The proposed transfer of Government's stake in Hindustan Petroleum Corporation Ltd (HPCL) to ONGC has aroused curiosity about the management structure of the two PSUs. Particularly, the question being asked is who will be the boss? In view of the proposed transfer of ownership and not merger per se may suggest that HPCL may continue to function without much tampering of its management structure. However, the problem that has arisen is that the top post of CMD in both the PSUs is held by individuals of the same rank. Shashi Shanker leads ONGC and Mukesh Kumar Surana helms HPCL. So will Surana have to play the second fiddle to Shankar after the transfer of ownership? It is also being speculated whether the CMD position in HPCL be converted to that of only Managing Director since HPCL will end up becoming a subsidiary of ONGC following the transfer. Within ONGC and HPCL, those who are associated with the development remain 'politically' correct and simply say, "A decision on Board composition will have to be taken by the government sometime soon. We would like to believe that organizations are much above individuals." However, internally all agree it is easier said than done. There will also be the issue of corporate governance and transparency. "The last thing that one should do is not clearly define the role and responsibility of the CEOs," said Mukesh Butani, Partner, BMR Legal. Should both CMDs continue? Without over-simplifying, as HPCL is being acquired, the ONGC CMD becomes the super boss and it should function typically the way a holding and a subsidiary company work. Pavan Kumar Vijay, Founder, Corporate Professionals, believes that post-acquisition one of the biggest challenges will be manpower-related, as the combined entity would be overstaffed, and rationalizing would be critical. Being a PSU, it would be difficult. "Would the top management of HPCL be comfortable to work under ONGC? Again, there are differences in management style and several instances of internal competition between the two companies," he says. Pointing towards the SEBI-appointed Kotak committee recommendations, Butani said the committee does offer a separation of role and responsibility between the MD and Chairman. In this instance it will depend on how the ONGC and HPCL deal defines it, he added. "In the context of ONGC, one of the ways to devise functional responsibility would be to organize the business segments into upstream, midstream, downstream, and allow refineries and retail to have separate heads," said Butani. But, if the chairman is the executive, then there is a governance issue. A chairman is the head of the Board whereas the managing director should work under the supervision/directions of the board. "Thus, clubbing the two positions creates a situation where the post becomes too powerful for the Board to make it accountable. Hence, it is preferred that Chairman should be non-executive so that Board can be critical and may hold the MD accountable," said Pavan Vijay. For example, in the case of MRPL, the ONGC Chairman is a non-executive Chairman. This helps prevent any conflict of interest. A non-executive chairman of the board does not occupy a management position, and the chair operates independently from the company. Besides, a non-executive chairman receives proposals from the CEO. Says Bimal Jain, Chairman, Indirect Taxes Committee, PHD Chamber, "It is highly advisable that one person holds one post, which is good from the audit and transparency perspective, otherwise things can go wrong." Though there is no legal binding - under the Companies Act - that the Chairman of the joint entity should be from ONGC, the question is will the ONGC top management let go of the powers that they get with this acquisition?