Kuwait Airways has suffered from administrative instability for more than half a century, resulting in losses of tens of billions of US dollars in public funds. The reasons are well known - most are political, compounded by frequent changes in boards of directors, some of which were either unqualified or lacked sufficient authority. In the absence of effective government oversight, some KAC boards were pressured by certain MPs to appoint unqualified individuals. According to my information, KAC still operates without written, pre-agreed performance standards between the board of directors and the executive management.
The lack of accountability, combined with continued board interference in operational decisions without sufficient technical expertise, has led to frequent clashes between the two sides. The Public Authority for Civil Aviation (PACA), with its incompetent management, has also played a role in hindering KAC’s operations.
The interference of some MPs, as well as the PACA’s occasional submission to their demands, cannot be ignored. The classic structural imbalance between senior administration and executive management must be resolved at the first upcoming meeting of the new board of directors, which consists of five Kuwaiti members and three foreign members. Each of the three foreign members will wear two hats - that of a board member and that of a member of the executive management.
Therefore, the board of directors must address this unprecedented situation by adopting the following measures:
1. Define the strategic goal, which means clearly establishing KAC’s ultimate objective - pure profitability, public service, or a combination of both in specific proportions. This will determine the direction of every subsequent decision, whether related to pricing, recruitment, investment, or the performance evaluation criteria for executive staff.
2. Strengthen oversight and accountability by establishing clear key performance indicators (KPIs), reviewing them periodically, and holding the executive management accountable for achieving them.
3. Approve fundamental decisions, including major budgets, organizational restructuring, and key human resources policies.
4. Protect the independence of the executive management from day-to-day interference while ensuring that it remains aligned with the state’s overall direction as the owner.
The airline’s situation was certainly not lost on those who accepted positions in its executive management. They will likely have the upper hand in most decisions and will not be mere “rubber stamps,” as was often the case with previous executive management teams. Perhaps the situation will need to be the complete opposite, especially during the initial phase, with the foreign executive management effectively holding the real strategic decision-making authority, even though the board will retain formal legal responsibility to the owner.
This is dictated by the circumstances. I believe that any obstruction by any party could prompt the three-member executive management team to submit their collective resignation, especially since their expertise is in high demand and they are unlikely to remain idle for long. Therefore, the owner needs to clarify all these matters to the new board of directors. A clear performance contract with the foreign executive management team is essential, linking the members’ continued employment and compensation to predefined and mutually agreedupon performance indicators.
By Ahmad alsarraf
email: [email protected]
email: [email protected]
