for a majority vote by the Company’s Board of
Board but is not allowed to make partial vote
Directors persons whose qualifications meet the
3.
The individual who receives the
minimum requirements.
highest number of votes in sequence will serve on the Company’s Board of Directors. In case that there is a tie for the last Board seat, the selection will be done by lottery
Nomination of Independent Directors Guidelines for Nomination of the Independent Directors are similar to that of the Company’s Board
In case there is a Board seat vacancy resulting
of Directors. The Company’s selection criteria for
from reasons other than by completed term, the
Independent Directors are more stringent than
Board of Directors is to appoint a person, whose
required by the Securities and Exchange Commission
qualifications must meet all necessary requirements,
in regards to shareholding requirements. Qualification
to serve on the Company’s Board at the next Board
of Independent Directors is as follows:
meeting but requires a vote of no less than 3
1. Shall not hold shares exceeding 0.5% of
quarters of the remaining Board Members unless
the total number of voting shares of the Company,
the remaining term of the vacated Board Member
its parent company, subsidiary, associate, major
is less than 2 months. The appointed person in this
shareholder or controlling person, including shares
case can serve as a Board Member for the remaining
held by related persons of such independent director
term of the vacated Board seat.
2. Shall neither be nor have ever been a
The AGM can vote to remove any Board Member
director with management authority, employee,
with at least a 3 quarters vote of the number of votes
staff member, advisor who receives a salary or is a
present at the AGM and has voting rights.
controlling person of the Company, its parent
At every AGM, at least a third of the Board
company, subsidiary, associate, same-tier subsidiary
Members must retire in turn but if the number of
company, major shareholder or controlling person
Board Members is not divisible by 3, the closest
unless the foregoing status has ended not less than
number shall retire. For the first 2 years post
2 years prior to the date of becoming a director. Such
registration of the Company, retirees are to be
prohibitions shall not, however, include cases where
selected by lottery. From then on, Board Members
the independent director previously served as a
with the longest tenure must retire in turn but
government officer or an advisor to a government
may be re-elected back to serve on the Company’s
agency which is a major shareholder or controlling
Board of Directors.
person of the Company
90
Annual Report 2013
CORPORATE GOVERNANCE
3. Shall not be a person related by blood or
7. Shall not be a director appointed as
legal registration as father, mother, spouse, sibling, or
representative of the Board of Directors, major
child, including spouse of child of other directors, of
shareholder or shareholder who is related to a major
an executive, major shareholder, controlling person,
shareholder of the Company
or person to be nominated as director, executive or controlling person of the Company or its subsidiary
8. Shall not undertake any business in the same nature and in competition with the business of
4. Shall neither have nor have ever had a
the Company or its subsidiary, nor be a significant
business relationship with the Company, its parent
partner in a partnership or director with management
company, subsidiary, associate, major shareholder or
authority, employee, staff member or advisor who
controlling person, in a manner that may interfere
receives salary or holds shares exceeding 1% of the
with his/her independent judgment, and neither
total number of shares with voting rights of another
is nor has ever been a significant shareholder or
company which undertakes business in the same
controlling person of any person having a business
nature and in competition with the business of the
relationship with the Company, its parent company,
Company or its subsidiary
subsidiary, associate, major shareholder or controlling
9. Shall not have any other characteristic
person, unless the foregoing relationship has ended
that limits his or her ability to express independent
not less than 2 years prior to the date of becoming an
opinions regarding the Company’s operations Independent Directors whose qualifications
independent director. 5. Shall not be nor have ever been an auditor
meet the 9 criteria above may be appointed by the
of the Company, its parent company, subsidiary,
Company’s Board of Directors to make decisions
associate, major shareholder or controlling person,
relating to the Company’s business operations, the
and not be a significant shareholder, controlling
parent company, subsidiaries, associates, same-tier
person, or partner of an audit firm which employs
subsidiaries or any juristic person, major shareholder
auditors of the Company, its parent company,
or persons with controlling power over the Company
subsidiary, associate, major shareholder or controlling
on a collective basis.
person, unless the foregoing relationship has ended
In case any person being appointed as an
not less than 2 years prior to the date of becoming an
Independent Director has or has ever had a business
independent director
relationship according to item 4 or has ever been
6. Shall not be nor have ever been a provider
a provider of any professional services according to
of any professional services including legal advisor or
item 6, the Company’s Board of Directors may
financial advisor who receives service fees exceeding
consider a waiver if it is determined that such
THB 2 million per year from the Company, its parent
qualifications of the person appointed does not bear
company, subsidiary, associate, major shareholder
impact upon his role and the independent of his/her
or controlling person, and not be a significant
opinion. The Company must disclose such information
shareholder, controlling person or partner of the
regarding the Independent Director in the Agenda on
provider of professional services, unless the foregoing
the Appointment of Independent Directors as part of
relationship has ended not less than 2 years prior
the invitation for the Shareholders Meeting.
