Following N. Chandrasekaran’s decision to step down as the chairman of Tata Sons after his current tenure, has triggered a debate inside the country’s biggest business group as to who would take charge next. Some directors want him to renew his tenure while others want the company to begin the search for a successor, according to a report.
On August 12, Chandrashekaran told the Tata Sons board that he will not seek another term following the end of his current term on February 2027. As per the records, some directors have discussed whether Chandrashekaran should be asked to reconsider, while some believe the company should be given a new face and start the search for a replacement.
The debate comes after Tata Sons board had earlier deferred a proposal to give Chandrasekaran another five-year term because it did not have unanimous support for his reappointment. Chandrasekaran subsequently decided not to seek another term. The group is now dealing with two questions at once: will Chandrasekaran actually leave, and if he does, who will replace him?
In the meanwhile, Tata Trusts has asked Tata Sons board to take note of Chandrasekaran’s decision and begin the process of setting up a selection committee to identify a successor. But Tata Trusts have also said it wants the process to be taken at the earliest.
The decision by the trusts matters the most because they collectively hold about 66% of Tata Sons and play a key role in choosing its chairman.
Under the Tata Sons’ Articles of Association, a five-member selection committee is to be formed in order to choose the next chairman. Three members are jointly nominated by Sir Dorabji Tata Trust and the Sir Ratan Tata Trust. One comes from Tata Sons board, and another is an independent member selected solely by the board.
As of now, the Tata Sons succession process is caught between the chairman’s decision, a divided board and a trust-level hurdle.