New Delhi: The Indian Institutes of Management (IIMs) were unable to make the best use of the autonomy given to them by the IIM Act, 2017, and failed to improve their research output, global rankings or their stature in the eyes of the corporates, said former IIM Ahmedabad (IIM-A) director Bakul Dholakia.
In an interview with ThePrint, Dholakia raised concerns about the actions of some IIM directors in the past few years, which, he said, raised doubts among stakeholders.
Dholakia spoke to ThePrint on wide ranging issues, including autonomy — which comes in the backdrop of the IIM (Amendment) Bill, 2023, introduced in the Lok Sabha by the ministry of education last Friday. The Bill proposes to dilute the autonomy of IIMs by appointing the President of India as the “Visitor” of the institutes with powers to appoint chairperson of the Board of Governors (BoG) and directors of the institutes.
Talking about the drop in rankings of IIM-A over the last decade, he said, when IIM-A participated in the global rankings in 2009-10, it was ranked 11 on the FT Global rankings for its one-year business programme. Its rankings for the same programme this year was 51, he said.
“IIMs are ranking below private management institutions and don’t even figure in the world’s top 50 management institutions. This is a matter of concern,” he said.
Under the IIM Act, 2017, the BoG had the power to appoint the chairman, chosen from among eminent persons distinguished in the field of industry or education or science or technology or management or public administration or such other field.
The amended Bill will give the Visitor the power to have a final say in the appointment of the director of IIMs. This is a major change vis-a-vis the 2017 Act, under which the director, who is the CEO of the institute, was appointed out of the panel of names recommended by a search-cum-selection committee constituted by the BoG.
According to Dholakia, the amendments to the IIM Act are a warning bell, which the institutes must take seriously.
“The current amendments are a halfway house wherein the government has taken control only of the appointment of the director and chairman,” said Dholakia.
“My worry is that because a lot of complaints were sent to the ministry regarding the functioning of the IIMs, it resulted in the amendments that have been brought in. Now, tomorrow, if more complaints regarding the functioning of the board go to the government, more amendments will come, which will actually erode the autonomy of the IIMs,” he added.
During his term as director of IIM-A, between 2002 and 2007, Dholakia had reportedly batted for greater autonomy of IIMs and even had run-ins with two Union education ministers — Murli Manohar Joshi and Arjun Singh.
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Unchecked power
Speaking about how the autonomy in the case of IIMs has backfired with all the powers of the board residing within the office of the chairman alone, Dholakia questioned several decisions taken by IIM boards in the recent past, including that of IIM-A.
“IIM-A has been a faculty-governed institution since its inception, and the board and director need to respect that. If a director does not take into account the views of the faculty, then the very fundamental basis of requiring autonomy goes out of the window,” he said.
He said this with reference to the faculty raising objection over razing of Louis Kahn’s red brick dorms and the change in logo of the institute. The issues had become controversial talk points in the media.
The former director of the institute also questioned the move last year by the IIM-A board to give performance bonuses to its directors.
“Never in the history of IIM-A has such a thing ever happened. I don’t have a problem with the bonus being given. However, on what performance parameters is it being given? The board has never answered the questions of the stakeholders,” he added.
Govt intervention, checks and balance
Dholakia, who was associated with IIM-A for over 30 years, spoke at length about how the BoG of IIMs had been taking several actions with no accountability, and the introduction of the visitor’s nominee in the amended Bill would provide for a system of checks and balances to the board.
The amendment will give the visitor the power to appoint a nominee in the selection-cum-search committee, who will be a part of the decision making process in picking an IIM director.
“Autonomy without accountability leads to reckless decisions. I want to know if the Board of IIM-Ahmedabad has had any discussion about the declining rankings. If they didn’t, then what’s the use of this autonomy?” he asked.
“The focus of discussion should not be on demolition of dorms or change of logo, but on performance,” he added.
According to Dholakia, the visitor having a nominee on the board or selecting the chairman of the board was not going to change the current situation.
“Things will only change when the heads appointed have the best interests of the institution. This can only happen if the chairman and visitor’s nominee are people of eminence, who do not let their biases get in the way,” he said.
Meanwhile, quelling fears of director/chairman appointments being political in nature, Dholakia said, director’s appointments have not been political for the past 40 years.
The NDA government appointed IIM directors till 2017 as did the UPA government before 2014 — IIMs remained the premium management institutions in the country despite that, he asserted.
However, Dholakia did suggest that the government should stay out of the running of the business management institutes. “The amendments should not be used as a means to bring backdoor control in IIMs.”
He acknowledged that both the board and government can make mistakes and cited the example of IIM director Dheeraj Sharma.
Sharma has courted controversy over the past couple of years, with the ministry of education stating that he was wrongly appointed as the director and that he did not have the required educational qualifications. However, despite the ministry’s objection, the board of the institute extended his term for five years in 2022.
According to Dholakia, though, not all is lost. If directors, who have management skills and administrative experience, are appointed, IIMs can go in a course corrective direction, he said.
“Top corporate honchos are leading IIM boards. They have the knowledge and capability to bring in the best governance practices and appoint a director with a good mix of management education, know-how and administrative experience,” he added
(Edited by Richa Mishra)
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