Mumbai: Sons Tata Board has approved decoupling from two key positions to ensure that the Chairperson of the Sons Tata will not be able to take a similar role in Tata Trusts, the controlling shareholder.
The decision was taken at the council meeting last week where the Chairman of the Emeritus Ratan Tata was “a special invitation.” Traditionally, the Chairperson of Tata Sons has held the position of chairman in Tata Trust as well.
That’s when this 2012, when Ratan Pension from the conglomerate but did not resign as Chairman of Tata Trust.
He continued at the post regardless of two regime changes in the Sons Tata afterwards.
Decoupling will ensure that two independent remaining positions, with confidence have almost absolute control over the $ 103 billion conglomerate company.
This will also mean that the Chairperson of the Sons Tata Currently N Chandrasekan will be banned from the chair of the chairman in Trust.
Tata Sons refused to comment on the decision.
At the February 11 meeting, the item was forwarded to be included in the Articles of Son’s Articles of Association stating that the Chairperson of the Sons Tata and Trusts Chairperson could not be the same person, to ensure a “better government”.
This will be placed before Tata Sons shareholders for approval.
Trust consists of a dozen strange charity organizations, where Sir Dorabji Tata Trust (SDTT) and Sir Ratan Tata Trust (SRTT) – was founded by the founding children of Kongsleter Jamsetji Tata – has the largest 52% shares in Sons Tata.
Ratan Tata became Chairman of the SDTT in 1995, four years after he took over as Chair of the Sons Tata after JRD’s death.
He has been the chairman of the SRTT, the other main belief, in 1988.
When he retired from Tata Sons in December 2012 at the age of 75 years, the position was separated when he maintained a defense of trustees when Cyrus Mistry replaced him in Tata Sons.
This is also possible because trust does not have a retirement age for its chairman (read guardians).
Districi, thus, is the chairman of the first Sons Tata in the history of more than 150 years of conglomerate which was not made by the chairman of trust.
After being overthrown from the leadership post in 2016, Mistry has criticized the Darearchy system, accusing Ratan Tata to disrupt its function.
Tata Sons has refused the claim.
Chandrasekkan then replaces Mistry.
With Tata Sons decide that his chairman will not be the chairman of Trust, formal settings have been set.
This means that even Tata family members cannot hold both positions.
Still to be seen who will succeed in the Ratan Tata on trust because this position has a major influence on how the Tata Son and, with implications, how wider conglomerates are managed.
Trust does not respond to TOI questions.
Thomas Kuruvilla, managing partners in the Consultation of Arthur D ‘Little, said, “You should never have the same person lead both the company and the foundation that has it, except for the early years because it helps in carrying out the vision and strategy.
After that, the best.
It is having a separate chairman so that the purpose of each is managed independently and objectively and the foundation is not biased to support the interests of the company’s business.
“Globally, the foundation that has a company (such as Robert Bosch and Hershey) has a separate chairman / tension for both.