Questions of autonomy

The effectiveness of the IIM Bill will lie in the fine print

The 20 Indian Institutes of Management (IIMs) enjoyed a victory of sorts in the shape of the Bill that the Cabinet approved earlier this week granting them greater autonomy than the contentious 2015 Bill drafted during Smriti Irani’s tumultuous stint as human resource development (HRD) minister. The 2017 version of the Bill makes a great leap forward, following some constructive intervention by the Prime Minister’s Office, in reducing the scope for government interference in the functioning of these premier institutes of management education. The Bill, under Prakash Javadekar’s ministership, provides IIMs, registered under the Societies Act, powers to grant degrees instead of diplomas and has dropped the troubling reference to the post of “Visitor” – the President of India, in this case — with powers to approve all top appointments and hold an enquiry into their functioning. 

Under the broad contours of the Bill that is expected to be tabled in Parliament in the upcoming Budget session, the IIMs will be board-driven with the chairman and director selected by the board. Previously, these appointments, together with the fixing of course fees, were subject to government approval. The Cabinet press release said the IIMs would be provided “complete autonomy” and “adequate accountability”. The latter is mostly courtesy a 33-member “coordination forum”. This, too, had been a point of contention in the earlier Bill but the latest edition stipulates that the HRD minister will not be its convener, and its chairperson will be selected by a search-cum-selection committee. Earlier stipulations about reservations in teaching posts have also been sensibly dropped.

The broad provisions of the new Bill are a distinct improvement, and some IIM administrators have accorded it a cautious welcome. But much, as always, depends on the fine print. The questions that arise here lie principally in board appointments and the nature of the “coordination forum”. On the board, the Bill provides some restrictions on its composition, in that it must comprise 15 members, three of them women and five from the alumni community. The bigger issue, however, is a chicken-and-egg one: Who appoints the members of the IIM boards in the first place?

Drawing on corporate experience, boards are appointed by the promoters and the management. Given that most of the IIMs are financed by the government, it would be difficult to argue that the government be excluded from the board appointment process any more than the IIMs can be excluded from oversight by Parliament and the Comptroller and Auditor General. The question may be less of a problem for the older IIMs, which have established some degree of financial self-sufficiency, but will remain an open question for the 13 newer ones. It is possible that the “coordination forum” will play a role, in which case some specific disabling clauses may be required to ring-fence the board appointment process from political intervention. This suggests that the stipulations on the composition of the forum remain critical, too. In allowing the IIMs to prepare themselves for the challenges assailing management education in an ultra-globalised world, this Bill is a good starting point. The proof of its success may just lie in governmental abstinence from interference than in any legislative provision.