Tata Group chairman Cyrus Mistry, who talked of “winds of change” in his New Year letter to the salt-to-software conglomerate’s over 400,000 staff, would need to speedily strengthen the top deck at holding company Tata Sons and effectively juggle youth and experience to bolster leadership across the group, close observers of the group say.
With most directors on the Tata Sons board set to retire over the next two years, and almost all of them now continuing in a non-executive capacity, Mistry will need to bring in new and younger talent at the top in quick time, they say.
When he took over in 1991, former chairman Ratan Tata was aided by an eminent group of directors but just as he, they have either retired or are set to, giving Mistry an opportunity to infuse new blood into the 145-year-old group.
At present, apart from Mistry (44), the Tata Sons board comprises RK Krishna Kumar (74), Arunkumar R Gandhi (69), Farrokh K Kavarana (68), R Gopalakrishnan (66) and Ishaat Hussain (65).
In 2011, the $100-billion-plus Tata Group fixed the retirement age for executive directors at 65. It also lowered the retirement age for non-executive directors to 70 years from 75, based on the recommendations of a panel constituted to hunt for a successor to Ratan Tata. However, those directors who crossed the age of 70 could continue till they are 75 years.
This would mean that Kumar, vice-chairman of Indian Hotels, has just one more year with the group. Gandhi, a chartered accountant who helped Tata acquire large companies overseas, would have just another year before he retires, while Kavarana, also chairman of Tata AIG Life Insurance and Tata AIG General Insurance, has just two.
Mistry will now need to look both within the group and outside for leaders. There has been a thrust on young leadership into the group in the recent past. R Mukundan is managing director of Tata Chemicals, while Brotin Banerjee is managing director and CEO of Tata Housing. Both are products of the TAS — formerly the Tata Administrative Service, a leadership development programme conceived by Ratan Tata’s predecessor, JRD Tata.