Noel Tata, chairman of Tata Trusts, is set to play a central role in choosing the next corner office occupant of Tata Sons, the holding company of the Tata Group, following the resignation of N Chandrasekaran.

Tata, who is also a director on the Tata Sons board, is expected to join the company’s Nomination and Remuneration Committee (NRC) at its next meeting, according to a person familiar with the development.

Group insiders said Chandrasekaran’s resignation has accelerated the succession process at the conglomerate.

“The selection committee will be constituted in the coming days. Three of the five members will be nominated by the Tata Trusts,” the person said, adding that the members could be eminent persons from outside the group.

The Tata Sons NRC currently comprises Harish Manwani as chairman, along with Chandrasekaran, Venu Srinivasan and Anita Marangoly George.

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The governance framework for appointing the Tata Sons chairman, which was upheld by the Supreme Court in its 2021 judgment in the Cyrus Mistry dispute, gives Tata Trusts considerable influence over the succession process.

Under Article 118 of the Tata Sons Articles of Association, the chairman can be appointed only through a Selection Committee process as long as the Sir Dorabji Tata Trust and Sir Ratan Tata Trust together hold at least 40% of the company’s ordinary share capital.

The five-member committee comprises three nominees of the trusts, one nominee of the Tata Sons board and one independent member. Tata Trusts collectively hold around 66% of Tata Sons, while the remaining shares are held by Tata group companies and other shareholders, including the Shapoorji Pallonji family, which owns 18.4%.

Article 118 also provides that the chairman of the Selection Committee is chosen by the trusts from among their nominees. A meeting of the committee requires the presence of a majority of the trust nominees to constitute a quorum.

The committee recommends a candidate for appointment as Tata Sons chairman, though the final appointment is also subject to Article 121 of the Articles of Association.

Article 121 gives directors nominated by Tata Trusts affirmative voting rights on several reserved matters, including the appointment of the Tata Sons chairman. This means that, in practice, a candidate cannot be appointed without the support of the trust-nominated directors on the Tata Sons board.

At present, Noel Tata and Venu Srinivasan represent the trusts on the Tata Sons board.

Separately, Article 104B gives the Sir Dorabji Tata Trust and Sir Ratan Tata Trust the right to nominate one-third of the directors on the Tata Sons board.

In its March 2021 judgment, the Supreme Court upheld these provisions as valid shareholder rights embedded in Tata Sons’ Articles of Association. The ruling confirmed the governance framework under which the Tata Sons board formally appoints the chairman while Tata Trusts retain substantial influence over both the selection process and the final decision.

The provisions put Noel Tata and the other trustees at the heart of the leadership transition, giving them a pivotal role in identifying and endorsing Chandrasekaran’s successor.