Yes, you definitely should have informed the ISM of your intention before executing the seat swap yourselves. It's up to their discretion if they'll allow the swap, but given a friendly & effective explanation, the ISM probably wouldn't have an issue with this, especially since Asian business culture is hierarchical, and the ISM wouldn't want to be responsible for ruining your career and harmonious relationship with your boss!

As to why you got upgraded over PPS on both occasions, if there's no difference in fare basis, and that you're not a VIP, I honestly have no idea. As you are well aware, very few PPS get op-ups with any regularity, so the fact that you got it twice is very unusual and unlikely.