Why Not Review Work Of CMDs Of PSUs, Cut Short Tenure If Performance Not Satisfactory

In a strong pitch for performance-based accountability in Public Sector Undertakings (PSUs), Pradeep Kishan Yadav, former Executive Director (Gas) at Indian Oil Corporation Limited (IOCL), has advocated for regular performance reviews of Chairmen and Managing Directors (CMDs) of PSUs. Yadav, who dedicated 36 years to the oil and gas sector, contends that CMDs whose performance is found lacking should not be allowed to continue for their full tenure.

In a formal communication addressed to the Chairperson of the Public Enterprises Selection Board (PESB), and marked to senior officials including Union Petroleum Minister Hardeep Singh Puri, Petroleum Secretary Pankaj Jain, Principal Secretary to the Prime Minister Dr. P.K. Mishra, and DoPT Secretary Rachna Shah, Yadav has submitted what he terms the “Report Card” of G. Krishnakumar, the former CMD of Bharat Petroleum Corporation Limited (BPCL).

The move is being seen as a call for greater transparency and accountability in top PSU leadership roles. Yadav emphasized that CMDs heading multi-billion dollar enterprises must not be allowed to underperform or function without scrutiny simply due to the sanctity of their appointments.

“Regular, independent evaluation of CMDs based on key performance metrics, stakeholder feedback, and organizational outcomes should become a norm rather than an exception,” said Yadav. He also argued that many CMDs are appointed with significant fanfare but are rarely subjected to rigorous performance audits during their tenure.

The letter, now circulating among top government officials and PSU watchers, has sparked off a debate about reforms in the Public Enterprises Selection Board (PESB) framework and the possibility of introducing mid-term performance reviews or even termination clauses in case of sustained non-performance.

This intervention by a senior former executive from IOCL adds to the growing chorus advocating for improved corporate governance, professionalism, and merit-based leadership in India’s public sector ecosystem.

The letter written by Pradeep Kishan Yadav is given below for the benefit of the viewers of www.indianpsu.com –

Date: 19th May 2025

To,
Chairperson,
Public Enterprises Selection Board,
502, Block No. 14, PE Bhawan,
Lodhi Rd, CGO Complex, New Delhi – 110003.

CC to:

1. Sh. Hardeep Singh Puri, Minister, Ministry of Petroleum and Natural Gas.
2. Sh. Pankaj Jain, The Secretary, Ministry of Petroleum and Natural Gas.
3. Dr. P.K. Mishra, Principal Secretary, Prime Minister’s Office.
4. Ms. Rachna Shah, Secretary, Department of Personnel & Training.

Subject: CMD Performance Card Review — Cutting short tenure for poor/non -performance

Respected Madam,

1. Having spent more than 36 years of my life in the service of Indian Oil Corporation Limited, I retired as the Executive Director (Gas) of IOCL and have been closely acquainted with the workings of Indian public sector enterprises (‘PSEs’).
2. The importance of PSEs for nation building and meeting the goals of numerous stakeholders cannot be overstated. The Chairman and Managing Directors (‘CMD’) of the PSEs are at the helm of the PSEs and are supposed to steer the course of the PSEs in achieving their strategic objectives.
3. As such, it is not only the selection of the right person as CMD of the PSEs which is critical but a review of their performance at regular intervals is even more crucial to ensure the CMD is actually delivering on the performance and growth of the PSE.
4. Public Enterprises Selection Board (‘PESB’) is the empowered body for such selections, which has clearly defined the guidelines and procedure for the selections. The selection of the CMDs and others to the post of directors of PSEs is carried out by the PESB in accordance with such guidelines and procedures. However, unlike the selection, the post selection review of the CMDs is not as rigorous or transparent.
5. It is seen that many a times the CMDs who are selected spend their tenure without any effective decisions and steps being taken for the growth of the PSEs. In fact, the PSE languishes during their tenure and loses valuable time and opportunities. CMDs are often seen to be biding their time and avoiding taking crucial decisions lest their case be taken up by anti-vigilance bodies or worse still question on some decisions be raised by opposition party MPs in parliament. The CMDs thus prefer to sit back and enjoy the perks of their position and do their retirement planning rather than taking hard and effective decisions for the benefit of the PSEs.
6. And when such CMDs retire, they are lauded by the PSE employees as great achievers rather than being called out for their failures and lack of action.
7. Let us analyze the tenure of Sh. G. Krishnakumar, the CMD of BPCL who superannuated on April 30, 2025 in the above context.

a. PESB on December 12, 2022, select Sh. G. Krishnakumar for the post of CMD, Bharat Petroleum Corporation Ltd (BPCL).

b. Past performances as highlighted by media that were the basis of him being selected for the post of CMD are – customer centric initiatives apart from Patro Card, Smart Fleet, Speed, In & Out, expansion of the service dimension of the MAK brand of lubricants etc.

c. He took charge of CMD, BPCL in March 2023 after having been associated with the company for 36 years and held the post for over two years.

d. During his tenure BPCL has undertaken no new project. No expansion. No diversification of any meaningful nature. Only visionary statements with targets set much beyond his CMD tenure have been made.

e. Most of the tenure has been spent dodging any decision which may blowback on the individual.

f. As a consequence, BPCL has not made any meaningful strides in performance, diversification or growth in the last two years.

g. Did anyone review a performance card for his tenure as CMD? He enjoyed the position and perquisites of CMD without taking a decision. Why shouldn’t the tenure of Sh. G. Krishnakumar have been cut short for non-performance to be an example?

h. No achievement of Sh. G. Krishnakumar could be tabulated even for retirement summarization (though it is customary in PSEs even if achievement is attributed to juniors through their own initiative) except the motherly statement as “leaves behind a legacy of transformation, innovation and people centric leadership. His inclusive leadership empowered teams, inspired collaboration and built a resilient, future-focused organization”. Is this the achievement for a progressive and learning organization?

i. Sh. G Krishnakumar could understand the future, next five years or till 2040 but not what is to be done during his own tenure. In a time when it is pivotal for Oil marketing companies to take meaningful decisions and actions to insulate themselves from disruptions such as phasing out of diesel and petrol vehicles, Mr. Krishnakumar did not implement any specific projects for survival of BPCL.

8. There are many more examples of existing CMDs across PSEs which will be highlighted by the undersigned from time to time. But the overarching questions that emerge:

a. Should country continue with such legacy of poor performance of PSE at the behest of CMDs who only dodge decision making for fear or criticism? If the PM of our country would have bothered what some or the other MP would say in the Parliament he would never have taken bold decisions like Operation SINDOOR.

b. Should there not be Annual Performance Review of CMD by PESB to ensure they are delivering on specific initiatives rather than just enjoying their position and churning out logos and mottos without underlying actions?

c. Just like the private sector, should the tenure of PSE CMDs not be performance based? Why should they continue for 5 years or till they attain the age of 60 years, whichever is earlier?

9. Time has come for every board member of the PSEs to be accountable and demonstrate what they are doing during their tenure. This review should be coupled with 360-degree review of CMDs and Directors from all the stakeholders. Those who do not perform or perform poorly should be asked to demit the office. It is a true reform that is required given the disruptive environment in which PSEs operate today. If steps in this regard are not taken, most PSEs will go down the path of PSEs which turned defunct too fast.

Regards,

Pradeep Kishan Yadav,
Ex-Executive Director (Gas),
Indian Oil Corporation Ltd.
House No. B-18, Plot No. 11,
AIMO CGHS Ltd., Classic Apartments,
Sector 22, Dwarka, New Delhi – 110077.
Email-ID: yadavpk1960@gmail.com

And at last – We Report-You Decide