Tatas consider board revamp to bring in CEO
MUMBAI: Tata Sons Ltd, the holding company for India’s largest conglomerate, is considering an historic revamp of its leadership structure by creating a chief executive officer’s role to help improve corporate governance, people engaged in the deliberations said.
Under the plan being proposed, the CEO will guide the sprawling businesses of the 153year-old Tata empire, while the chairman will oversee the chief executive on behalf of shareholders, the people said, asking not to be identified discussing private information. The approval of Ratan Tata—the octogenarian chairman of controlling owner Tata Trusts—is seen as key to implementing the change, they said.
The current chairman of Tata Sons, Natarajan Chandrasekaran, is being considered for extension after his term ends in February, while heads of various Tata group firms, including Tata Steel Ltd., are being evaluated for the CEO position, the people said. No final decision has been reached, and the plan and details could still change, the people said. A spokeswoman for Tata Sons declined to comment. Emails to Tata Trusts and Ratan Tata weren’t answered.
The proposal comes months after Tata Sons’ former chairman Ratan Tata, 83, won a yearslong legal battle with his successor Cyrus P. Mistry, who alleged mismanagement at the group
and sued the patriarch for ousting him in 2016. The proposed makeover may help chart a future for the conglomerate, which is at a crossroads after more than two decades of expansion under Ratan Tata’s leadership. There’s no clarity on who will succeed him as chairman of Tata Trusts, which owns 66% of the holding company that runs the empire whose roots date back to 1868.
A new group CEO will have to tackle many challenges. Tata Steel is racing to cut a net debt load of $10 billion, while Tata Motors has had three consecutive years of losses through March 2021. The group’s plan to move further into the digital space and capitalize on India’s growing base of online shoppers has also yet to bear fruit. Despite having Tata Consultancy Services Ltd., Asia’s largest software services provider, at its disposal, a plan to launch an all-in-one e-commerce superapp to market its swathe of consumer products and services has been delayed.