Appointments of Public sector chiefs

Why in news?

The petroleum ministry’s proposal to appoint chairman and managing director of ONGC with just a year’s validity is illogical.

What is the recent appointment about?

• The Public Enterprises Selection Board (PESB) had shortlisted nine candidates for the top job, but Petroleum Ministry has chosen one of its own choice.
• Petroleum ministry also had sought the approval of the Appointments Committee of the Cabinet (ACC) for this appointment initially for a year.
• During which the ministry will conduct quarterly performance appraisal of the new recruit before seeking a fresh mandate for further employment.
• It is a classic example of all that is wrong with senior-level appointments in public sector companies.

What are the issues with appointments?

• Various stakeholders -Appointments to top positions in PSUs are lengthy and complicated process,
• It involves various organisations such as PESB requiring clearances from the administrative ministry, Central Vigilance Commission and finally the ACC.
• Delayed appointments-These layers often delay the appointment.
• There have been several instances of the appointment panel finalised by the PESB being scrapped without reason, delaying the process further.
• Lack of foresight -There have been several cases where it initiated the selection process barely days before the current CMD was due to retire.
• Political interventions - Large number of politicians affiliated with the ruling party are appointed as independent directors of various PSUs.
• The question is how a politician with no experience in the core competence of the PSU concerned will add any value to the decision-making process.

What should be done?

• There is a clamour for giving longer tenures to heads of public sector units so that they can make a meaningful contribution.
• The decision of petroleum ministry beats logic of appointment of chiefs.
• The government needs to institute a new process that incorporates the best practices for the selection of the leader of a public sector undertaking (PSU).

Source: Business Standard