Monday, October 27, 2008

Bhargava committee report- at last!

I was getting a little fed up with the tit-bits about the Bhargava committee report on IIMs appearing in the media, so it was a pleasure to finally get hold of the report and read it in full.

Let me highlight what I believe are the most important recommendations:
  • Creation of a pan-IIM Board: It will have 15 members, 5 of whom will be government nominees and the others persons of eminence, including IIM alumni. The chairman will be appointed by the PM. This will be the principal goal-setting and monitoring mechanism for the IIMs. It will approve IIM business plans and review performance every two years.
  • IIM boards to have powers to select director, set fees and propose chairman's name to pan-IIM board.
  • IIM boards to be reconstituted and comprise 11 members (instead of the present 25 or so). Initial board appointments to be made by ministry, subsequent vacancies to be filled by boards themselves.
  • Appointment of faculty on contract basis with the freedom to pay market-related compensation.
  • IIMs A, B and C to increase PGP intake to 500 by 2011.
  • Consulting income of faculty to be limited to 15% of salary
There are many other recommendations and observations. The report requires detailed treatment.

My immediate response is that the creation of a pan-IIM board is a constructive suggestion. The committee observes that with responsibilities being divided between the ministry and the Boards, accountability has become a casualty. In the ministry, officers keep changing and managing six IIMs (with several more to come) is well nigh impossible. The Boards themselves, the committee notes, have not lived up to their monitoring role for a variety of reasons mentioned in the report (one being the perception in the Board that it's the ministry that finally calls the shots).

So some mechanism for setting objectives and monitoring performance in the IIM system is required. A pan-IIM board with the secretariat housed in the ministry is the proposed answer. One of the ticklish issues to be sorted out is the demarcation of roles of the pan-IIM Board and the IIM Boards.

The report says that the pan-IIM Board should not be involved in day to day management of the IIMs. Well, nor should the IIM Boards. A Board's role is primarily in the areas of strategy and monitoring of performance- and both these responsibilities will now be vested in the pan-IIM Board. So, will the IIM Board be confined to selecting the director and other members of the Board and giving approvals to financial proposals that exceed limits delegated to the director?

The reduction in the sizes of IIM boards to more optimal levels is welcome; so also the proposal to limit board memberships to a maximum of two terms of three years each. To me, the puzzle is that the IIM fraternity itself did not make these proposals all these years. Did it require a government committee to make these eminently sensible suggestions?


Shalender Birla said...

How pan-IIM board members (other than govt nominees) will be selected?

Pal Sin said...

Secy (HRD) will be making the appointments.

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