IN A series of dramatic events, the board members of the country’s topmost business school, Indian Institute of Management, Ahmedabad, met online on November 11, 2022, and after two rounds of ‘anonymous voting’ edged out its incumbent chairman, Kumar Mangalam Birla, who not only was willing to continue, but even the Union government wanted him to stay on for one more year at the helm. Birla’s term was set to expire four days later on November 15, 2022.
The IIM-A’s governing council appointed Pankaj Patel, Chairman, Zydus Lifesciences Ltd, as its chairperson, by making a point that the Centre’s proposal to give a one-year extension to incumbent Birla “may not be legal for us”, The Indian Express has learnt.
Birla, Patel and the Union Ministry of Education declined to comment on the matter.
Birla’s term at IIM-A was to expire on Nov 15, 2022
During mid-2022, the Union Ministry of Education had written to 18 IIMs (whose chairpersons’ terms were to end during the year) requesting them to extend the tenure of their existing chairpersons by one more year. Another letter to the IIMs sought suggestions on fresh ways to form a search-cum-selection committee to pick a chairperson.
Records seen by The Indian Express show that on September 24, 2022, the IIM-A board met and its members were of the view that “if we extend the tenure of the current chairperson without formation of search-cum-selection committee then it will not be legal for us”.
“It is suggested that we should form a committee today and then we will decide whether the appointment should be for one year or four years. If we form a committee, then we are not in violation of the process and meanwhile the chairman can interact with the Ministry,” said the minutes of the meeting.
The representative of the state (Gujarat) government said the committee would be formed as per the IIM Act. “…whether we should appoint the Chairman for one year or four years is the board’s prerogative. But as a letter comes from MoE, we should take that also into consideration,” the state government representative noted.
In the IIM-A board, Gujarat is represented by its Principal Secretary (Higher & Technical Education), and the Union government is represented by the Joint Secretary (IIMs).
Accordingly, under IIM Rules 2018 section 3, sub-section III, a five-member committee was formed which included Zydus Lifesciences’ Patel. But the composition of the committee was later changed, with Patel recusing himself. The committee recommended the names of Patel, Kotak Mahindra Bank CEO Uday Kotak and Mahindra Group Chairman Anand Mahindra as possible candidates for the chairperson’s position.
Sub-section VII of the rules state that apart from the names submitted by the search-cum-selection committee, the board may consider the “name of the current incumbent provided the current incumbent has not completed two terms”.
In this case, sources said Birla was eligible not just because he had completed one term, but also because “he was willing to have another term”. “On top of that, the government communique also said that IIMs may consider giving the incumbents a year-long extension. But the IIM-A board decided to follow the IIM Rules, 2018, and give Birla a chance along with others,” said a board member, who did not wish to be named.
The rules also state that the selection of the chairperson shall be made with the consent of at least two-thirds of the members present and voting, and more than 50 per cent of the members in a special session to be convened at least 30 days prior to the completion of the tenure of the current incumbent.
However, Patel’s selection took place only four days prior to the completion of the tenure of the current incumbent. On the day of the appointment, out of 15 members, including Birla, 13 attended the meeting.
Sources said Patel’s name was finalised following anonymous voting among the board members who met virtually on November 11 during which Birla, Kotak and Mahindra were edged out of the race.
“There was anonymous voting on four names including that of Birla’s. Birla himself recused from voting and so did Patel. To become chairperson, a person needed at least eight of 11 votes. In the first round, no one got the requisite number of votes. Those with less votes were eliminated. In the second round, Patel came out on top,” the source said.
The development comes at a time there is a brewing tension among the government and the IIMs with the Ministry of Education also writing to IIMs seeking suggestions on drawing up a new procedure for setting up the search-cum-selection committees involved in the appointments of chairpersons.
“As you are aware Section 3 of the IIM Rules, 2018, deals with the appointment procedure of Chairperson of the Board of Governors of IIM. Formation of a Search-cum-Selection Committee (SCSC) is an essential prerequisite for that. The present tenure of Chairperson of many IIMs shall be over by the end of this year. The Ministry is getting suggestions regarding the way such SCSCs can be formed. Keeping in view the importance of the position of Chairperson of the IIM in the Higher Education ecosystem of the country, it may be beneficial to have suggestions of all IIMs. Accordingly, it is advised that we undertake the above consultation before finalising the SCSC for Chairperson,” Higher Education Secretary K Sanjay Murthy had written in a letter to the chairperson of all the IIMs on June 27, 2022.
