Getting the Best Out of Public Sector CEO: Ensuring Performance and Exit, the Right Way

Abstract

Leadership in public sector is critical to good public governance for transforming India into a high growth and inclusive economy. Having made the best choice in selecting the CEO by eliminating type one error, the question arises as to how we address the risks arising from principal agent problem. This paper explores various country models for performance management, analyzes the current system, advocates for fixed tenure, mentoring and training and recommends performance metrics. A detailed examination of public sector MOU system is carried out with its promises and pitfalls. Considering the importance of due processes in public sector in addition to achieving results, this paper advocates adoption of GRI reporting standard and SA 8000 for measuring the social impact. The paper elucidates that the exit of CEO from the system needs equal attention, when he/she fails in either performance delivery or adherence to values. Finally, the paper recommends key ideas for change with some best practices for getting the best out of the CEO.