IIM Act: Committee Recommends Govt. to Retain Authority to Offer Guidelines

Published: | April 30, 2018
IIM Act: Committee Recommends Govt. to Retain Authority to Offer Guidelines
  • According to the new law, all 20 IIMS have the power to appoint new directors, board members, and chairpersons.
  • Earlier, the director of the institute was appointed by the Board itself with a prior approval of the ACC headed by the Prime Minister. 

The directors of the Indian Institutes of Management (IIMs) have raised their concern over the renouncing complete government control under the IIM Act. A committee that had been set up for drafting new rules, suggested that the HRD Ministry must retain the powers to provide directions and guidelines to the institutions in case they were found violating the new law.

The new law came into effect from 31 January 2018. According to the new law, all 20 IIMs have the power to appoint new directors, board members, and chairpersons. Earlier, the director of the institute was appointed by the Board itself with a prior approval taken by the Appointments Committee of the Cabinet (ACC) headed by the Prime Minister.

However, around six new IIMs that have recently been established in different parts of the country have expressed their concern regarding the issue. According to these institutes, surrendering the government control would question the accountability of these institutes. An eight-member panel headed by the chairperson of IIM Sirmaur was entrusted with the task by the ministry to provide their suggestions and opinions regarding drafting the new rules. The ministry is expected to draft new rules on the basis of these suggestions.

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The newer IIMs are worried that the enhanced autonomy will be abused by the Board of Governors (BoG). According to the IIM Act, BoG can be self-appointed by the institutes and this may lead to a self-perpetuating trend. In order to overcome this conflict, the committee has recommended that no member of the BoG should be allowed to retain membership for more than two terms i.e. 8 years. The committee has also added that an age limit of 74 years should be implemented for chairman and members of BoG.

According to the new rules, if there is any conflict of interest between the IIMs and the Board Member(s) after the nomination, then the chairperson/ board member will have to separate himself/ herself from the discussion regarding the agenda of that interest. Various Directors of IIMs have also asked that a rule be introduced where no director can be dismissed without the approval of a two-third majority of the board’s strength.

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The new suggestions if accepted by the ministry will provide HRD Ministry with a power to intervene in case any of the institutes are found violating the law to the provisions of the Act. The decision of autonomy to be granted to 20 premier management schools under the IIM Act was a source of tension between PM and HRD Ministry in 2016.

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