As the HRD Ministry drafts rules under the new Indian Institute of Management Act, differences have surfaced within the 20 premier B-schools. At least six new IIMs have expressed concerns that relinquishing of government control could undermine the accountability of the institute’s leadership.
This view, it is learnt, was expressed by the heads of the six IIMs in a meeting of all Directors called by IIM-Bangalore on January 22 to seek inputs for drafting rules under the new IIM Act, which came into effect on January 31.
The new law grants statutory powers to all IIMs including appointment of Directors and chairpersons.
Under the new IIM Act, an institute Director, who will also act as Chief Executive Officer, will be selected by the Board of Governors (BoG) of the institute from a panel of names recommended by the search-cum-selection committee (ScSc) also constituted by the BoG.
Earlier, the Director was appointed by the Board but with the prior approval of the Appointments Committee of the Cabinet (ACC) headed by the Prime Minister.
At least half of the 13 new IIMs, set up in the last decade, are of the view that the ACC should continue to remain involved even under the new law to ensure accountability.
“Before the new law kicked in, ACC approval meant the vigilance wing of the government would run a background check on each of the short-listed candidates to check corruption complaints or inquiries against them. There will be no such checks now,” said the Director of a new IIM, on conditions of anonymity.
“Also, unlike the older IIMs, which are well-established and have an experienced Board, the newer ones are still dependent on the government and have inexperienced BoGs. What will happen to second and third generation institutes in the complete absence of government involvement?” said the same Director, and added, “While we don’t want the government to play an active role (in our administration), we also don’t want the government to play no role at all.”
Another IIM Director disagreed and told The Indian Express that the concerns of the new institutes were “theoretically valid” and that there were enough checks in the system to ensure the Board or the chairman of the BoG do not abuse absolute powers under the new law.
“What the new IIMs are experiencing is natural anxiety that comes with a new law. Let’s assume an IIM gets a chairperson who does not share the broad values and ethos of IIMs. Members of the alumni and the government representative on the Board will keep such a chairperson in check,” he said.
Professor G Raghuram, Director of IIM Bangalore, declined comment on the details of the January 22 meeting. “It was a healthy sharing of views between IIMs of different generations. It gave us a platform to understand one another,” he said
Of the 20 IIMs, 13 – in Raipur, Rohtak, Ranchi, Trichy, Kashipur, Udaipur, Nagpur, Vizag, Bodhgaya, Amritsar, Sambalpur, Sirmaur and Jammu – were set up after 2010.
Under the new Act, the IIM Board will comprise a chairperson, one central government nominee, one nominee of the state government where institute is located, four eminent persons, two faculty members and up to five alumni.
According to sources concerns were also expressed about the self-appointing nature of the BoG as per the IIM Act in the January 22 meeting.
“A self-appointing Board can be a self-perpetuating Board. The selection of BoG members should be transparent and ideally through an advertisement,” said the Director of one of the six new IIMs worried about accountability. It was also suggested that there be an age limit for BoG members.
“We have to find ways to allay the fears of the new IIMs. One of the ways of ensuring accountability of the BoG is to have eminent people as members and even the Director of the mentoring institute on the Board of a new IIM. The culture of the older IIMs will have to be inculcated in their newer counterparts,” said the Director of an older IIM.
The degree of autonomy to be granted to the 20 premier B-schools under the IIM Act was the source of some friction between the Prime Minister’s Office and the HRD Ministry in 2016, then under Smriti Irani.
While Irani had advocated retaining some form of government control over the institutes, the PMO pushed for complete autonomy. Ironically, the new institutes are now worried if this freedom will be “abused” by the Board.
The HRD Ministry has set up a committee, headed by IIM Sirmaur chairman Ajay Shriram, to draft rules under the IIM Act. HRD Minister Prakash Javadekar had said that the government would try to finalise rules in a month. The suggestions made by the new IIMs will be discussed at the next meeting of the rules committee.