No leadership structural changes are on the anvil: Tata Sons Chairman

Bloomberg on Monday reported that Tata Sons is considering an historic revamp of its leadership structure by creating a CEO role to help improve corporate governance

Tata Sons Chairman N Chandrasekaran on Wednesday quashed media reports of board revamp happening at Tata Sons. 

“I would like to state that no leadership structural changes are on the anvil, as speculated in certain sections of media. Any such decisions if relevant, are taken by the Nomination and Remuneration Committee. We are extremely disappointed with such stories that create disruption to regular operations," said Chandrasekaran in a statement.

Bloomberg on Tuesday reported that 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. The news agency quoted people engaged in the deliberations.

"Under the plan being proposed, the CEO will guide the sprawling businesses of the 153-year-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," Bloomberg reported.

"Extremely disappointed with media reports regarding major revamp in the Tata Groups organisation framework through a speculative company-wise restructure with me seen to be critical to implanting this change," said Ratan Tata on Wednesday.

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, according to Bloomberg.

Tata Sons’ former chairman Ratan Tata, 83, recently won a years-long legal battle with his successor Cyrus P. Mistry, who alleged mismanagement at the group and sued the patriarch for ousting him in 2016. 

With 100-odd businesses and more than two dozen listed firms, the Tata group had a combined annual revenue of $106 billion in 2020. Its 750,000 employees make cars and trucks, blend tea, forge steel, sell insurance, write software, operate phone networks and package salt, among much else.