Chandrasekaran to Stay as Tata Group Chairman Amidst Boardroom Turmoil
Tata Group Boardroom Drama and Chandrasekaran's Leadership
By Abhijith Ganapavaram
NEW DELHI, Sept 18 (Reuters) - The quiet Tata Group insider was on his way out. Now Natarajan Chandrasekaran has agreed to five more years running India's largest conglomerate, backed by its board but facing opposition from the philanthropies that control it.
The board of Tata Sons, the group's holding company, voted to give the 63-year-old a third five-year term as chairman after he reversed last month's decision to leave when his tenure expires in February 2027.
Noel Tata, chairman of Tata Trusts and a leading member of the conglomerate's founding family, cast the only vote against. The Trusts, which hold 66% of Tata Sons, called the resolution a "legal nullity".
Challenges Facing Chandrasekaran
Besides the clash with Noel Tata, Chandrasekaran stays on with plenty to resolve: a fight over whether Tata Sons must list, a proposed $2.6 billion stake sale by a minority shareholder in the holding company, combined annual losses of $2.33 billion at Air India Group and a downturn at automaker Jaguar Land Rover.
At the same time, Tata is expanding its electronics and semiconductor businesses, with Apple and Tesla among its clients and billions of dollars committed to chipmaking.
Boardroom Rift and Uncertainty
But his biggest challenge remains the open rupture between the Tata Sons board and the Trusts that control it, creating uncertainty over the relationship between the company and its largest shareholder.
"ALL-OUT WAR AT TATA," read a front-page headline of India's top business daily, the Economic Times, on Friday.
"For everything else he (Chandrasekaran) can put the right people, but this he has to solve himself," a senior Tata executive told Reuters, declining to be named as the matter is sensitive.
Leadership Style and Reputation
Chandra, as he's called in India's business circles, "has an ability to understand strategic issues across different businesses and makes decisions quickly. He is also very good at empowering managing directors and CEOs," the executive added.
The group has been in such crises before. In 2016, Tata Sons abruptly ousted then-chairman Cyrus Mistry after he fell out with group patriarch Ratan Tata over governance issues, setting off years of litigation over his removal and Tata Sons' governance.
Chandrasekaran's Background and Rise
Impatient 'Chandra'
Chandrasekaran grew up in Mohanur, a village in Tamil Nadu, one of six children, and attended a Tamil-language government school. He joined Tata Consultancy Services (TCS) in 1987 and has spent his entire corporate career at the group.
Before he took charge at TCS in 2009, rivals and insiders saw him as a backroom operator, strong on technology but low on charisma, and doubted his quiet manner would win over overseas clients.
He, however, embraced the role and under his leadership, TCS became India's most valuable company.
Chandrasekaran was picked to run Tata Sons in January 2017, becoming its first chairman from outside the small Parsi Zoroastrian community to which the Tatas belong.
"I was a very impatient guy in the early days," he said in a 2018 interview with The Week magazine, crediting long-distance running with making him more patient and observant.
Attention to Detail and Management Approach
He also built a reputation for detail and a prodigious memory. Former colleagues have described an executive who could move from the broad direction of the business to the minutiae of individual client pitches, but gave them room to operate.
A Different Test for Tata Group
Financial Growth Under Chandrasekaran
In his nine years at the top of Tata Sons, the combined market capitalisation of Tata companies rose to $277 billion by March 31 this year from $76 billion when he became chairman in 2017.
Chandrasekaran was picked for the post by Ratan Tata, the group's former chairman and longtime patriarch, who died in 2024. Noel Tata, Ratan's half-brother, was appointed chairman of Tata Trusts.
Disagreements and Future Outlook
Since then, disagreements have emerged over some of Tata's biggest issues. Air India is among them. Tata Sons bought the airline back from the government in January 2022, and mounting losses at the carrier have been among the issues on which Chandrasekaran and the Trusts have clashed.
Noel Tata has said he believes Chandrasekaran's earlier decision to leave should stand. Chandrasekaran himself has not publicly responded to the Trusts' criticism and has so far stayed silent on the dispute.
Chandrasekaran's Commitment to Tata Group
Last month, hours after announcing he would not seek reappointment, Chandrasekaran addressed employees at a town hall at Bombay House, the group's Mumbai headquarters. He said he could not have dreamt where his career had taken him, but that all careers come to an end.
He left the room to applause. Five weeks later, on September 17, he agreed to stay.
(Reporting by Abhijith Ganapavaram; Editing by Aditya Kalra and Raju Gopalakrishnan)
