Thursday, October 14, 2010

IIMs given freedom to set up centres in India, abroad

The Centre has decided to unshackle Indian Institutes of Management (IIMs) by giving them freedom to set up centres within the country and abroad. This is one of the slew of decisions announced by the Ministry of Human Resource Development (MHRD) to give greater autonomy to the business schools.

At the same time, HRD minister Kapil Sibal stressed that greater autonomy must be accompanied by commensurate accountability. Decisions operationalising autonomy and accountability were announced by Mr Sibal at a meeting with the chairpersons and directors of IIMs on Wednesday.

The IIM autonomy package includes giving the board of governors full powers to create posts in keeping with approved norms, the right to amend rules of IIM within the framework of memorandum of association and rules, the power to acquire and dispose property, which has not been fully or partially funded by the ministry, powers to approve their own budget, and the freedom to manage the funds generated by IIMs.

In return, greater accountability has been demanded of IIMs. It was agreed that the faculty, the director and the board of governors should take steps to prepare annual action plans and key performance indicators at each level. Greater accountability would require greater transparency from IIMs.

In keeping with the reform agenda, the meeting considered reports of committees set up at the meeting in April in Bangalore. Three committees had been set up, committee on new governance structure for IIMs chaired by R C Bhargava, Chairman IIM, Ranchi; committee on faculty and research at IIMs chaired by Ajit Balakrishnan, Chairman, IIM, Calcutta; and committee on fund raising by IIMs chaired by Hari S Bhartia, Chairman of IIM, Raipur.

As suggested by the Bhargava Committee, it was agreed that the number of board members be reduced to 14 from 26. The board of governors would now be required to have adequate membership of the IIM Society, government, faculty and alumni.

To ensure better governance, it was decided that IIM societies should have long term members who take continuous interest in the running of IIMs. A monetary pre requisite for membership of the society, about Rs. 20 crore (Rs. 200 million), was suggested. Mr. Sibal turned down the suggestion on the grounds it would restrict membership to the moneyed and created vested interests.

The norms for membership will have to be worked out. As part of the greater autonomy, the boards will now be given the power to select the institute’s director. The board of governors will suggest three names and the Centre will appoint one of them as director. It marks a return to the older practice, discontinued during the NDA rule.

Source: The Economic Times, October 14, 2010
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