No Professional Leaders At State Enterprises: Thai Talk

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THAI TALK

No professional leaders at state enterprises

Suthichai Yoon

The Nation

Piyasavasti Amaranand

BANGKOK: -- Several state enterprises, including Thai Airways International (THAI) and the Mass Communications Organisation of Thailand, are inviting candidates for the position of chief executive officer.

But they aren't going to get any professionally qualified managers to apply. The best and the brightest just don't want to work for them.

That's not because there aren't enough qualified people who are keen to try their hand at running a major state enterprise that should be more competitive against peers in the region.

Neither is it because the finances and prestige aren't there.

The most obvious and recurring problem is that, from the outset, the selection committees assigned to pick the most qualified person to become the CEO just aren't qualified themselves.

The rotten system begins with the process of picking members for the screening committee. They have to follow the instructions, direct or otherwise, from "the boss up above".

The more prestigious the position, the higher the rank of the person who gives the order about who must get the CEO post.

Therefore, lobbying starts at the selection of the selection committee members. They have to be ready to play the game, meaning that, whatever the requirements published in advertisements calling for candidates, the selection process will still have to end up with just one person in mind. Other candidates are eagerly sought only so the whole exercise can appear to be fair and transparent.

When the selection committee is "orchestrated" like this, what do we expect the final outcome to be? In the end, while the process of picking the next manager to run the state enterprise may appear to be open and fair, the heavy political manipulation inherent in the system will produce only mediocre leaders at best and political cronies or lackeys at worst.

From time to time we get a professional executive in the post by default. He sets about overhauling the organisation, trying to "de-politicise" the enterprise and getting the staff to stick to a key performance index (KPI) rather than a "please the politicians index". But this only promises to make his term a short-lived one. He may leave some marks of professionalism, only for them to be wiped out by the next CEO who's been picked after the rigorous screening of the selection committee. The "typical guy" is finally back in office.

Piyasavasti Amaranand was one of the few "professionals" who was taken on board a leading state enterprise (THAI) and was then unceremoniously kicked out. The board checked his KPI and he got a nice pass rating of better than 80 per cent, but he was told to leave anyway.

His crime? The board's official reason given to the public: "Lack of proper communications with the board of directors." That suggests that the board would only tolerate a CEO who was ready to obey orders and not someone who would challenge its line of thinking.

The real question therefore lies not with the CEO but with the board of directors of a state enterprise. How is the board selected? That's the real question. The system seems neither transparent nor fair.

Boards of directors of state enterprises are usually picked by Cabinet members whose only yardsticks are whether the directors can serve the politicians' interests or not. It is therefore small wonder that we can't expect a professional CEO to last in any state enterprise, considering the fact that we don't get a professional board of directors in the first place.

Directors don't get sacked for being unable to communicate well with the CEO. It's because they only keep a CEO who can follow instructions from the board, which get its marching orders from Cabinet members, who have to follow their own bosses' instructions in the first place anyway.

-- The Nation 2012-06-28

[hansgruber]

The problem is that Thais run companies(being public or state) with the political mentality much like government.

Corruption, cronyism. Void of responsiblity and ethics.

No wonder they always run at a loss. The only time they ran at a profit was this year, so what do they do? Fire the guy in charge.

Edited June 28, 2012 by hansgruber

[Reasonableman]

Not corrupt enough, it seems. Reminds me of the Olympus fiasco.

[Curt1591]

The problem is that Thais run companies(being public or state) with the political mentality much like government.

Corruption, cronyism. Void of responsiblity and ethics.

No wonder they always run at a loss. The only time they ran at a profit was this year, so what do they do? Fire the guy in charge.

Exactly!

No one, with any integrity, would think of working for these people.

[noitom]

This is actually a respectable article and identifies the key issue of "transparency." There is no transparency and accountability in Thailand public or private. It's all maneuvering and smoke and mirrors, but most of all, no transparency. Big problem.

[maidu]

When George Bush (the younger) was running for president, his initial time, he needed a vice presidential candidate. He appointed Dick Cheney to head the committee to find the best candidate in the entire US. Two weeks later, Mr. Cheney reported back to Mr. Bush, "My committee has found the best possible candidate." George responds; "Yes Dick, who is it?" Cheney; "Me!"

Regarding choices for best people to head important groups in Thailand: I have often thought about that. I've concluded that the criteria for choosing best candidates are predicated on the following criteria:

>>> be from prestigious family

>>> related to one or more members of committee

>>> be related to one or more people in upper gov't

>>> be rich, or at least connected to money

>>> be connected to ruling political party, or at least be a big donor

At the bottom of the list.....

>>> skills

>>> wisdom

>>> compassion for those less fortunate

[maidu]

some posters, and the OP opinion piece itself, supposes that no decent person would accept a top job related to a corrupt government. I disagree. Money is God here. A good paying prestigious job is tantalizing - particularly if it's known that such a position can lead to lucrative 'under the table' bonuses. The lure is palpable.

