I am being sacked: Nirmalya Kumar details the day that led to Cyrus Mistry's exit from Tata Sons

It was all over in minutes, no explanations and no opportunity for Cyrus Mistry to prepare a rebuttal. No rationale for the decision was shared.

Kumar, who was the head of strategy of the Tata group during Mistry's tenure, claims till date Mistry has not been given a valid reason for his exit.
Nirmalya Kumar, who was part of the core group executive council (GEC) formed by Cyrus Mistry till he was fired, claims in a new blog that the former Tata Sons CEO fell to a vilified PR campaign despite the goodwill he enjoyed in the group.

In his blog, which chronicles corporate India's biggest boardroom drama that led to Mistry's exit on October 24, 2016, Kumar claims that no Tata group CEO, barring two – Harish Bhat and Bhaskar Bhat – had anything negative to say about Mistry a year after the episode.

Kumar, who was the head of strategy of the Tata group during Mistry's tenure and was removed the same day as Mistry, claims till date Mistry has not been given a valid reason for his exit. Excerpts from his blog:

On 24 October 2016, Cyrus was in his Bombay House 4th floor office examining what seemed like a routine agenda for the Tata Sons board meeting that was scheduled to start in five minutes at 14:00 hours. Through the grapevine, Cyrus had heard that some of the board members had an unscheduled informal meeting earlier that morning. However, what they had discussed was unknown, and as such, he did not give it much further thought.

The previous week had been business as usual with trips to China and Singapore to meet partners and investors.
A knock on the door, and to his surprise, enter his predecessor, Ratan Tata and Tata Sons board member Nitin Nohria. Cyrus welcomes them and asks them to take the two chairs opposite him. Nitin Nohria begins by proclaiming that “Cyrus as you know the relationship between you and Ratan Tata has not been working.”

Therefore, Nohria continues, Tata Trusts have decided to move a board resolution removing Cyrus as Chairman of Tata Sons. He is offered the option of resigning or facing the resolution for his removal at the upcoming board meeting. Ratan Tata chimes in at this stage to say he is sorry that things have reached this stage.
Cyrus Mistry calmly responds with gentlemen you are free to take it up at the board meeting and I will do what I have to do. Nitin Nohria and Ratan Tata exit the room and walk over to the other end of the hallowed 4th floor of Bombay House, where the board room is located. Cyrus, sends a text “I am being sacked” to his wife Rohiqa, before putting on his jacket and heading to the Board Room.

The board meeting
Cyrus takes his place on the chairman’s seat, a chair that is slightly elevated and larger compared to the other chairs in the room. Mistry welcomes Ratan Tata (who had never attended a board meeting since Cyrus had become Chairman) to the meeting and informs the board that Ratan Tata and Nitin Nohria have something to share prior to considering the previously circulated agenda.

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Nohria, a Tata Trust nominee and Dean of Harvard Business School, advises the board that the Tata Trusts have asked its nominees to propose a motion to the Board of Tata Sons. Amit Chandra, another Tata Trust nominee, apprises the board that at a meeting of the Trust Directors held earlier in the day it was agreed to move a motion to request Mistry to step down as Executive Chairman of Tata Sons because the Trusts had lost confidence in him for a variety of reasons.

No rationale for the decision beyond this declaration was shared.
In response, Cyrus argued that the articles of association required a 15-day notice before taking up such an item for the consideration of the Board, and as such, the present action was illegal. Amit Chandra informed the board that the legal opinion obtained by the Trusts stated such a notice was not necessary. He offered to share the opinion, but none has been to date.

The aftermath
The conference room is where Cyrus first got a chance to sit down, visibly shaken, and asked for a cup of tea. They knew they needed a public relations agency and a lawyer immediately. What they did not know was that Tata had already engaged six major public relations companies and booked many of the most prominent lawyers in the country in a bid to squeeze the resources available to Cyrus post firing....


CEOs being fired is always news, despite it not being a terribly uncommon occurrence. What made the firing of Cyrus Mistry so unusual was that Tata Group had a history of only six Chairman over 148 years! Cyrus Mistry was selected after a careful process that took over a year, and by assuming the role at the age of 46, he was expected to serve between 20-30 years. In general, the Tata group is renowned for its values, which did not encompass a “hire and fire” policy. Most senior Tata executives were consummate insiders, having usually served their entire career with the Group.

The initial contract under which Cyrus was serving as the Chairman had been passed via a shareholder resolution of Tata Sons. It was due to expire on 31 March 2017. Instead of the sudden, no warning dismissal, the board could have just let the clock run out in five months. By eschewing the public humiliation of Cyrus Mistry, the bloody aftermath that followed could have been avoided.

Unfortunately, instead there was the subsequent public airing of the underbelly of the Tata group as well as the deleterious impact on the reputations of Ratan Tata, Cyrus Mistry and the Tata brand. The only winners as far as one could see were the public relations companies and lawyers, who are still having a field day....

Postscript
A year later, despite the best efforts of the press promoted by the six PR agencies and pressure from the internal Tata communications team, only two Tata CEOs, Bhaskar Bhat and Harish Bhat, have had anything negative to say about Cyrus Mistry in the press. And, even they, were remarkably muted in their criticism. Under the circumstances, what better performance review could Cyrus Mistry have received as Chairman of Tata Sons?

Read Nirmalya Kumar's complete blog

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