SCIB chairman Sompol Kiatphaibool reasoned that the cancellation of the selection process for the new president was intended to prevent possible rifts and conflicts within the bank. This explanation is far from convincing.

The bank started the process to select a new president by accepting applications from candidates that met the desired criteria. The selection committee was then set up to scrutinise candidates and decide on the most qualified among them based on personal merit and professional track record.

Transparency in the process used to select a bank's president is important to ensure that the candidate who can best be expected to act in the interests of shareholders and stakeholders is chosen.

It was admirable for the SCIB to take the initiative to recruit a professional executive to serve as its president, but its failure to abide by the selection committee's recommendation reflects poorly on the bank in the eyes of the public.

No one in the banking industry needs to be reminded that the 1997 financial crisis stemmed largely from a lack of corporate governance. For example, executives selected to run banks based on personal connections with management tended to be poor protectors of the interests of stakeholders as they had to repay favours by turning a blind eye to the fraudulent practices of management, if not by actively participating in such misdeeds.

SCIB was, in fact, one of the troubled commercial banks that got caught in the financial crisis, prompting the Bank of Thailand to spend huge amounts of taxpayers' money to bail it out and keep it in business. With the bank having emerged from the crisis, people might have expected that it would have learnt its lesson and put in place principles of sound corporate governance in all aspects of its operations. Selecting a new president through a transparent process is a crucial component of good governance and one of the best practices in the banking industry today.

As representatives of a listed company and a commercial bank, SCIB's board of directors will have a lot of explaining to do.

Let's not forget that the principles of good governance require that a bank's senior executive be chosen by an independent selection committee, rather than the board itself, to ensure adequate checks and balances. Sompol's claim that SCIB's directors had to step in and appoint the president because they wanted to safeguard the interests of the bank's stakeholders, including staff and shareholders, rings hollow.

Corporate governance refers to the management processes of a firm. Different companies define corporate governance differently, but the concept is generally defined as the effective use of resources - both human resources and capital - to ensure an accountable and transparent process that enhances value to shareholders and stakeholders. Companies that adhere to the principles of good governance are characterised by a high degree of accountability and sound controls within their management structure.

SCIB's board of directors must explain why they wanted to revert to the old, corruption-prone way of doing business - compromising the bank's credibility in the process - when they could have opted to adhere to a high standard of corporate governance and the best practices in the banking sector.

It may be true that some among the bank's workforce may have had misgivings about the bank hiring a professional executive to serve as president for fear that he might push new policies, such as downsizing that could effect their job security. Nonetheless, the board still owes the public a full explanation for its odd decision to avoid embracing the principles of good corporate governance.