Minting One-Sided Coins

Each IIM is registered under the Societies Registration Act of 1860. But the constitution of individual societies is not similar across IIMs. Each IIM society constitutes a board of governors, which tends to be large (26-28 members) and pluralistic in representation. The board oversees the functioning of an institute within a bicameral structure, with the second ‘camera’ comprising faculty members and dealing with academic matters.

In some IIMs, such as the one in Calcutta, rules explicitly recognise this bicameral nature and a faculty council discusses and ratifies all major decisions before sending it to the board for consideration. In others, the process of faculty consultation in matters related to academe is the norm. In effect, most IIMs are, if not de jure then de facto, governed by the faculty.

In adopting a bicameral structure, IIMs follow international and domestic best practices, premised on two fundamental principles—academic freedom and peer evaluation. Academic freedom is absolutely central to healthy academe for it underpins the contestation of ideas. This is not to say that academics are not prone to group-think—far from it. But there always will be somebody to point out the intellectual sloppiness of group-think.

And it is at the door of this bicameral governance structure that the Bhargava committee lays all the blame for the IIMs’ supposed ills. The committee argues that ill-defined “ownership” structures make for ineffective management, which is compounded by weak boards. I use the word ‘supposed’ advisedly, because it is a very brief report (of seven pages) and there is no substantiation of purported deficits. Nor does it cite specific failures of bicameral governance.

It recommends a more unicameral structure by clarifying the lines of “ownership.” It chooses to do so in two ways. First, society membership, given a few caveats, should only be open to those willing to make substantial donations. As a result, society members will become “enlightened owners”. Second, it recommends that board sizes be reduced from 26-28 to 12-14 members and that they be armed with sufficient powers to be effective governors. In this context, it has argued for greater representation of alumni and less plural, more focused, boards with greatly reduced involvement of the government. Equally important, the role of faculty in governance is completely sidelined. The second recommendation (smaller and more empowered boards) has been accepted by the HRD ministry, while the first (of auctioning society membership) is under consideration. IIMs have been asked to amend their memoranda of association in that light. Therefore, whether or not the HRD ministry would like to privatise IIMs, it certainly believes that IIM governance should be corporatised.

Among the many deficits the Bhargava committee points out is an apparent lack of people with the competence to serve on IIM boards. Therefore, with breathtaking verve it suggests that whereas a board member’s term be for five years, there be no limit to the number of times a member can be reappointed. Once constituted, a board can perpetuate itself in perpetuity. Talk of barriers to entry and anti-competitive measures.

The committee does not contend with research that has established that bicameral governance has served the long-term interests of both academic institutions and society. It also disregards evidence that results of unicameral academic governance have been less than satisfactory. In short, the report is bad in theory and bad in practice. That is not to say that IIM governance should not be revisited. But any restructuring must retain its bicameral character and the public nature of the IIMs. The less said about boards that perpetuate themselves in perpetuity the better.

Finally, even if, for argument’s sake, we accept that the wise men (and there are only men) of the Bhargava committee are right about the way forward, why are they (or the ministry) so disinclined to debate this? The reports are not even available in the public domain. Why not have a wide-ranging public debate and once it’s validated, adopt it?

(The author is a professor of economics at IIM Calcutta. The views expressed are personal.)