'Respect Chandrasekaran's decision': Tata Trusts begin process to pick new Tata Sons chairman

Tata Trusts on Thursday backed a leadership transition at Tata Sons after N Chandrasekaran decided not to seek another term as chairman. The Trusts said they will begin the process of finding his successor.

In a statement, the Sir Dorabji Tata Trust (SDTT) said its nominee directors received an email from Chandrasekaran on August 12 informing them that he would not offer himself for reappointment when his current term ends on February 20, 2027.

The Trust said it "respects Mr. Chandrasekaran's decision not to offer himself for re-appointment" and placed on record its "deepest appreciation" for his contribution to Tata Sons and the Tata group over the past decade.

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SELECTION COMMITTEE TO BE SET UP

The trustees of the Sir Dorabji Tata Trust have passed a resolution to set up a Selection Committee as soon as possible.

The committee will recommend a candidate for appointment as the new chairman of the Tata Sons board, in accordance with the company’s Articles of Association.

The Trust also said it would extend its "full support" to Tata Sons to ensure a "smooth, timely and orderly transition of leadership".

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CHANDRASEKARAN'S NINE-YEAR TENURE

Chandrasekaran, 63, has spent 40 years with the Tata Group and has been Tata Sons chairman since 2017.

In his statement on Wednesday, he said he had completed 40 years of his professional life at the group and was grateful for the opportunity to contribute to the institution.

His decision ends a six-month impasse over his reappointment. Chandrasekaran had been seeking what would have been an unprecedented third five-year term.

He said the Sir Dorabji Tata Trust and Sir Ratan Tata Trust, which together hold 51.54% of Tata Sons, had unanimously recommended extending his term by five years. The recommendation was also recorded and backed by the Tata Sons Nomination and Remuneration Committee and the board before being put to directors on February 24.

"However, the proposal was not carried through because one of the Board Members did not support it, and in the absence of unanimous support, I chose to defer the decision," Chandrasekaran said. "It has been 6 months since that Board meeting, and no resolution has been reached till date."

WHAT LED TO THE STANDOFF?

Chandrasekaran did not name the board member who opposed the proposal.

Noel Tata, who became chairman of Tata Trusts in 2024 after the death of Ratan Tata, had sought certain assurances from Chandrasekaran before backing another term, according to people familiar with the matter.

These included greater clarity on the group's five-year strategic roadmap, the handling of losses at newer businesses and a way to provide an exit to the Shapoorji Pallonji Group without taking Tata Sons public.

Tata Sons is the principal investment holding company and promoter of the Tata Group. It controls more than 30 companies, including Tata Consultancy Services, Tata Motors and Air India.

Tata Trusts collectively own about 66% of Tata Sons.