to the date of becoming an independent director
(1) Business relationship or a provider of professional services which proves such persons not qualified under the specified regulation
Thai Airways International Public Company Limited
91
CORPORATE GOVERNANCE
(2) Justifications and necessity for maintaining
that current Board members and those retired from
or appointing such persons as the Company ’s
office of less than 6 months are not allowed to buy or
independent directors
sell THAI shares during the period of 1 month prior
(3) Opinion of the Board of Directors of the
to and 3 days post the disclosure of the Company’s
Company regarding the proposed candidate to be
financial statements. The Company Secretariat is
appointed as an independent directors
responsible for notifying both the Board of Directors and the Executive Management in regards to the
Supervision of Subsidiaries and Associated Companies
blackout period for which THAI’ s shares cannot be
THAI, as the major shareholder, has
A monthly shareholding report is provided
representation in its subsidiaries and associate
to both the Board of Directors and Executive
companies. Representatives from THAI are persons
Management summarizing changes in shareholding
selected by the Company’s executive management
of THAI shares by persons stipulated by the SET, the
and the Board of Directors to be appointed as a
SEC and the Company’s guidelines. Both the Board
Board Member in those subsidiaries and associated
of Directors and Executive Management have been
companies. Appointees are either members of the
notified of ensuing penalties for not complying with
Company’s Board of Directors or members from
the established guidelines within the stipulated time.
the Company ’s executive management or any
THAI’s ethics handbook clearly prohibits the use of
external professionals who have knowledge and
Company information for personal gains which is also
understanding of the business and someone who can
considered to be a breach of discipline.
traded.
contribute positively to that business. A standard handbook on guidelines of being a representative
Auditor’s Fee
has been provided to ensure that the appointees
Financial Auditor’s Fee
diligently execute their duties and responsibilities while upholding THAI’s interests.
The Company and its subsidiaries paid audit fees to the Auditor General for undertaking financial
A quarterly monitoring and operations analysis
audit work for the 2013 accounting year in the amount
report of its subsidiaries and associated companies is
of THB 4,220,000. No other payment was made to any
prepared for the Company’s executive management
person or business related to the Auditor General.
and the Board of Directors as information for decision-making and to set directives for its subsidiaries and associated companies.
Non-Audit Fees The Company and its subsidiaries paid fees for other services rendered by the Auditor General – audit
Policies on Insider Information
work as per BOI guidelines, audit work on its business
Policies and Supervision of Management on Insider Information
units, audit work on the Company’s Indian and Brunei
THAI strictly adheres to and abides by
fees amounted to THB 520,000 and no additional fees
the guidelines of both the SET and the SEC as
were paid to any person or business related to the
the emphasis is placed on good corporate governance.
Auditor General and no payment was made for work
An internal guideline was announced in 2004
that has not been completed for 2013.
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Annual Report 2013
offices. For the 2013 accounting period, total other
CORPORATE GOVERNANCE
Guidance for Good Corporate Governance The Company is committed to uphold the principles of good corporate governance as stipulated by the Stock Exchange of Thailand (SET). Apart from the Corporate Governance Policy disclosed on the Company’s website and in the annual report, THAI’s policy on resource management, social awareness and environment conservation are disclosed in the Sustainability Report. SET’s Rules and Regulations
Compliance by THAI
Reason
1 Board Member effectiveness may be lower should
Complied with Section 7
Opportunity loss on
one person sit on too many Boards. It is therefore
of the Act of Standard
recruiting various
important for the Company’s Board of Directors to
Qualifications of the State
professional expertise
carefully assess effectiveness and efficiency of
Enterprise Directors and
a s t h e C o m p a n y ’s
individual Board Members. A limit of 5 listed
Staff B.E. 2518, and the B.E.
directors
companies should be enforced which includes
2554 Cabinet resolution.
non-listed subsidiaries of the listed company. Such guideline should also be disclosed for the benefit of the general public. 2 The Board of Directors shall consider the appropriate-
Under the process of applying
ness of defining qualification of “Independent
policies from the Board of
Director” more strictly than the qualification set by the
Directors
SEC and the SET. This is to ensure that independent directors are truly independent but only if it is appropriate for the company. This issue should also be disclosed in the Annual Report. The Board of Directors should establish a tenure guideline for Independent Board Members of no more than 9 consecutive years. In case that such director is considered for re-appointed, the Board should consider appropriateness and necessity. 3 The Chairman shall encourage each Board Member to
Some Directors may have
attend no less than 75% of the total number of Board
attended less than 75%
meeting.
of THAI’s Board Meeting (Annual Report)
4 The charter or responsibilities of the Company’s Board of Directors shall be approved by the Board.
Under the process of applying policies from the Board of Directors
Thai Airways International Public Company Limited
93
CORPORATE GOVERNANCE
SET’s Rules and Regulations
Compliance by THAI
5 The Board of Directors and Sub-committees
Under the process of applying
shall perform self-evaluation once a year so Board and
policies from the Board of
Sub-Committees can review their performance and
Directors
make changes to improve their effectiveness and establish clear benchmarks for future comparison. 6 The Board of Directors shall clearly determine the
Under the process of applying
authorities of the Board Chairman and the President.
policies from the Board of
The Chairman of the Board of Directors does not
Directors
hold a management position but is an Independent Director and is not the same person holding the position of Company President. This should be disclosed in the Company’s website and Annual Report. 7 The Board of Directors shall be able to access any
Under the process of applying
necessary information from the President or the
policies from the Board of
Company’s secretary or any other executive management
Directors
under specified guidelines. In any cases, the Board of Directors may seek the opinion of independent advisors or external professionals for which the related costs are to be the Company’s expense. 8 The Board of Directors should hire an independent
Under the process of applying
advisor in determining guidelines and propose areas
policies from the Board of
for which Members of the Board are to be assessed
Directors
at least every three years. The results of such evaluation should be disclosed in the Annual Report.
94
Annual Report 2013
Reason