Tata firms will lead, not follow: Chandra

Soon after attending his first board meeting as chairman of Tata Sons, N Chandrasekaran today vowed to make the Tata companies leaders in their respective sectors, offer higher returns to shareholders and initiate a better capital allocation policy.

“In my new role, I will focus on three strategic priorities: bring the group closer together to leverage its enormous collective strength; reinforce a leader’s mindset among the operating companies and drive worldclass operating performances across the group; bring greater rigour to our capital allocation policies and deliver superior returns to our shareholders. I look forward to working with my colleagues, the management teams and the boards of the companies towards achieving these goals,” said Chandra, who walked into Bombay House, the iconic headquarters of the Tata group, just before the Tata Sons board meeting, wearing a red tie and a suit.

The statement by Chandra assumes significance as it shows the new chairman’s willingness to take the boards of the Tata group companies into confidence. During Cyrus Mistry’s battle with Ratan Tata, many independent directors of group companies had openly supported Mistry, splitting the boards into two camps.

Chandra said it was an honour to lead the Tata group near its 150th anniversary. "The Tata group occupies a unique place in the hearts and minds of millions of Indians and also has established an important presence around the world,” Chandra, the first non-Parsi chairman of the group, said.

In a letter to Tata employees, Chandra said, “As a group, we have enormous collective strengths. Working together, our companies, Tata Sons and the Tata Trusts have been very successful in the past, and have created great value for all our stakeholders. Now, as we face the future, we have a huge opportunity to do so once again — in terms of our business performance, by enabling higher shareholder value, as well as by making a significant and lasting social impact with a view to make a sustainable difference in communities.”

This was in an apparent attempt to win the confidence of the Tata Trusts, which had a testy relationship with Mistry. The Tata Trusts own 66 per cent of Tata Sons and have veto powers to sack and appoint the chairman. Ratan Tata is the chairman of the Tata Trusts.

Since October 24, the Tata group companies have lost market value worth ~11,052 crore, or 1.3 per cent, against a 3 per cent gain by the BSE Sensex.

I’M SURE CHANDRA IS GOING TO DO REALLY WELL. TATA GROUP HAS A LOT OF CHALLENGES. BEING IN VERY DIVERSE BUSINESSES, AT DIFFERENT CYCLES, THEY ARE VERY MUCH IN THE ECONOMY, WHICH ITSELF IS ALSO FACING A LOT OF PROBLEMS, AND SO TO THAT EXTENT, THIS IS SOMETHING CHANDRA IS GOING TO ADDRESS ACROSS THE BOARD” ARUNDHATI BHATTACHARYA Chairman, SBI

DHANSAK GIVES WAY TO MASALA DOSA TODAY AS CHANDRA TAKES THE MOST COVETED THRONE AS HEAD OF TATA GROUP. KEEP THE TATA FLAG FLYING HIGH!” HARSH GOENKA Chairman, RPG Group