Thursday, January 10, 2013

Peer evaluation for IITs, IIMs

The IIT Council has said that all IITs will be subjected to evaluation by peers every five years, TOI reports. Apparently, the government intends a similar review for IIMs. I welcome the move- I had myself advocated external audit of the IIMs in my book on Ravi Matthai- IIMA, Brick by Red Brick, published in 2011.

An external audit is required for two reasons. One, we do not have sufficient competition for the IITs and IIMs and, therefore, it cannot be left to market forces to arrive at a judgement, reflected in applications for admissions. Given the acute scarcity of quality colleges in engineering and management in relation to demand, the market cannot be expected to deliver judgement. An alternative mechanism would be the Board of Governors of IITs/IIMs but this mechanism has simply not functioned. One reason is that those appointed to these boards have very little stakes in the institutions and cannot be expected to devote the attention necessary to keep management on its toes. Besides, for the Board itself to monitor effectively, an effective market for higher education needs to exist; as mentioned, it does not.

As a result of poor monitoring, the IITs and IIMs today are places where there are few checks and balances on the office of director. The scope for discretion is enormous and there is virtually no accountability. Whether a director performs or not performs, whether he abuses office or not has no bearing on his completing his term and even getting another term.

This is an unhealthy state of affairs. All public institutions should be accountable- in the case of the IITs/ IIMs, directors as well as faculty. And such accountability can be established only through an independent management audit. Indeed, the principle of independent audit needs to be applied to regulators and other public authorities, such as RBI, SEBI, the CAG, CEC, etc. No public institution should be beyond the pale of public scrutiny of their activities, decisions and performance.
 
The modalities of the independent audit are important. It appears the expert committee will be chosen by the minister of HRD from a panel of 10 names submitted by the Board of Governors of an IIT. This is not the most desirable state of affairs. The Boards cannot provide names for the audit panel because the boards themselves need to be audited. It would be better to create a collegium of distinguished academics (including NRIs) who would propose names to the ministry.

Secondly, the audit must not be based on meetings with top management of IITs/IIMs or on published documents alone. The audit panel must meet all stakeholders: faculty, students, staff, alumni, the corporate world. Not only the actual outcomes (placement, publications, number of doctorates, etc) need to be reviewed but the internal processes and important decisions. It should be open to any faculty member to submit written documents for consideration by the audit panel. It is only by shining the light on the internal processes and governance of these institutions that improvements can be brought about.

Lastly, the audit reports must be placed in the public domain. In today's world, we can expect the reports to be commented on not only in the mainstream media but also in the social media. Audit and disclosure are the keys to accountability at public institutions.

It is striking that the gurus of governance at the IIMs did not think of subjecting themselves to a peer review all these decades; it was left to their bete noire, the ministry, to initiate this proposal. 

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