The Centre has notified the new rules for the Indian Institutes of Management (IIMs) under which the President of India will now be the ‘Visitor’ to all these premier business schools with powers to appoint the chairperson of the board of governors and the appointment and removal of the directors.

According to the new rules, the ‘Visitor’ will also have the power to “dissolve” the board for its inability to perform its duties, persistently defaulting in complying with any direction given by him/her, and in public interest.

The Indian Institutes of Management (Amendment) Rules, 2023, which have been brought to further amend the IIM Rules, 2018, were passed in Parliament in July this year. The new rules, according to the old IIMs, dilute the autonomy these institutes enjoyed until the amendment was made.

The union ministry of education (MoE) issued a gazette notification to this effect on November 10, specifying the rules in detail.

The President will have the power to nominate the chairperson of the board of governors, which is the principal executive body of an IIM. The board has the power to appoint search panels for appointments of new directors, make policy decisions, approve annual budgets, and determine fees.

“If the Visitor is not satisfied with the panel of names recommended by the Board, the Board shall get a fresh panel of three names recommended as per the provisions of sub-section (3) of section 16 of the Act, through the same search-cum-selection committee or a fresh search-cum-selection committee,” the rules stated.

Previously, a search-cum-selection committee comprising five eminent persons was chosen from among administrators, industrialists, educationists, scientists, technocrats, and management specialists to be constituted by the board for this.

“The Visitor may, by order, dissolve the Board and appoint a person or persons as the Chairperson and members of an interim Board, as the case may be, for such period, not exceeding six months, and direct them to exercise powers and discharge functions under the Act,” the notification said.

Earlier, no such clause for the dissolution of the board existed.

Also, the ‘Visitor’ will have the final say in the appointment of the director of any IIM. There are 21 IIMs across the country.

“The Visitor shall nominate one of the names recommended by the Board and send the same to the Board for appointment of the person as Director: Provided that where the Visitor is not satisfied with the names recommended by the Board, he or she may ask the Board to make fresh recommendations,” the notification read.

Until the new rules were made, the board used to be solely responsible for the appointment of the institute’s director. The President now has the power to “terminate” the services of the director.

“Notwithstanding anything contained in any of the clauses of this sub-rule, if the Visitor decides that the services of the Director may be terminated or the Director may be relieved from the services of the Institute, the Board shall be bound to follow the decision of the Visitor,” the notification stated.

Under the 2018 rules, the board alone had the power to remove the director with two-thirds of the members present and voting and more than 50% of the members of the board.

According to the new norms, the educational qualifications of an IIM director are also clearly specified, replacing “distinguished academic with PhD or equivalent”, with “distinguished academic with first class degree in both Bachelor’s and Master’s level, and with PhD or equivalent from a reputed institute”.