On succession plan for public sector units

Centre yet to identify candidate to head IOC


Mumbai, June 22 The Centre has still not zeroed in on a candidate to take charge as Chairman of IndianOil even though the office has been lying vacant for four months now.Mr S. Behuria's tenure came to an end in February when it was widely believed that he would get an extension till he turned 60. The acting Chairman, Mr B.M. Bansal, who is also Director (Business Development), is scheduled to retire in January.In fact, most of his colleagues on the IOC board are nearing their retirement and will be making an exit over the next 12-18 months. Effectively, this means that none of them can take charge as Chairman since they would at least need two years remaining in their tenure to qualify.For instance, the Director (Human Resources), Mr V.C. Agrawal, will be retiring next month while the Director (Finance), Mr S.V. Narasimhan, is due to retire in April 2011. The Director (Refineries), Mr B.N. Bankapur, follows soon with the Director (Marketing), Mr G.C. Daga, retiring in September 2011. The Director (Pipelines), Mr K.K. Jha, is scheduled to step down in January 2012.

Top priority
The top priority, of course, is filling up the Chairman's post and names of potential candidates have been doing the rounds for months now. These included Mr S. Roy Choudhary, Director (Marketing) of Hindustan Petroleum Corporation, now due to take charge as Chairman and Managing Director of the company. The other was Mr R.K. Singh, Director (Refineries) of Bharat Petroleum Corporation who, in all likelihood, is the company's next CMD.More recently, other names have been added to the list including one from a top private sector oil company and another from a PSU. It is this long wait that has had people within IOC wondering what is in store for the maharatna.“It is not as if work has stopped as a result but it would be a great help if it is known who the next Chairman is,” sources said. In fact, the delay has led to questions being asked on the entire process of denying extensions to CMDs. What began with the late Subir Raha continued with Mr S. Behuria and, if rumour mills are to be believed, also with Mr Ashok Sinha of BPCL, which apparently prompted him to call it a day. Incidentally, both Mr Behuria and Mr Sinha are graduates of the Indian Institutes of Management.

Within oil industry circles, officials wonder why no interview for the IOC Chairman's post was called earlier when it was known that the vacancy would fall in February. “The pattern of not having a succession plan in place is just becoming the norm in the public sector,” they said.The reason why IOC's case is often highlighted is that it is India's largest oil refining and marketing company which is now getting into a host of other areas such as exploration and production, and petrochemicals. “The need of the hour is to have an able captain who will be around for a few years to steer the ship,” sources said.

Ideal age
It is again on this subject that questions arise on the ideal age of the Chairman. Overseas, some of the biggest names have Presidents who are in their late 60s and even their 70s with the idea of putting their experience to optimal use.The downside to this is that in a country like India, such a move could effectively deter any youngster of staying on in a company for too long.“Any new recruit aspires to be a CEO one day. If he/she figures out that will never happen despite their competence, they would just pack up and leave,” an industry observer said. For a company with nearly 35,000 employees, that is the last thing IOC would want.
….by…Murali Gopalan / The Hindu Business Line