Late on 9th October night, Ratan Tata, the Chairman Emeritus of Tata Sons, passed away in Mumbai at the age of 86. Shortly before he passed away, he was transferred from general to intensive care at Breach Candy Hospital on 7th October for age-related checkups. Ratan Tata was accorded a state funeral by the Maharashtra government. His body was kept at the National Centre for Performing Arts (NCPA) in south Mumbai’s Nariman Point from 10.30 am to 4 pm on 10th October for people to pay their final respects.
The Chief Minister’s Office (CMO) declared that, as a symbol of grief, the tricolour would be flown at half-mast on government buildings in Maharashtra. Furthermore, there won’t be any entertainment events. Several prominent individuals including politicians, industrialists and film stars attended his last rites which took place at the Worli crematorium. His funeral took place according to the rituals followed by the Parsi community. Many renowned personalities including Prime Minister Narendra Modi expressed his condolences on his demise.
Shri Ratan Tata Ji was a visionary business leader, a compassionate soul and an extraordinary human being. He provided stable leadership to one of India’s oldest and most prestigious business houses. At the same time, his contribution went far beyond the boardroom. He endeared… pic.twitter.com/p5NPcpBbBD
— Narendra Modi (@narendramodi) October 9, 2024
His death has resulted in a leadership void at Tata Trusts, the nonprofit groups essential to managing the $165 billion Tata Group. It is also the largest public charitable foundation in the country. The leadership of the Tata Trusts, which own the majority of Tata Sons, is crucial to the stability of the trusts as well as the group. Now, the board of trustees would have to make the appointment as Ratan Tata did not name a successor before his death. The principal owners of Tata Sons are the trusts, specifically the Sir Dorabji Tata Trust and the Sir Ratan Tata Trust, which together own nearly 52% of the company. Other trusts together own another 14% of Tata Sons, taking the total holding to 66%.
There are 13 trustees in total across the two trusts, with five individuals serving as common trustees for both. They will now choose the next chairman, and they could elect an interim head before making the final decision. The Tata family and the Parsi community have long been closely linked to the leadership of the trusts. Ratan Tata was the final person to serve as the chairman of both Tata Sons and Tata Trusts. The governance of the trusts’ structure was modified in 2022 to maintain the separation of the chairmanships of Tata Sons and Tata Trusts. The group’s efforts to improve management included this structural change.
Noel Tata, the chairman of Trent and half-brother of Ratan Tata, businessman Mehli Mistry, lawyer Darius Khambata, former defence secretary Vijay Singh and automobile industrialist Venu Srinivasan are the five common trustees. The other trustees include Ratan Tata’s younger brother Jimmy Tata and Jehangir Hospital CEO Jehangir HC Jehangir at Sir Ratan Tata Trust along with ex-Citi India CEO Pramit Jhaveri at Sir Dorabji Tata Trust.
The prime contenders
The trustees vote by majority consent to choose the chairman of Tata Trusts. Some members of the board of trustees are being discussed as possible successors. Both TVS Group supremo Venu Srinivasan and Vijay Singh have been vice-chairmen of the trusts since 2018. However, is unlikely that one of them will be chosen to be the chairman. On the other hand, there’s a strong possibility that 67-year-old Noel Tata will be chosen as the chairman. The philanthropic organisation, which gave out $56 million (Rs 470 crore) in FY23, would have a founding family member leading it, which would appease the Parsi community.
Considering the Tata family’s history of leading the trusts, Noel Tata is regarded as a formidable contender. His credibility is enhanced by his four decades of expertise working for the Tata Group. Moreover, his candidacy is strengthened by the Parsi community’s preference for a family member to run the trusts. Initially appointed to the board of the Sir Ratan Tata Trust in 2019, Noel Tata also became a trustee of the Sir Dorabji Tata Trust in 2022. Many people view his engagement with these trusts as a part of the shift meant to preserve continuity in leadership following Ratan Tata. He would be the sixth chairman of the Sir Ratan Tata Trust and the eleventh chairman of the Sir Dorabji Tata Trust if he were to be selected.
