TT Rammohan has an oped in Business Standard where he asks for a revisit of the IIM Act of 2017 which provided significant autonomy to IIMs by drastically reducing the government's role in their Boards and functioning.
The IIM Act has given a fillip to the erosion of faculty governance at IIMA. The leading IIMs had enjoyed considerable autonomy even before the IIM Act. The Act gave formal shape to such autonomy and enhanced it by leaving the appointment of the chairman and the director to the board. The crucial change that has come about after the IIM Act is that the government decided not to influence the working of the IIMs. The central government and the state government have one representative each on the boards. These nominees play a passive role where they used to be active. Earlier, faculty could expect the government to intervene if the chairman was unresponsive. Now, they have little recourse...We thus have a serious governance deficit in the IIM system. There is no meaningful accountability of the director or the board. The governance deficit needs to be addressed... the government must jettison its hands-off attitude towards the IIMs. Until such time as a regulator for higher education is created, the government will be required to play the role of umpire at the IIMs. The IIM Act must be amended to revert to the earlier position of four government nominees, two each from the central and state government. These nominees need not be from the Ministry of Education. The government may appoint qualified persons to represent it in the same way it appoints independent directors at public sector enterprises. Once the government nominees start playing an active role, comatose boards will spring to life.
The amendments were done in response to criticisms then that the government was interfering excessively in the functioning of IIMs. There were strong demands for autonomy. The intent of the Act was to limit the government nominees and its channels of control, in the expectation that the IIMs being institutions of repute and with people of management expertise would be better off managing themselves. The Board was allowed the power to appoint both the Chairman and Director of the IIM. It was also thought that having alumni nominees etc would strengthen the Boards and bring in greater accountability. Finally, the belief was that unaccountable exercise of power by governments through their nominees should be curbed and replaced with accountable exercise of power by autonomous Boards, and the governance of IIMs would improve.
But in reality, it appears that the autonomous Boards, with only a passive role by government nominees, have failed to be responsive or accountable. While the government exited, the Boards failed to step up. As Rammohan says, they've become "comatose". Therefore, he's now demanding a restoration of the more active engagement by the Government, including restoring the old number of four nominees of the government!
At the outset, I think the decisions taken by the government through the IIM Act 2017 remains good. And its broad direction should be continued and deepened. We should allow it to play out over a longer time and intervene to address egregious failures.
Some observations:
1. The issue also highlights the complex nature of state capacity building. Ideas like autonomy work effectively only when the systems have the capacity to absorb the autonomy. Else, the cure can become worse than the disease itself, at least initially.
2. Interestingly, opinion makers become very critical of failed policy actions (as in the case of an institution that we have imparted autonomy), but overlook those which are failures due to inaction (as with so many of our own institutions that have poor or no governance even with all government nominees etc). The latter is fine, but the former is excoriated.
3. These experiences have the potential to create a double whammy. One, they reinforce the entrenched opinions among officers/politicians about the need for active government role. Second, they also makes it difficult for officials in future to suggest such reforms.
4. This is also a lesson on the limitations of principles-based or non-prescriptive reforms or regulations in the Indian context. For example, the autonomy guidelines did not mandate the mode for appointment of the two faculty nominees to the Board nor the norms for appointment of the dean nor did it tightly prescribe the norms for appointments of Board members. It was thought that broad principles and wisdom of the Boards will take care of these. The result is that some Directors started to use their discretion to make unwise choices. And the Boards failed to hold those Directors accountable for their actions.
5. Opinion makers cry hoarse at government intervention arguing for greater alumni representation in Boards to ensure greater accountability. As can be seen with this experience, these are all noble-sounding ideas. But in reality they are just that, noble-sounding ideas with little substantial relevance.
6. Another idea that modern management theories advocate is the use of transparency enhancing measures to improve accountability. For example, management theories consider making mandatory (or pro-active) disclosures on websites, conducting independent performance audits/evaluations, having performance MoUs and their reviews etc as accountability enhancing measures. Accordingly, the IIM Act too contained the provision for the IIM Boards to evaluate the performance of the institute once in three years through an independent agency, submit an action taken report to government, and place the report in the public domain. But, it now appears that no IIM has conducted such reviews.
For sure, all of these ideas have their uses and should be implemented. But, in environments where lack of accountability and whimsical decision-making is the default norm, we should not expect these measures to make much difference. Most often, they are likely to be ignored by the audience. There cannot be a substitute for some form of traditional top-down governance.
No comments:
Post a Comment