ISLAMABAD: The Supreme Court has highlighted that the Board of Directors (BoD) of the national flag carrier — Pakistan International Airlines (PIA) — should act independently, transparently and in an impartial and unbiased manner while selecting the best and most suitable candidate for the coveted post of the airline’s chief executive officer (CEO).

“BoD is responsible for the planning, succession and appointment of CEO of the company and in doing so it has to evaluate the potential candidates on the fit and proper criteria,” the apex court said in its detailed judgement in a case related to the appointment of Musharraf Rasool Cyan as PIA’s CEO.

Earlier, in a short order issued on Sept 3, a three-judge SC bench had declared that Mr Cyan was not qualified to be appointed as CEO, besides the procedure adopted for his appointment did not conform to the required law and rules.

Then the federal government was also ordered to take necessary steps to appoint a new CEO of the PIA strictly on merit and in accordance with the law.

Directors have been told to formulate policies to minimise corruption

The matter regarding the appointment of Mr Cyan was taken up on an application addressed to the then chief justice of Pakistan, Mian Saqib Nisar, levelling serious allegations of favouritism and cronyism against the PIA’s top officials.

The application had alleged that the top officials were holding office without lawful authority and were bent upon selling the national assets [PIA] at a throwaway price, had closed down profitable routes of the national airline and given the same to other airlines. These airlines, the petition had alleged, were operating on the same routes, which the PIA had closed down, and thus generating revenues that could have been earned by the PIA by operating flights on those routes.

In the detailed judgement, Justice Ijaz-ul-Ahsan explained that the airline’s BoD was mandated to create a “code of conduct” for the functioning of the board as well as all senior or junior officials of the company’s management.

Strict compliance with the fundamental principles of probity, propriety, integrity and honesty has been cast upon the board to ensure that the public assets are not plundered or that no situation entailing a conflict of interest catering to personal benefit or vested or political interest arises, according to the judgement.

To this end all directors are required to declare their interests in the shape of a register of interests, coupled with a declaration to the effect that would not accept any compensation, remuneration or other benefits in any shape or form on any account, apart from the remuneration that they receive from the company, it says.

According to the judgement, the board is also required to formulate policies to minimise corruption, identification and monitoring of risks, procurement of goods as well as services, including but not limited to acquisition of assets along with disposal of these assets and other investments.

Even the services rendered by the company as a public service obligation have to be quantified where appropriate compensation is required from the government, it says.

Against the above backdrop, Justice Ahsan observed, the SC had carefully examined the process and different stages which Mr Cyan’s appointment went through or ought to have gone through under the law.

The court directed Mr Cyan and his counsel to define and justify his appointment and specifically confronted with the allegations and given ample opportunity to explain the deviations from law and procedure, which had prima facie occurred in the process of his appointment.

The judgement regretted that there was no record of the workings of the so-called selection board and whether in evaluating Mr Cyan’s eligibility, the fit and proper criteria were adhered to. Moreover, no interview of Mr Cyan was conducted by the board as required by the guidelines. This fact is corroborated by the minutes of the 14th meeting of the BoD where two of the members of the board objected to the selected candidate as they were denied the opportunity to shortlist and interview the candidates, but to no avail.

The candidate earmarked for selection by those who were calling the shots had already been selected and the board was to be used as a rubber stamp only, the judgement said. It regretted that the earlier clear, unambiguous and unequivocal pronouncements by the apex court on similar issues had fallen on deaf ears and no heed had been paid to the same which had led to disastrous and cataclysmic consequences. And the PIA was a grim example of the same, it added.

Published in Dawn, January 25th, 2019