THAI : CG 2013

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

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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

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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.

92

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.

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Annual Report 2013

Reason