IndianOil set for board revamp as govt proposes four MD positions

New Delhi: The government plans to recast Indian Oil Corp's board by introducing four managing director (MD) positions, replacing the current structure that has none, according to people familiar with the matter.

Indian Oil, the country's largest refiner and fuel retailer, currently has a sanctioned strength of eight functional directors, including an executive chairman, besides independent and government nominee directors.

The oil ministry has proposed reducing the number of functional directors to five by eliminating separate director posts for HR, pipelines and R&D. Functional directors are part of the company's management.


The proposed structure comprises an executive chairman and four managing directors—for finance, subsidiaries and alliances; refineries and pipelines; strategy, planning, business development, HR and R&D; and marketing, the people said.

The oil ministry has argued that bringing the R&D function under the MD (business development) would accelerate the commercialisation of innovations, the people said. The proposal, under discussion for several months, will require approval from the Appointments Committee of the Cabinet (ACC).

While the director (HR) post is currently filled, the positions of director (pipelines) and director (R&D) have remained vacant for about a year and four months, respectively. The vacancies have not been filled as the government plans to abolish these posts.

Some company executives said the prolonged vacancies affect decision-making in these functions.

The oil ministry and Indian Oil did not respond to ET's queries.

Indian Oil chairman A S Sahney had, however, previously told ET that having a director for a specific division was "not important at all". "My directors are the directors of Indian Oil. They should not be directors of one division or other division."

One executive pointed to another challenge: the incumbent director (business development) may not automatically be equipped to oversee the R&D portfolio, as the selection process for that role may not have assessed candidates against the eligibility criteria prescribed for director (R&D).

Executives also argue that strategy and business development, HR and R&D require distinct expertise and leadership, and that combining these functions under a single board member could dilute focus.