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CII@125: The Guiding Principles and the Governance Structure of the Association

31 Jul 2020

The merger of the Indian Engineering Association (IEA) and the Engineering Association of India (EAI) to become the Association of Indian Engineering Industry (AIEI) created history in the Indian chamber movement.

 The two erstwhile entities had different personalities and working styles, and although the assets of the liquidated IEA and EAI were transferred to the new, larger body, the AIEI, many issues such as the structure for the new organisation were to be ironed out. 

At the first meeting on 24 April 1974 of the AIEI, the new Executive Council, led by Mr P K Nanda as President and Tarun Das as Secretary of the AIEI, set upon the task. It worked out the modalities of the structure and the guiding principles which, till date, serve as the bedrock for the Confederation of Indian Industry (CII).

Some of the key decisions taken were as follows:

The IEA’s Working Committee and the EAI’s Executive Committee were replaced by a single Steering Committee comprising the President, the Vice President and the Regional Chairmen for the new AIEI.

This body had its role chalked out: the Steering Committee was to recommend to the Council major policies of the Association, handle all financial matters, and deal with staff and organisational matters as well.

IEA and EAI had specialised sectors as separate divisions. It was decided to let them continue functioning as separate divisions since the work was distinct and not overlapping between the two erstwhile Associations. The divisions of IEA catered to Bengal-based industries and focussed on promoting business while the associations of EAI undertook sectoral policy work as well. AIEI was thought to be large enough to accommodate both divisions and associations as they existed previously.
The idea of expanding the geographical footprint of AIEI found favour with everyone. This was viewed as a step towards expanding its growth and impact.
More importantly, it was decided that the new AIEI would move into new areas, beyond those where engineering industries existed. This, in many ways, was the first wave of what would eventually define an industry association: a wide expanse of multi-sectoral coverage making it a true representation of industry per se.
IEA had Regional Offices. Taking up from there, a Federal Structure was adopted for the Association. Members from Regions joined the Regional Office depending on their location. Each Regional Office had its own Council with a Chairman and Deputy Chairman, who were elected by Members of their Region.
Apart from a Regional Council, each of the states within a Region had its own State Councils and Zonal Councils. The staffing was done similarly to that of the Central Secretariat. 

This Federal Structure helped the Association have a very strong grassroots presence, which enabled it to work like an effective grid that covered the country and allowed concerns and voices to travel through the Regions to the Centre in Delhi and vice-versa.

To help the Association navigate it way, the Executive Council laid down some guidelines to define the spirit and workings of the AIEI. They started with a simple set of 5 guidelines, or the Panchsheel, which grew to 10 and finally 19 guidelines.

Several were radical given the then scenario and functioning of the Chambers.

Some of the key guidelines, which serve well even today, are as follows:

1. The Vice President would be elected the next President. In the Regions, the Deputy Chairman would become the next Chairman.

2. The Steering Committee was to oversee and ensure that there would be no canvassing for the elections to the Regional Committees, the Executive Council or the sub-committees.

3. The President would have a 1-year term which would not be extended. Moreover, he would not be eligible for Presidency after the expiry of this term, for the next ten years.

4. Office Bearers would operate through the Secretariat and not independently for correspondence, meetings and public statements, amongst others.

5. The Association would nominate its representatives to outside bodies as and when required. These nominees would continue to report to the Council and would follow the policies and practices of the Association.

6. The Association would not take up and represent to the Government or other bodies on individual cases. It would make general representations. Individual cases could be cited as examples to strengthen their case.

7. To strengthen the hands of the Secretariat, it was decided to have the Secretariat as a strong, permanent and independent institution. They would not be influenced by any group.

8. To centralise operations and increase streamlining and efficiency, it was decided that all the work of the Association would be centralised at the New Delhi office. Moreover, all correspondence would be drafted and signed at the Secretariat, using standardised stationery and without a mention of the Office Bearer’s company position.

9. The Secretariat was also to function independently, and out of its office. It was decided that the Secretary would be responsible for the secretariat staff.

Perhaps the defining guideline, which serves as a beacon for the Association even today, was that the Association would deal with whichever Government was in power, on the same terms. This one guideline has served the Association very well right through decades which have often been punctuated by political upheaval and turmoil. 

This guideline has also helped strengthen the credibility and image of the Association as a non-partisan Association which has India’s interest as top priority, irrespective of the political dispensation it is to deal with.

With the guidelines and structure in place, the Association focussed on the work with renewed vigour. But finances continued to be a hurdle. Over time, through specialised services and streamlining of the collection systems, the funds were built up, and its work stood it in good stead. Soon Members recognised the immense value it brought for them, and happily supported it.

The Association had been registered with the Income Tax Commissioner as a Charitable Organisation, eligible for tax exemption. An Income Tax Officer wasn’t convinced about it qualifying as a Charitable Organisation and issued an order. AIEI had to file an appeal with the Income Tax Commissioner and fortunately for it, the ruling was in its favour.

And thus, AIEI, with its guiding principles and structure in place, embarked on a journey to shape the course of Indian industry, and subtly, the course of India’s development over the years.

Till date, CII is guided by these principles and processes.

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