[belg]

big (CEO) or small (cops and teachers) have to grease the wheels of corruption to buy in their position... when will it ever change ? i guess about NEVER in this country

[Unkomoncents]

This is actually a respectable article and identifies the key issue of "transparency." There is no transparency and accountability in Thailand public or private. It's all maneuvering and smoke and mirrors, but most of all, no transparency. Big problem.

I agree. This is one of the most sober, serious, and analytical of The Nation's pieces in recent memory. It's also disturbing and, as with many similar assessments of the problems with Thailand, it's probably only touching the surface of what's really dysfunctional in Thai public companies. That seems to be a running theme with Thailand. Because of the complete lack of transparency, professionalism and enforcement, chronic corruption, and a mentality that places honesty among the least important of social values, it's terrifying to contemplate the true breadth of some of Thailand's issues.

[hansgruber]

This is actually a respectable article and identifies the key issue of "transparency." There is no transparency and accountability in Thailand public or private. It's all maneuvering and smoke and mirrors, but most of all, no transparency. Big problem.

I agree. This is one of the most sober, serious, and analytical of The Nation's pieces in recent memory. It's also disturbing and, as with many similar assessments of the problems with Thailand, it's probably only touching the surface of what's really dysfunctional in Thai public companies. That seems to be a running theme with Thailand. Because of the complete lack of transparency, professionalism and enforcement, chronic corruption, and a mentality that places honesty among the least important of social values, it's terrifying to contemplate the true breadth of some of Thailand's issues.

To give it to you simple.

It's just a government within a government. Nothing can function because of infighting within these organizations.

[JurgenG]

First this is not a problem specific to Thailand.

Furthermore I guess the writer miss a very important point. State enterprises are not your usual for-the-profit enterprise, their goal is to serve the interest of the state, as the name clearly implies. An "flag carrier" airline for example may have the obligation to deserve countries not because it's profitable but because of the political relation between the two countries. Same for the post office or the national railway that have obligation to serve remote area because of reasons that are more political than economical.

And even the major public companies have incestuous links with the political world. Failing to understand that costed a number of CEO their job and for some their freedom.

[h90]

The problem is that Thais run companies(being public or state) with the political mentality much like government.

Corruption, cronyism. Void of responsiblity and ethics.

No wonder they always run at a loss. The only time they ran at a profit was this year, so what do they do? Fire the guy in charge.

But you have family owned companies, and they aren't small, Chinese ethnic and they are well run, very well.

I would say it is not a Thai problem it is a politic problem.

[waza]

ok

[ttelise]

ok

The man of many words. Waza, the Shaolin monk.

[waza]

ok

The man of many words. Waza, the Shaolin monk.

[hansgruber]

The problem is that Thais run companies(being public or state) with the political mentality much like government.

Corruption, cronyism. Void of responsiblity and ethics.

No wonder they always run at a loss. The only time they ran at a profit was this year, so what do they do? Fire the guy in charge.

But you have family owned companies, and they aren't small, Chinese ethnic and they are well run, very well.

I would say it is not a Thai problem it is a politic problem.

I assume you're right but the thread is about publicly listed companies and state owned enterprise.

[Puwa]

About 5 years ago, I was at a conference on clean energy investment where Piyasavasti, Energy Minister, gave the keynote. He didn't seem so professional. He launched into an unprovoked tirade (Thai-rade?) at the foreign audience saying that other countries should "look at themselves before criticizing" Thailand's energy policies. But of course no one was criticizing anything--we were waiting to hear his pitch for developing a clean energy sector. These weren't journalists, diplomats, or NGOs, but major potential investors. But i guess in his eyes they were all just foreigners ad he had to protect Thailand from them. He came off looking like a complete idiot. If that's the best example of an executive who is too good for state enterprises, then the situation is even worse than this article suggests.

[maidu]

About 5 years ago, I was at a conference on clean energy investment where Piyasavasti, Energy Minister, gave the keynote. He didn't seem so professional. He launched into an unprovoked tirade (Thai-rade?) at the foreign audience saying that other countries should "look at themselves before criticizing" Thailand's energy policies. But of course no one was criticizing anything--we were waiting to hear his pitch for developing a clean energy sector. These weren't journalists, diplomats, or NGOs, but major potential investors. But i guess in his eyes they were all just foreigners ad he had to protect Thailand from them. He came off looking like a complete idiot. If that's the best example of an executive who is too good for state enterprises, then the situation is even worse than this article suggests.

Interesting point. As far as I've seen, the Yingluck gov't hasn't said squat about energy policy. It's waiting for T to tell them what to think, and T is too busy looking in his mirror with frame made from gold-encrusted dollar signs.