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Cyrus Mistry creates his new team with young faces

The Tata Group chairman has created the Group Executive Council as the highest decision-making body, a decade after its previous avatar lost its prominence as the sole body for strategic decisions for the $100-billion Tata Group.

twitter-logoAnand Adhikari | April 30, 2013 | Updated 23:01 IST

Anand Adhikari
Anand Adhikari
Cyrus Mistry has re-created the Group Executive Council (GEC) as the highest decision-making body, a decade after it lost its prominence as the sole body for strategic decisions for the $100-billion (Rs 5.4 lakh crore) Tata Group.

This powerful body, earlier known as the Group Executive Office (GEO), was first formed in 1998, soon after Ratan Tata edged out the old guard of Russi Mody, Darbari Seth, Ajit Kerkar and Nani Palkhivala. It was the executive arm with Tata Sons' two executive directors-Ishaat Hussain and R. Gopalakrishnan-and Tata Industries' Managing Director Kishor Chaukar as members. Gopalakrishnan came to the Group from Hindustan Lever Ltd, and Chaukar from ICICI Ltd, then a development finance institution.

The responsibility of the GEO was to look after the performance, restructuring, and leadership development in Group companies. But the body lost its relevance when Ratan Tata stepped down as executive chairman in 2002 after he turned 65. A year before Tata's first scheduled retirement in early 2000, when he assumed the role of non-executive chairman of holding company Tata Sons, the company's board created a new policy-making body called the Group Corporate Centre (GCC). This body lasted almost a decade until Ratan Tata retired in 2012. Besides him, it included Group stalwarts such as N.A. Soonawala, J.J. Irani and R.K. Krishna Kumar, who were also board members of Tata Sons then. This new body was created keeping in mind the non-executive nature of Ratan Tata's role. It became the highest policy-making body, while the GEO's role was now to implementing GCC policy.

Now, with Cyrus Mistry as full-time Executive Chairman, an executive body seems like the right thing to do, as Mistry has the freedom to create his young team. According to a Tata Sons press release, the GEC, under the aegis of the Tata Sons board, will now assume responsibility for all the roles earlier performed by the GCC and GEO. The initial membership of the GEC will include N. S. Rajan, who will lead the strategic function of human resources, Mukund Govind Rajan, who will oversee brand, communication, ethics and corporate social responsibility, and Madhu Kannan, who will head business development and public affairs. Other appointees will be announced in due course.

"The mandate of the GEC is to own and drive the delivery of the core purpose of Tata Sons, which is long-term value creation for all stakeholders," says the release. The GEC's agenda would include things such as a long-term perspective on return on investment, support for and the shaping of philanthropic efforts, preserving and enhancing the reputation of the Tata name, defining the Tata way of working for group companies, and playing a proactive role so that the group fulfils its responsibility as a global corporate citizen. "The GEC will work closely with and partner the boards, CEOs and senior management of the various Tata companies," says the Tata Sons release.

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