Sustainability

Corporate Governance

Sustainability

Corporate Governance

PTT assigns high importance to good corporate governance and the development of mechanisms of organizational management that are efficient, transparent, and effective, while also taking into account concerns related to stakeholder benefits. PTT prioritizes development of corporate internal management mechanisms for greater effectiveness. The Group sets clear Corporate Governance, Ethical Standards and Code of Business Ethics in the handbook, ‘Corporate Governance, Ethical Standards and Code of Business Ethics Handbook.’ This handbook was developed for the Board, executives, and all employees to adhere accordingly as guiding principle in work and responsibility. The handbook addresses good work principles, applicable to both within PTT Group context and external for various stakeholder groups. There are constant reviews and updates of content to meet global trends. 

Reference: Corporate Governance, Ethical Standards and Code of Business Ethics Handbook


PTT Board of Directors

PTT's Board of Directors plays an integral role in defining the organization's strategic plans, vision, action plans and annual budget as well as in determining its remuneration and risk management, including monitoring management performance and operational efficiency through careful screening. PTT restricts the number of directors on its Board at no less than 5 but not exceeding 15, and each director must have been nominated by the Nomination Committee. Each director is an expert in a particular field, and all have substantial experience as senior executives in major organizations from various professional fields considered necessary to provide PTT with balanced management. For example, PTT's directors are knowledgeable in areas such as the energy and petroleum sector, law and jurisprudence, and accounting and finance. They shall not hold the position as PTT's executive, and shall not be the Chief Executive Officer or Management Director. Moreover, since 2001, PTT has determined that the Chairman of the board is to not be the same person as the Presenting & CEO in order to endure the transparency and accountability. The curriculum vitae and details of all directors can be found in the Annual Information Registration Statement (Form 56-1), in the Annual Report (Form 56-2), and on PTT's website.

PTT focuses on annually assessing the performance of the Board of Directors to ensure that Corporate Governance are carried out effectively fairly, and aligns with the organization's Corporate Governance principles. In 2019, there was modification to the Board’s assessment under the topic of Board Policy. The scope is extend to encompass adoption of innovation and digital technology as part of the corporate drivers. There are also adjustments in content regarding Board Practices under the topic of performance assessment. The content is clarified and ensured for comprehensiveness to facilitate utilization of Board’s assessment results. There are 5 types of assessment forms used. This comprises of the committee-level assessment, individual-level assessment (self-assessment), individual-assessment (peer review), topic-specific assessment (topic specific director assesses relevant topic-specific committee), and assessment of the committee's chairman's performance and roles, satisfaction regarding topic-specific committee's performance and their respective chairman (assessed by all directors).

These are the tools for the Board to review past performance, obstacles and challenges in the past year. Results from the assessments are disclosed in the Annual Information Registration Statement (Form 56-1) and the Annual Report (Form 56-2). In addition, since 2017, the Board has adopted KPIs to measure the Board of Directors' performance, which will factor into the Board's remuneration consideration.

In addition, PTT's Board of Directors is evaluated by an independent assessor through the Ministry of Finance's Office of the State Enterprise Policy Office (SEPO) on an annual basis, as well as through the Thai Institute of Directors (IOD) every two years or IOD required period. As for Board remuneration, PTT's Remuneration Committee defines a fair and appropriate remuneration policy, and is responsible for reviewing the policy by considering factors as appropriateness, director responsibilities, the company's financial status, performance according to the PTT Performance Agreement (PA), and peer benchmarking.

Remuneration criteria for CEO and President as of 2019 comprises PTT's performance according to the State Enterprise Review System, leadership and managerial capabilities, and performance against the Group's vision. PTT has ensured public disclose of the metric used to consider executive's compensation in PTT's annual report. The content clearly states the President and Chief Executive Officer's compensation, each Board of Director's compensation and a total value for Executives compensation. Nevertheless, the auditor and audit committee that PTT uses have been verifies to ensure transparency and accountability.

PTT Board of Directors



Management

The Management is responsible for overseeing the company's business and daily activities, where the President and CEO is the top executive in charge of company management, as entrusted by the Board of Directors. The President and CEO must also strictly supervise company management in accordance with the work plan and budget approved by the Board of Directors, while demonstrating integrity and accountability, for the best interests of the company and its shareholders. Moreover, the President and CEO manage the company through the PTT Management Committee (PTTMC), which then appoints 24 sub-committees to handle and manage internal affairs appropriately, with maximum efficiency and effectiveness.

Management remuneration is in line with the policies and criteria set by the Board of Directors, as well as those determined by the Ministry of Finance's Performance Agreement, entirely covering economic, social, and environmental dimensions. The Remuneration Committee is responsible for considering remuneration of the President & CEO to reflect his performance management which are also in line with the principles and the standards of other industrial peers, consisting of targets such as EVA, ROIC, etc. The President and CEO, as well as executives at all levels, jointly determine Key Performance Indicators (KPIs) each year to serve as guidelines for PTT's business direction and to evaluate performance.

PTT Executives
Governmental Annual Performance Evaluation Report


PTT's Executive Compensation for 2019

2019 Compensation (Thai Baht)CEO and President Four PTT Executives meeting SEC’s definition
Total compensation 31,199,880 29,236,280
Total Bonus 9,855,938 14,618,140
Total 41,055,818 43,854,420

**Remarks: Ratio between the total annual compensation of the Chief Executive Officer and the median employee compensation is at 35.5 : 1.