Editorial. B school blues

The Indian Institutes of Management (Amendment) Bill, 2023, which claws back some powers for the government, is broadly a step in the right direction. It restores the governance of India’s top management institutes — 20 of them, built by the Centre — to the pre-2017 position, or before the Indian Institutes of Management Act was passed. The government will once again have a direct say in the appointment of the Chairperson, Director and Board of Governors (BoGs) and review their working. This is meant to correct a virtual breakdown in checks and balances in the IIMs post 2017. The BoGs had turned accountable to none, leading to confrontations between the faculty and administrators and considerable chaos all around.

The IIMs, particularly the earlier ones such as Ahmedabad, Bengaluru and Kolkata, have created a brand that is second only to the IITs. It is profoundly ironic that these B-schools should be under a cloud for the way their affairs are being run, even as they presumably teach ‘best governance practices’ to aspiring corporate top guns. Autonomy cannot be taken to mean the complete absence of accountability. Under the 2017 law, now amended, the Centre left the powers of appointment of the Chairperson and Director to the BoG, while virtually allowing the Board to select and review itself. Except for one IIM, none of the rest seems to have abided by the law in submitting a detailed account on the running of the respective institutes every three years. Reviews of the administration, being left to the board, cannot inspire confidence when the board is judge, jury and executioner. The performance of the boards is not audited. While the IIMs are answerable to CAG and Parliament, questions have been raised in the past, and not without basis, over the IIMs’ fee structure and the access provided to disadvantaged groups.

The recent Bill amends Section 10 and 16 of the IIM Act, 2017, to allow the government (or “Visitor”, the President of India) to appoint the Chairperson, approve the board’s appointment of the director and conduct its own inquiries into affairs of an institute. However, the provision that the “services of the director may be terminated by the Visitor” without the board being in the picture, seems a strong one. There are still just two government nominees on a board of about 15 individuals. Just two faculty members are picked by the chairperson to be on the board. This could have been changed to a rule where the faculty picks its own members. There is no transparency in the selection of five alumni members.

Control should not end up moving from an internal group to New Delhi. IITs and IIMs have enjoyed autonomy all these years in admissions, framing syllabi and recruitment of faculty, although there are rumblings of unease these days. But if the bureaucracy sticks to its tradition of not meddling in their affairs, the IIMs will be fine.  

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