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Regulation
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Alternative Energy / Fuel
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Market Watch
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Companies
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Press Release [FREE Access]
Petro Intelligence » Disturbing Truth: No One Good Enough To Fit The Bill

By R. Sasankan 

Head hunters have a tough job on their hands when they set about looking for replacements for competent leaders who have managed massive state-run organizations. The process is usually fraught - and it is hard to match talent with the rigorous criteria set out for picking the right man who can occupy the hot seat.

The criteria include a mix of technical expertise, performance record in responsible positions and an intangible mish-mash of soft skills and traits. The selection committee carries out rigorous interviews and then determines whether the aspirant to the top job has all the attributes to become the next leader.

At the end of a rigorous process, the selection committee will usually throw up a short list of candidates for the position and the government of the day then picks the person in whom it has the greatest confidence.

But what happens if no one fits the bill?

A piquant situation has now arisen that has cast a shadow of uncertainty over the process of finding a new leadership at the state-run petroleum companies.

Recently, The Economic Times reported: "The Public Enterprises Selection Board (PESB) has rejected all the candidates it interviewed for the top job at state refiner Hindustan Petroleum Corp Ltd (HPCL)... (this is) the third instance where it has turned down all applicants for the CEO's role after ...Oil and Natural Gas Corp (ONGC) and Indian Oil in the past three years."

The inability to find a crop of new leaders from a gaggle of senior director-level aspirants in the petroleum industry is as disturbing as it is surprising. Most of the aspirants to these positions had gone through as rigorous a process of selection when they were picked for the positions that they currently hold. Why is it that no one was found fit to step up to the top position? After all, many leaders were picked in the past without any hassle.

History has a curious habit of repeating itself. But when the selection process for chief executives founders for a third time, there is a grave risk that people will start to question the selection process itself - and wonder whether it is descending into a dangerous farce. The situation isn't alarming just yet but the authorities will soon need to resolve this unexpected gridlock over fresh appointments.

What is particularly disturbing is that the failure to find a suitable successor allows the government to grant extensions to the current incumbent, thereby elongating their tenures beyond their dates of superannuation. Top appointments in the country have often raised eyebrows in the past and kindled suspicions about political interference.

India's state-run institutions were fortunate to have very illustrious leaders in their formative years - and there were rarely any questions raised back then about choices made by the administration. However, the process was vitiated by the 1970s. That is when there were dark mutterings in the corridors of power of how powerful connections and money had influenced the selection process. The buzz in the bureaucratic grapevine would be that a certain candidate had mobilized funds for the party in power or the concerned minister. Sometimes deals were cut too: the selected CMD or CEO would be obliged to reward his backers with lucrative contracts, which badly compromised the operations and the profitability of the PSUs. Cash-rich sectors like petroleum were badly affected by these appointment shenanigans.

A resourceful CMD could wheedle one or two tenure extensions. For instance, I know of a CMD of ONGC who wangled two such extensions in the 1980s. It wasn't easy to do; one had to have deep connections in the Prime Ministers' Office as they had to be endorsed by the Appointments Committee of the Cabinet, which is headed by the Prime Minister.

The latest round of tenure extensions seem to come from a totally different route. But it has also raised questions about why a farcical selection process was held in the first place if it had already been decided to give the current leaders an extension.

Normally, when there is a delay in selecting a new CMD, the sensible option is to hand over charge to the senior-most director in the company. This has happened several times in the past. But in the case of ONGC, Indian Oil Corporation and HPCL, the search committee appointed by the government could not find any suitable candidate for the top job. Result: the current incumbent got an extension purely on default.

This has led to the perpetuation of strange choices. ONGC - the upstream major - is headed by a superannuated CMD who spent almost all his life working in the downstream sector. Indian Oil Corporation CMD Shrikant Madhav Vaidya's term was extended because the selectors could not find a successor. His extended term is also due to end soon. And now, HPCL finds itself pitch-forked into a similar situation.

There were some strong candidates vying for the top job at HPCL. They included HPCL's refinery chief S. Bharathan and Indraprastha Gas MD Kamal Kishore Chatiwal. Four executive directors from HPCL and one each from Indian Oil Corp and GAIL also participated in the rounds of interviews. None was selected - which means the current incumbent is likely to secure an extension.

The Prime Minister isn't expected to know much about the pettifogging details that envelop top appointments.

Petroleum minister Hardeep Singh Puri, a former diplomat, is known for his integrity. But the sudden logjam over new appointments has triggered unhealthy speculation and muffled talk about favouritism, which can only have a very demoralizing impact on the PSUs. Like BPCL, HPCL has the reputation of being a professionally-run company. I have had the privilege of knowing some of its previous CMDs who were very thorough professionals.

If the head hunters do not find competent hands within the organisation or in other PSUs, they could have hired people from the private sector. This has happened before and there will not be any resistance from within. If the real issue is competence, then the trade unions will not object either. I do hope that Prime Minister Narendra Modi will turn his attention to the ills that surround the PSU selection process for top positions because the performance of these money-spinning state-run organizations critically depends on the sort of leadership that is in place.



To download the latest issue 'Volume 31 Issue 7 - July 10, 2024', click here
Petro Intelligence [FREE Access]
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Disturbing Truth: No One Good Enough To Fit The Bill
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Time To Go Big On Crude Oil Deals With Russia
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Time For India To Revisit Gas Policy
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Foreign Investment
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Rise And Fall In India’s LNG Imports
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India’s Rising LNG Imports
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Break-Up Of R-LNG, Domestic Gas Consumed by Major sectors Of Indian Economy
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Price Factor Influencing Gas Import Dependency
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Data Section
Monthly Upstream Data
Monthly Downstream Data
Historical database
Data Archives
Special Database
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Analysis Of Petroleum Products Consumption Trend In FY 2024-25
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India’s Export And Import Of Petroleum Products Decline In May 2024
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Analysis Of Crude Oil Processed In Indian Refineries In May 2024
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Sharp Decline In GRMs Of State-Owned Refineries In FY ‘24
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