Noel Tata holds positions on the boards of six key companies, including Trent, Titan, and Tata Steel. Noel is a director of six significant businesses, including Tata Steel, Titan, and Trent. He was believed to be a possible successor to Tata as chairman of Tata Sons after Tata’s term in office. However, his brother-in-law late Cyrus Mistry was appointed to the post. Ratan and Noel Tata were not frequently seen together and instead chose to maintain their distance from each other. The half-brothers had, however, substantially bridged the distance between them recently.
Notably, Noel Tata’s name had frequently surfaced as Ratan Tata’s possible successor as chairman of Tata Sons, however, due to his lack of experience in Tata’s operating companies, he was disregarded. He didn’t have enough experience, Ratan Tata himself admitted in an interview while the selection committee was interviewing possible candidates.
N Chandrasekaran, another significant contender, took over Tata Sons in 2017 following Cyrus Mistry’s controversial exit and is currently its chairman. He is well-regarded for his dependable leadership and was previously the CEO of Tata Consultancy Services (TCS). He is currently regarded as the group’s most important leader. Mehli Mistry, a close friend of Ratan Tata, and Darius Khambata, a seasoned lawyer who has provided advice on succession issues, are two other important candidates in this decision. Ratan Tata’s personal preferences might not be effective in a legal manner, but the trustees will likely consider them when picking the future leadership.
In the past, there have been times when a non-Tata has taken on the Group leadership. Sir Nowroji Saklatwala became the chairman from 1932 until 1938. Cyrus Mistry took over later in 2012, but his term ended in 2016. N Chandrasekaran is now in charge of Tata Sons.
The next generation
Noel Tata’s 34-year-old daughter Maya Tata has emerged as an important name within the Tata Group. She began her work at Tata Capital as an analyst and has since advanced within the organization. She holds degrees from the University of Warwick and Bayes Business School and has held prominent positions in Tata Digital and the Tata Opportunities Fund. She also played a key role in the development of the Tata Neu App.
Neville Tata (32), Noel Tata’s son is deeply involved in the family’s retail ventures. Neville’s business expertise has been demonstrated as the head of Star Bazaar, a prominent hypermarket chain owned by Trent Limited. Two powerful corporate dynasties are further connected by his marriage to Manasi Kirloskar of the Toyota Kirloskar Group.
The oldest of Noel Tata’s children, Leah Tata (39), contributes her expertise to the Tata Group’s hospitality division. She has made a contribution to Taj Hotels Resorts & Palaces and controls operations at the Indian Hotel Company, enhancing the group’s standing in the hospitality sector. She graduated from Spain’s IE Business School.
Ratan Tata and Tata Trusts
In 1962, Ratan Tata joined the family business after completing his studies in architecture at Cornell University. He was appointed Chairman of Tata Sons in 1991. The Tata Group grew internationally under his leadership, acquiring Jaguar Land Rover by Tata Motors and making companies like Tata Consultancy Services (TCS) public. Additionally, he made significant donations to Indian philanthropy via the Tata Trusts.
Ratan Tata resigned as chairman in 2012, but held the title of Chairman Emeritus and was actively involved in the Tata Trusts, which support a range of charity projects throughout India. Many even claimed that he was making decisions on behalf of the trusts. When Cyrus Mistry was fired as Tata Sons chairman, he also brought up the issue of the two power centres.
Since Ratan Tata’s passing, there has been much conjecture about who will take over as chairman of Tata Trusts, a crucial position that determines the course of the biggest conglomerate in India. The board of directors of each Tata firm provides direction and oversight while enabling it to function autonomously. As of 31st March, there were 26 publicly traded Tata companies with a combined market capitalization of almost $365 billion (about Rs 30.65 lakh crore).
