N Chandrasekaran’s decision to step down as chairman of Tata Sons has triggered a fresh debate inside the country’s biggest business group, with some directors wanting him to reconsider while others want the company to begin the search for his successor, reported The Economic Times.
Chandrasekaran told the Tata Sons board on August 12 that on February 20, 2027.
As per the report, some directors have discussed whether Chandrasekaran should be asked to reconsider, while others believe the group should respect his decision and begin looking for his replacement.
The debate comes after the 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 in February, and if he does, who will replace him?
While the Tata Sons board debates its next step, the Tata Trusts have already started preparing for a change at the top.
The Sir Dorabji Tata Trust (SDTT) has asked the Tata Sons board to take note of Chandrasekaran’s decision and begin the process of setting up a selection committee to identify his successor. Tata Trusts has also said it wants the process to begin at the earliest.
The Trusts matter because they collectively own about 66% of Tata Sons and have a key role in choosing its chairman.
Under Tata Sons’ Articles of Association, a five-member selection committee is to be formed to recommend the next chairman. Three members are jointly nominated by the Sir Dorabji Tata Trust and the Sir Ratan Tata Trust (SRTT), one comes from the Tata Sons board and another is an independent member selected by the board.
But the process has run into a problem.
SRTT is currently restricted from convening meetings following an order by the Maharashtra Charity Commissioner.
Tata Trusts has said the order was passed without giving SRTT an opportunity to present its case, and has challenged the restriction. This could delay the succession process.
SRTT needs to participate in nominating members to the selection committee, but it cannot currently convene a meeting to do so.
Simply put, the selection committee cannot be formed without those nominations, making the SRTT issue an important hurdle for Tata Sons as it begins the search for Chandrasekaran’s successor.
There is no formal shortlist yet. However, reports have mentioned Tata Steel CEO TV Narendran and Tata Power CEO Praveer Sinha among possible internal candidates.
These are only names being discussed at this stage. No decision has been taken on Chandrasekaran’s successor, and the eventual selection committee could consider both internal and external candidates.
For now, the Tata Sons succession process is caught between the chairman’s decision, a divided board and a Trust-level hurdle.
Chandrasekaran has said he will not seek another term, but some directors want him to reconsider. At the same time, Tata Trusts wants the succession process to begin, but the inability of SRTT to convene meetings could make it difficult to constitute the selection committee.
For Tata Sons, the immediate challenge is therefore not just finding Chandrasekaran’s successor. It is getting the succession process itself moving while the board and Tata Trusts work through their differences.