Raising the retirement age to 70 will give greater scope for a second term and even a third term for directors.Until the Indian system is subject to greater market discipline and accountability, giving IIT directors a second or third term is unwise.IIMA has set the right example by limiting the tenure of the director to one term.
Over past year or so, three leading business schools in the US — Harvard, Chicago and Stern — have hired new deans. The oldest of them is 48.
Here in India, we seem to be moving in the opposite direction. The ministry of human resources development (HRD) has permitted the boards of IITs to raise the retirement age of directors from 65 to 70. This is a bad idea. The IIT boards would do well not to implement it.
Raising the retirement age to 70, it is said, will give greater scope for a second term and even a third term for directors. Some in the IIT system have argued that this is necessary as there is a scarcity of directorial talent.
Nonsense. There is enough talent within the country and among overseas Indian faculty willing to return to India — enough to fill the post of director in the 15 IITs we have.
We need younger leaders in this country, new leaders. One of the welcome changes in the Indian corporate world in recent years is that there are more young people at the top. Alas, other walks of life — politics, the bureaucracy, academia — have remained relatively immune to this trend. Academia must embrace this trend, not buck it.
That apart, there is a weighty reason for not having a higher retirement age and a second or third term for directors: in the IIT system (and also in the IIM system), there is very little accountability of directors. Lack of accountability of the director is the principal governance issue in our elite institutions today, not any supposed lack of autonomy.
Over the years, the boards of these institutions have failed to put in place adequate norms for accountability of the director. In the past couple of years, the ministry of HRD has tried very hard to bring this issue to the fore, but we are yet to see any results.
The contrast with top institutions in the US, the Mecca of higher education, could not be starker. Competition among educational institutions in the US is fierce, unlike in India where the leading IITs and IIMs face no worthwhile competition.The deans of these institutions are, therefore, subject to a high degree of accountability.
A failure to improve the faculty profile, the departure of faculty of stature, a fall in programme rankings, a decline in the quality of research — these and other failures could easily cost the dean his job. In India, it is possible for the director of an elite institution to sleep through his tenure without evoking any response from the system.
Until the Indian system is subject to greater market discipline — say, through the entry of quality institutions from abroad — and until a rigorous system of accountability is in place, it would be most unwise to give a second or third term to IIT directors.
The decision to extend a director beyond 65 would be based on the whims, not just of those in government, but those on the boards of these institutions. We must not forget that boards invariably tend to lean towards the incumbent. Those at the top know how to keep the board happy.
The IIMs, in general, have followed the healthy principle of a single term for the director, although there have been occasional departures at some IIMs (other than IIMA).
The man responsible for this convention in the IIM system was IIMA’s first full-time director, the legendary Ravi Matthai. Matthai was all of 38 when Vikram Sarabhai and his colleagues chose him as the first full-time director. (Sarabhai had been honorary director until then).
Even at the time that he was appointed, Matthai had indicated to Sarabhai that he would not like to stay on in the job for more than five to seven years. His contract, however, did not stipulate any term. Power is addictive. Matthai could have changed his mind and stayed on as director until retirement.
He did not do so. At 45 and at the peak of his fame, he chose to step down, having put IIMA firmly on the map of the country as a centre of excellence.
Matthai argued that as institutions evolve, a change in leadership is required as otherwise, a system can get too set in its ways. My own sense is that he was also alive to the dangers inherent in a director’s staying on for too long in a system where the director had sweeping powers but was subject to very little accountability.
At IIMA, having asingle term for the director has been crucial to preserving the culture and processes that Sarabhai and Matthai created. It has been an important factor in IIMA retaining its position of pre-eminence in the country.
IIMA has adhered to this convention for the past four decades. (Those seeking to have it overturned have run into the argument to end all arguments: if the great Matthai could step down after one term, why should anybody else continue?). But not all the IIMs have remained true to it.
The government would do well to codify this convention for the IIMs and extend it to the IITs as well. Not only must the IIT director retire at 65, he must stay only for one term. Where accountability is ill-defined, limiting the director to one term is eminently desirable.
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