At Indian Oil, R&D chief will not lose board seat

Indian Oil Corporation (IOC) has withdrawn its proposal to the government to eliminate the board seat for the company’s research & development (R&D) head after stiff opposition from within the organisation, said people familiar with the matter.

The company has conveyed to the government that it changed its mind after receiving wider feedback on the proposal, they said.

Indian Oil Corporation did not respond to ET’s request for comment.

At present, the R&D chief is a director on the board of the company and is appointed by the Cabinet Committee for Appointments. IOC had proposed to reduce the profile of the R&D chief to the level of executive director and merge the R&D unit into some other division of the company. The company had then argued that it would lead to a leaner structure and faster decision-making.

“The argument wasn’t very convincing. You need to empower R&D for effective outcomes, not put them under somebody who may not understand it very well,” a person with direct knowledge of the matter said on condition of anonymity.

At a time when research and innovation are becoming critical to energy companies, IOC’s move to curb the independence of the R&D unit and disempower its chief was a little surprising, said the person.

The members of the R&D unit are understood to have made representations to the government, challenging the proposal, and arguing why an independent and empowered R&D unit was needed. The company, which has a sprawling R&D centre at Faridabad in Haryana, has filed more than 1,500 patents so far. Its researchers have been contributing in various areas from lubricants to refineries, petrochemicals, hydrogen fuel cells, batteries, bioenergy and nanotechnology.IOC had also recently proposed to the government to redesignate its top executive as chairman and managing director (CMD). The proposal is yet to get the petroleum and natural gas ministry’s approval. At present, the company has only a chairman and no managing director. The chairman has all executive powers.

Mostly, state-run companies have CMD as their top executive. The government, however, recently appointed an executive chairman to the board of Oil and Natural Gas Corporation, who is not the managing director, in a break from tradition at the company. No MD has been appointed yet.