Tata Sons chairman N Chandrasekaran is all set to be appointed for a second term, having the support and approval of the board of Tata Trusts and its chairman Ratan Tata. Several top officials close to the holding company and the Tata Trusts, its majority owner, told ET his reappointment is a “non-issue” and would “sail through.”
They said a second term had already been “informally ratified” as Chandrasekaran’s performance and conduct had been appreciated by stakeholders.
Further, he had taken on various challenges, bet on future growth opportunities while consulting Ratan Tata on crucial group plans and important policy matters. Chandrasekaran also played a major supportive role in the victory of the Tata group in the long legal battle with Cyrus Mistry, former chairman and estranged shareholder of Tata Sons, which has helped to further strengthen the case for a second term.
“The chairman of Tata Sons and his legal team put together critical legal information and (he) was part of all key discussions and strategies, along with Ratan Tata. Those efforts have not gone unnoticed. Also, while the current chairman has taken key business decisions independently, he has ensured that he sought counsel on the same from Tata,” said a group insider.
Chandrasekaran’s first term officially ends in February 2022.
Stability and Continuity
But officials say the holding company board may most likely clear Chandrasekaran’s next term “sooner (rather) than later.”
This will help showcase stability and continuity to stakeholders and investors, contrary to the tumultuous situation during Mistry’s ouster.
“There is still time for the current term to end, but yes, the reappointment is just a formality. It is almost done. Tata Trusts, the key stakeholder, is confident about him,” said an official close to the development.
The Trusts has also taken its time in appointing more nominees on the board, owing to its confidence in the chairman, said a group official. “Unlike the previous chairman, who was also seen as perceiving things through the eyes of a shareholder, Chandrasekaran is clearly seen differently in a more professional light,” said a person close to the Trusts.
The chairman of Tata Sons usually gets a five-year term when selected, say insiders. “The chairman’s reappointment is a non-issue and will appear as a routine board agenda item in any of the forthcoming meets. The previous chairman’s ouster was an aberration in the holding company’s history and is certainly not comparable to the current chairman,” said a senior group official. Mistry was ousted in October 2016 by the board, citing loss of confidence and non-performance.
Tata Sons did not comment. An email sent to Ratan Tata went unanswered.
“Chandrasekaran has brilliantly managed equations within the group. He accepted the limitations group operations had and worked around it the way an architect handles the restoration of a heritage building. He has also worked on a decent chemistry with the chairman, with his personal support on many issues,” said an insider.
Chandra, as he is usually referred to, joined the Tata Sons board in October 2016, was designated chairman in January 2017 and took official charge in February 2017. He also chairs the boards of operating companies such as Tata Steel, Tata Motors, Tata Power and TCS.
“Unlike the earlier chairman of Tata Sons, there has been a constant engagement between the current chairman and Tata Trusts on critical matters. The interests of the largest stakeholders in the group businesses are taken care. The finance team of Tata Sons has also been closely involved in helping Tata Trusts rewire its governance structure to ensure stricter audits and tighter internal controls,” said a person close to the Trusts.