Tata Sons chairman N Chandrasekaran may follow leadership style of JRD Tata

MUMBAI: Tata Sons may explore a structure that could allow newly appointed chairman N Chandrasekaran more time to focus on the bigger companies while simultaneously grooming in-house talent for larger roles.

Top officials in Tata Sons told ET that discussions are taking place on the number of companies Chandrasekaran will manage as chairman. He may not necessarily become chairman of all operating companies, a break from the practice followed by his predecessors, Cyrus Mistry and before him, Ratan Tata. Chandra, as he is often referred to, may follow the leadership style adopted by the late JRD Tata.

Top officials close to the development told ET that the board has left the decision to the new appointee and the boards of individual companies. The move is currently being debated with some Tata Sons directors who feel that Chandra should be the chairman of at least the big Tata companies.


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“The brass at Tata Sons has discussed the possibility of adopting a model that was practised by Ratan Tata's predecessor, the late JRD Tata, in which each flagship company had its own chairman,” another group official said. “This would give Chandra a chance to lean on competent veterans during a critical period of transition, thereby ensuring continuity.”

NEW CHAIRMAN’S DECISION
The new chairman is expected to decide on this after taking charge on February 21. “In any case, it will be Chandra’s decision. He will review which companies need his maximum time and attention and he will accordingly place his plans before the Tata Sons board,” the official said.

“The board will in turn convey and discuss the same with the Nomination and Remuneration Committee of individual companies. There are several leaders in Tatas who can steer individual companies successfully,” he added.

Tata Sons board on Thursday unanimously endorsed the appointment of Tata lifer and Tata Consultancy Services CEO N Chandrasekaran, 53, as the new chairman. While some group companies have not appointed a chairman after Mistry was removed, some others such as the board of Tata Global Beverages, which appointed its non-executive director and a group veteran Harish Bhat as chairman on November 16, have.

In November, TCS replaced Mistry with another group veteran Ishaat Hussain as its interim chairman while the board of Tata Steel appointed former chairman of State Bank of India OP Bhatt as an interim chairman. In January, the group appointed S Padmanabhan, a group veteran of more than three decades, as the chairman of Tata Power. Except for OP Bhat, an outsider, the chairman of the other companies are all Tata insiders. Tata Motors, Tata Chemicals and Indian Hotels are yet to find a replacement for Mistry.

“Nothing is cast in stone-…Tata Sons will make sure any decision taken ensures stability of the group companies and assuages fears of shareholders,” the first person quoted above said. “The group has been through a lot of upheavals which is unfortunate and going ahead, the only focus will be on its growth and well-being.’’ Top Tata directors said independent directors would also be consulted on the move before anything is finalised.