On May 21, 2024, Singapore Airlines (SIA) flight SQ321 was forced to emergency landing at Suvarnabhumi Airport after encountered clear air turbulence which caused several injured passengers and one passenger’s life. Upon arrival, all passengers were taken care right away by responsible persons and some were sent to nearby hospital for immediate special treatments. 

According to several media’s reporting, involved parties are praised of their professionalism for proper response to this mass casualty incident. On May 28^th, Singapore Prime Minister Lawrence Wong also phoned his Thai counterpart Srettha Thavisin to thank the Thai government for her support.

Numbers of concerned parties; such as SIA’s cabin crews, Smithiveth Srinakarin Hospital’s medical personal, Suvarnabhumi Airport’s medical doctor & staff, to name a few; properly carried their duties which results in on-time rescuing.

All these crisis management actions are performed according to what each parties prepared and practiced beforehand. Besides top executives who provide support and guidance on this kind of rare activity, the Board of Directors should ensure that their people are ready to handle their functions properly under any circumstances. To carry on duty of Directors of the Board on people issues, in my view, there are five areas Directors should pay attention.

1. HR Policy

A written policy on all aspect of human capital issues in the organization, HR policy typically addresses the way corporation should perform on recruiting, rewarding (salary & benefit), re-training (HR development) and retaining. This guidance normally covers corporate values, and cultures, not to mention code of conducts as well.

It is understandable that the HR policy can be considered as one of the crucial written documents which may be not available at most of the firms. Since it relates to HR issues, some of CEO and management may believe it is mundane subject for which responsible persons should already know their jobs how to perform. However, they may not realize that the written document can serve the same understanding on the issues and be the solid reference whenever it is needed. Director should ensure that there is a HR policy in place.

2. Succession Plan of CEO and top executives

Officially, the Board has only one direct report which is the CEO who will communicate with top executives to manage the firm as agreed and guided by the Board. The succession plan for the CEO position is critically important to the company since organization will suffer much if the CEO suddenly cannot perform. The same logical approach should also be applied with CEO’s top lieutenants.

In addition, although Directors should only involve with CEO and top executives, Directors should know practice of success plan of the organization to ensure that organization can operate smoothly at all time. Do not forget that the front-line manager and employee are the one who press the button when the time call for not the top man.   

3. Selection process of CEO and top management

Selection process should run through five simple steps which are agreement (among Directors) on expected CEO (or top management)’s qualification, considering internal only or external candidate also, preparation all necessary support information, conducting reliable psychological & cognitive ability assessment and predicting potential behaviors. Directors should highly involve with the process of CEO’s selection and the key executives. From my direct experience, organization which Directors prepare and seriously participate hardly place wrong candidate on board.  

4. Evaluation of CEO and key executives

CEO and top management should be evaluated by the Board at the end of fiscal year. At the first place, Directors should decide and mutually agree with the CEO on what should be measured and evaluated. What are the criteria? It is also important to address that all these factors must be put on written document and evaluation must be made within this framework only. This mean what the Board and CEO agree on CEO’s evaluation, after approval of next year annual plan, Directors should not address the issue beyond what are already agreed

Evaluation can be conducted once or twice a year. In addition, Directors should ask CEO to present top executives’ evaluation approach as well.

5. Compensation of CEO and top management

Retaining the capable CEO to grow and sustain business requires combination of financial and non-financial factor. Not only the CEO but also high potential employees expect the company to properly take care their well-beings. This means the Board should take good care of both top management, and CEO, and the rest of employees.

Directors may not have much time to investigate details of each employee of lower level but they should know how salary and benefit are structured to ensure that people at the far end of value chain will always be motivated to perform properly and happily. Think about all people involved in emergency landing of SQ321 and how good of their performances then. 

All five issues, which are directly related to 2017 SEC (the Securities and Exchange Commission)’s Guideline, can be taken care by a subcommittee namely Human Resources and Compensation Committee (HRC).

Although, some of listed firms may adopt the term Nomination and Remuneration Committee (NRC) instead, I have my view that the term HRC is more suitable and directly communicate that the Board really concern and prioritize HR issue as an important matter.

It may be a small thing, to name the Human Resources and Compensation Committee (HRC), but for small guy it means a lot especially when it is the clear message from the top guy on the pinnacle of pyramid that they do care the ones in the front line.

Disclaimer: This article is written for educational purpose only.

Sorayuth Vathanavisuth, Ph.D. a DCP 3 & CDC10 - Graduate Member and former facilitator of DCP’s Strategic HR section. He can be reached at sorayuth@sealeadership.com.