It may be recalled that Prof M Rammohan Rao had chaired the meeting of Satyam’s Board of Directors that had approved the controversial Maytas infra deal.

In a letter to the ISB community, Rao explained the reasons for his decision: “Unfortunately, yesterday’s shocking revelations, of which I had absolutely no prior knowledge, mean that we are far from seeing the end of the controversy surrounding Satyam Computers. My continued concern and preoccupation with the evolving situation are impacting my role as Dean of ISB at a critical time for the school. Given that my term with the ISB ends in a few months, I think this to be an appropriate time for me to step down.”

The ISB Executive Board accepted Prof MR Rao’s resignation with immediate effect. A Dean Search is already underway since Professor Rao’s tenure was to conclude in June 2009, said the ISB spokesman. In the interim period, Deputy Dean Ajit Rangnekar, who has been with ISB since 2003 will hold charge as Dean.

“I would like to thank all of you for the support and encouragement you have given me while leading this prestigious institution during the last four and a half years. While my work here remains unfinished, I take great pride in the fact that we have established six research Centres of Excellence which are gaining world wide recognition. The Centre for Executive Education has been steadily growing in stature and the school is now financially sound. A significant achievement has been that we were able to put ISB on the global b-school map by attaining the FT-20 ranking,” Prof Rao said in his exit statement.

“This is a difficult decision for me, given my commitment to ISB, its faculty, students, staff, alumni, research, and academic associates. But, it is precisely this commitment that has convinced me that this decision is in the best interest of ISB,” he added. Prof Rao was appointed as the Dean of ISB in July 2004.
Appreciating Prof Rao’s gesture to resign and recognising his contributions to ISB, Rajat Gupta, Chairman of ISB, assured the ISB community of the Board’s full support in the seamless functioning of the ISB.

“We believe the ISB leadership is well-positioned to take us forward during this period of transition. My fellow Board members and I are fully committed to supporting Ajit and the ISB team in tackling any challenges that you may face. While we recognise this has been a distracting few weeks, I hope to receive your full support in moving ahead to achieve greater heights for ISB,” said Gupta.

Following are the full texts of the letters sent by Prof Rao and ISB Chairman Rajat Gupta to the ISB community.

Full text of letter from Prof M Rammaohan Rao to the ISB Community

Dear all,

It is with deep regret, but with a sense of responsibility and duty towards ISB, that I have today stepped down from the position as Dean of ISB. The unforeseen developments of the past few weeks at Satyam have left me very concerned and preoccupied. Unfortunately, yesterday’s shocking revelations, of which I had absolutely no prior knowledge, mean that we are far from seeing the end of the controversy surrounding Satyam Computers.

My continued concern and preoccupation with the evolving situation are impacting my role as Dean of ISB at a critical time for the school. Given that my term with the ISB anyway ends in a few months, I think that this is an appropriate time for me to step down.

This is a difficult decision for me, given my commitment to ISB, its faculty, students, staff, alumni, research and academic associates. But, it is precisely this commitment that has convinced me that this decision is in the best interest of ISB. Since the Dean Search Committee is close to selecting a new Dean to succeed me, I have requested the Board to appoint an interim Dean in the meantime so that I can be relieved of my responsibilities with immediate effect. I am sure ISB will be in good hands and make great strides going forward. I will, of course, be available to assist and guide ISB in any way necessary.

I would like to thank all of you for the support and encouragement you have given me while leading this prestigious institution during the last four and a half years. While my work here remains unfinished, I take great pride in the fact that we have made great strides in attracting high-quality faculty and students to the school. We have established six research Centers of Excellence which are gaining world wide recognition. The Center for Executive Education has been steadily growing in stature and the school is now financially sound. A significant achievement has been that we were able to put ISB on the global b-school map by attaining the FT-20 ranking.

Personally, my tenure at ISB as the Dean has been an exciting journey and a fulfilling experience which I will always cherish. ISB will forever remain close to my heart, and I am always available to build the ISB further.

My personal thanks to each of you, for your support to me as your Dean. I will be here and always available to all of you as you feel necessary.

My best wishes to all of you for a great future!

With best regards,

MR

Full text of ISB Chairman Rajat Gupta’s message to the ISB Community

Dear all,

The ISB Executive Board has reluctantly accepted Professor MR Rao’s resignation as Dean of ISB with immediate effect. The events of the past few weeks have been very distressing to all of us, and MR in particular. We respect him for taking this difficult decision in the best interest of ISB.

Dean Rao has made enormous contributions to ISB over the years and we will always be proud of achieving the Financial Times Top 20 ranking under his leadership. He has led ISB through a critical period in its history growing our faculty pool and our research base significantly. However, given his personal proximity to the unfortunate controversy at Satyam, he has taken the decision to step down as Dean to protect the reputation of ISB in yet another example of his selfless commitment to building some of India’s leading management institutions like IIM Bangalore and ISB. The Board appreciates this gesture and will always value his contributions to ISB.

As you are all aware, we are in the middle of a Dean Search that will now be accelerated and, in the interim, Deputy Dean Ajit Rangnekar will hold charge as Dean of ISB. We believe the ISB leadership is well-positioned to take us forward during this period of transition. My fellow Board members and I are fully committed to supporting Ajit and the ISB team in tackling any challenges that you may face. While we recognise this has been a distracting few weeks, I hope to receive your full support in moving ahead to achieve greater heights for ISB. Please do not hesitate to reach out to us directly if you have any questions or concerns.

With warm regards,

Rajat Gupta

Chairman

ISB Executive Board