But recently the Union Oil Ministry has taken an interim decision to separate the post of Chairman and Managing Director or CEO. It is currently awaiting final approval from the Union Ministry of Corporate Affairs. If so, there will be a ‘historic’ change at the top of the largest state-owned oil company.
Incidentally, the chairman does not have much of a role in the day-to-day operations of the company. The Managing Director or CEO is responsible for overseeing the day-to-day operations.
To put it differently, the chairman is the most senior among the board of directors and the CEO or managing director is the top person in terms of the power of the company’s office bearers.
Under the chairman are usually the board members and under the CEO are the senior executives of the company. Outside of day-to-day operations, the chairman takes decisions on high-level policies and the managing director or CEO is responsible for implementing those policies through the company’s internal operations.
The current chairman of the IOC is Shrikant Madhav Vaidya. There are 7 more directors in the top management—finance, marketing, human resources, pipelines, refining, planning and business development and R&D. According to sources, the post of ‘research and development (R&D)’ director may be abolished. Because, this term is currently meaningless in terms of commercial criteria. Also no big company has a separate director for R&D department. As a result, this post will be abolished and the responsibility will be shared among other directors.
Incidentally, earlier the ‘Securities and Exchange Board of India (Sebi)’ had issued guidelines to separate the posts of Chairman and Managing Director or CEO of the company. However, last year, SEBI made a slight amendment to the directive and said that this rule is not mandatory, rather a company can do it if it wants.