The rumour mills across the corridors of Bombay House have far from quietened. N Chandrasekaran has decided not to seek a third term, and the question that’s on everyone’s mind is who’s next? No successor has been named yet. But the buzz across industry circles has brought forth names of potential front runners.
Just like the Buendía family in ‘One Hundred Years of Solitude’ by Gabriel Garcia Marquez, the Tata Group finds itself in a succession impasse. The six-month stalemate and the roadblock that halted a smooth extension of Chandra’s third term have been pretty much how Marquez had stated, “Time was not passing… it was turning in a circle.”
Chandra urges Tata Sons to decide on a successor soon
As Chandra mentioned in his own letter to the Tata Sons board, “It has been 6 months since that board meeting, and no resolution has been reached till date. Tata Sons is a very large institution, and there are many strategic projects that are under critical stages of execution. It is not only necessary to have a leader in place to lead the Group beyond February 2027, but also clarity on leadership is important for employees, investors, partners and other stakeholders.”
Who could be that potential leader?
Amendment to Tata Sons Articles of Association a key factor
One name that many have been asking about is Noel Tata. Would the Tata Trust Chairman make it for the top spot? Some have cited past examples when Ratan Tata had taken over as the interim chairman after Cyrus Mistry’s sudden removal.
However, as per the 2022 amendment to Article 118 of Tata Sons Articles of Association, the same person cannot be the chairman of Tata Trust and Tata Sons.
Unlike 2016, this time the Tata Sons board has more time. They have 6 months to deliberate and come to a conclusion before the curtains are drawn on Chandra’s term next February.
Deciding on Tata Sons chairman is an exhaustive process
But deciding on a successor at Tata Sons is not an easy task. When Cyrus Mistry was appointed or even when Chandra was chosen, a five-member selection committee was set up.
They recommended a potential candidate, and the Tata Sons board eventually appointed that person.
Are Tata Group veterans in the fray?
Even as one trusted Tata hand has decided to hang up his boots at the end of his current term, many industry observers believe the baton might pass to another trusted Tata old-timer. There is a buzz that TV Narendran is perhaps a contender for the top spot. The Tata Steel chief joined the Tata Group in the late 1980s. He is the CEO & Managing Director of Tata Steel.
Narendran is currently on the boards of Tata Steel and Tata International. He is also the Chairman of Tata Steel Europe and is the President of All India Management Association. He has served as the CII President from 2021 to 2022.
The other name that’s doing the rounds is Shailesh Chandra. He joined Tata Motors in 1995 and has steadily risen up the ranks. He is the Managing Director & CEO – TMPVL & TPEM. He is also the President of Society of Indian Automobile Manufacturers (SIAM),
While there are no clear names or signals at the moment, the understanding seems to be that the Tata Sons board could potentially veer towards a “trusted” “Tata old-timer”.
Some believe that the shortlist may include veterans belonging to the “manufacturing segment” within the Tata Group.
Why an insider matters
Many see the Tata beyond the lattice of business and encompassing of business diversity and do-goodery; the successor to Chandrasekaran would have to be extremely competent person who would be able to understand the group businesses, especially the long-term investments.
Tatas have now invested in long-gestation projects which will take time to yield the financial returns. It will certainly be more than a year or two from now. These include the Tata Digital, semiconductor business and even Air India. What also needs to be borne in mind is that these were all approved by the board of Tata Sons, so well beyond the accountability of an individual.
Albeit, there is little known, and details are still fuzzy about the presentations made to the board and the nature of financial projections promised or whether the losses were forecast. As far as the issue of succession is concerned, a link node across the long-term businesses that the group has invested in are high-technology businesses which will require a huge amount of transformational approach and are far removed from the brick-and-mortar businesses that the group has historically built since the early interventionist decades of the license raj era and subsequently the remoulding of the group post the 1990s.
Some of the industry veterans spoken to for this article, who did not wish to be named, believe that ideally the successor would have to be a leader whom within the group and not an outsider because at this stage it was equally important for the leader to understand the ethos of the group and the manner in which it functioned and most important had clarity on the dynamics of the individuals (read: managing the importance and egos of the various CEOs) within the group apart from gathering a firm grip on the complexities of the businesses of the Tata group.
One option being discussed is also a one-on-one conversation between the chairman of Tata Trust and Chandrasekaran and while sticking to the rule of 65 years but since there is still time for Chandrasekaran to reach there to use the interim time post February to groom a successor.
All eyes on the next move by Tata Sons board
But the other big question could be the shape and form of succession. Some industry old timers believe that one could also see separate roles emerging for the chairman and MD.
Having said that, this is all speculation at the moment…
As Chanakya mentions in Arthashastra, “The king shall lose no time when the opportunity waited for arrives; but of tomorrow, none can be certain.”
Disclaimer: This article discusses corporate leadership succession and ongoing speculations within Tata Sons based on industry sources and historical context. It is provided strictly for informational and news purposes and does not constitute financial advice, market predictions, or investment recommendations regarding any Tata Group securities. Readers should consult a qualified financial advisor before making any investment decisions. This disclaimer has been generated using AI to support user well-being and responsible content consumption.