The Indian Institute of Management Amendment Bill has rekindled questions of autonomy and independence of IIMs. The response to the bill has been somewhat mixed, eliciting both concerns and support. While certain quarters have pressed the panic button, others view it as a necessary course correction to establish adequate checks and balances within the existing system, which previously granted “too much” autonomy to these institutions.
The discourse surrounding the bill has drawn on past experiences and established frameworks to assess its potential implications. The question of autonomy goes hand in hand with the issue of accountability. Some of it is internal to the organisation, and some of it goes out to the external environment as consequences of failed accountability. Relying solely on specific instances to argue either for or against the bill would lead to immediate counterfactual responses and devolve into whataboutery. Perhaps it’s a good idea to untangle this issue by focusing on principles of governance and understanding the chronology.
Autonomy and accountability
Before the IIM Act was enacted in 2017, the institutes were established as societies under the Societies Registration Act 1860. They maintained a general body comprising industry representatives, while a few board positions were reserved for members elected from the society. But apart from this token representation, the institutes largely remained under the government’s control. Appointments for key positions, including the chair and the director, were made by the government through an evolving process. Nevertheless, IIMs always enjoyed full operational autonomy in admissions, curriculum, pedagogy, fees, and placements. While overarching policies related to faculty compensation and retirement were benchmarked with the University Grants Commission (UGC), individual IIMs determined their workload and incentive structures, subject to approval from their respective boards.
Except for an intervention in 2003-04 by Murli Manohar Joshi, the Minister of Human Resource Development in the Atal Bihari Vajpayee government who wanted to regulate fees at IIMs, there was no other overt threat to the institutions’ autonomy, though the question of autonomy was always in the discourse. There were subtle undercurrents and murmurs when the 27 per cent reservation for Other Backward Classes (OBC) were made applicable to IIMs in 2008. However, these concerns did not come out in the open.
Where does this question of autonomy stem from? One major argument in favour of autonomy is that the older IIMs are financially self-sufficient and do not need the support of the State. Hence, the government control should be minimal. Another argument is that there has been a long tradition of these institutes being faculty governed. Both these arguments need to be questioned from the framework of accountability: Is generating enough revenue a strong reason for autonomy? So, should older IIMs have greater autonomy than the ones dependent on State funding? That does not seem like a strong argument. Autonomy is crucial regardless of funding arrangements, essentially because of the nature of IIM activities, which demand unfettered and open thinking, free from undue policing.
Equally troubling is the argument that IIMs have traditionally been governed by their faculty. How can interested parties govern themselves? Is this not a clear conflict of interest? Institutes being managed by faculty is understandable, but being governed by it is a difficult terrain.
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Need for strong boards
There does not seem to be strong evidence that the new amendments provide an accountability framework.
The weakest link in the IIM architecture has been the structure of the boards that traditionally had business leaders sitting in governance positions. Strong boards seek accountability from the director and faculty, and act as a buffer for the excesses of the State and guard the autonomy of the institution. When Joshi’s interference on the fee issue came up, it was the board that pushed back and negotiated with the government to allow IIMs their autonomy. Even in the current instance, if the IIMs had strong boards, the first voices of protests would have come from them rather than elsewhere. We see no protest from the boards on the recent bill as their powers are being chipped away.
Traditionally, the boards of IIMs have been filled with people who possibly do not have a good understanding of how non-hierarchical intellectual institutions work and with those who do not have enough time to invest because of their own business interests. In the past, the boards have had people from beyond the mainstream business domain—such as social entrepreneur Verghese Kurien and activist Ela Bhatt—who served as conscience keepers and asked for larger societal accountability. But their presence was more by coincidence rather than by design.
A self-perpetuating board without clear and diverse representation will choose people like themselves, which will reinforce the same stereotypes. A board comprising people with other significant interests and limited time, coupled with limited intervention from the State, would mean that the faculty (if empowered) or the director (if dominant) dictate the agenda.
While this self-interest leads to the institution’s growth and is better than the ministry sitting in judgement, it is still not ideal. An institution’s autonomy is not only used in pedagogy and curriculum but also in fixing fees and designing compensation structures. The latter needs greater scrutiny.
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More government control
Why are the amendments raising red flags at this time? Do they provide a better framework for accountability? The red flags are not because of the amendments per se, but because of the track record of the current political dispensation. While there are many escape clauses in all the legislations for exceptional situations, this political dispensation has tried to use them in non-exceptional situations. A case in point is the invoking of Section 7 of the Reserve Bank of India (RBI) Act to give directions to the central bank, which has never been used in the history of the legislation. The concerns about the IIM bill are certainly not unfounded.
With the amendments, the State is seeking powers to formally intervene, even though it has been all pervasive and chipping away at the institution’s autonomy. These interventions do not manifest in open orders, but as advisories that come with veiled threats. There are advisories for faculty members to declare their property as public servants do and regular advisories mandating the observance of events like International Yoga Day (with an obligation to upload the video of the function), and many more.
While IIMs must protest this creeping acquisition through an ideological capture, it is important to adequately address issues raised on their accountability. The board structure should undergo a significant reform to have a greater representation of the biggest stakeholders like the alumni and also the larger interests of the society, particularly from civil society organisations. It is also time for all IIMs to introspect and suggest a strong framework of accountability. If they are faculty governed, then it would be easier to provide that framework.
The author teaches at IIM Bangalore. Views are personal.
(Edited by Ratan Priya)