It is impossible for anyone doing anything from welding to cryptography to perform when his boss, or some other authority figure, is peering over his shoulder. My friend who is a teacher has to deal with "observations" by administration in the new regime at his school. He says this throws him completely off his game and makes it nearly impossible to perform.
Yes, the captain standing there observing while the plane plummeted, must be counted as the person most responsible here, both for failing to take charge and fulfill his duties as commander of his craft, as well as failing as a pilot.