Bengaluru and Mumbai: Tata Sons chairman N. Chandrasekaran’s exit note on Wednesday has put the spotlight on the group’s lack of succession planning, an issue that Tata Trusts chairman Noel Tata had highlighted to the Tata Sons board at least twice in the past 19 months.
Chandrasekaran, who took over as Tata Sons chairman in February 2017, wrote to the Tata Group holding company’s six-member board that he will not offer himself for reappointment when his term ends next February.
Noel Tata, who took over as the chair of the philanthropic entities that control 65.9% of Tata Sons in October 2024 after the demise of his half-brother Ratan Tata, had first enquired about succession planning with Harish Manwani, the chairman of Tata Sons’ three-member nomination and remuneration committee (NRC), in January last year.
Manwani “responded positively” to Noel Tata, acknowledging that the committee would look into it, according to two executives privy to the development.
In February this year, Noel Tata again asked the NRC chair about whether the group had made any progress on succession planning. There was no clear answer offered by Manwani, according to one executive.
An email sent to Manwani seeking his response went unanswered. An email sent to Noel Tata and the Tata Trusts also elicited no response.
The Tata Sons NRC comprises Manwani, Chandrasekaran and Tata Trusts nominee Venu Srinivasan.
As early as July 2025, the two principal entities of the Tata Trusts—Sir Ratan Tata Trust and Sir Dorabji Tata Trust—had approved a third term for Chandrasekaran. The trustees had even agreed to relax the retirement-age criterion for Chandrasekaran, allowing him to continue as executive chairman beyond his 65th birthday. Chandrasekaran turned 63 in June.
Onus on board
However, Noel Tata’s decision to step down from the board of the Tata Group companies by November, when he turns 70, the mandatory retirement age for non-executive directors, puts the onus on the six-member Tata Sons’ board members to start the succession planning, according to an executive privy to the development.
“The simple point is that the NRC of Tata Sons did not have any succession planning in place,” said the first executive. “This despite a board member repeatedly asking them to have one. That is the question the board of Tata Sons needs to answer.”
“There must have been informal discussion and agreement about continuation of Chandra. NRC might not have felt the need to conduct a formal succession exercise when it was assumed to be a continuation of the incumbent,” said Kavil Ramachandran, a professor of entrepreneurship (practice) at the Indian School of Business. “It is fair to assume that the NRC had considered Chandra’s challenges to be due more to external, uncontrollable factors. The scenario changed only when Noel Tata started signalling the need for a change. In hindsight, one can say that the NRC and board ought to have completed a formal process and avoided precipitation like this, which is bad for everybody.”
Godrej Consumer
Chandrasekaran’s decision to step down at Tata Sons came less than a day after the Godrej Group’s flagship company, Godrej Consumer Products Ltd (GCPL), informed the exchanges on Tuesday of CEO Sudhir Sitapati resigning. This came after the Godrej board granted Sitapati a second five-year term and shareholders approved the decision on 7 August.
The company appointed its global chief financial officer Aasif Malbari as the new CEO on the same day. Godrej Consumer chair Nisaba Godrej underlined the importance in an analyst interaction on Tuesday evening.
“So, this reappointment was approved by the GCPL board on 6 May and intimated to the exchanges the same day. The AGM notice went to shareholders on 16 July. At neither point was the change under consideration. Voting had been open since 3 August, and shareholders were casting their votes. The AGM was held on 7th August, and Sudhir resigned on 10th August in the evening as MD and CEO of GCPL. The board met this afternoon on 11th August and appointed Asif as MD and CEO with immediate effect. Sudhir wanted this with immediate effect. This was his request. And since we had a ready successor plan in place within GCPL, we agreed,” Nisaba Godrej told analysts on Tuesday.
For now, the Tata Group faces four challenges.
Firstly, Tata Sons faces a possible stock market listing, prompted by the Reserve Bank of India’s regulations, posing an existential dilemma that could fundamentally change how the Tata Group holding company runs India’s largest conglomerate. Secondly, Tata Sons needs to provide an exit for the Shapoorji Pallonji Group, which owns 18.38% of the group company and, over the last year, has twice endorsed the holding company going public.
Ballooning losses in privately held new businesses, including Air India and Tata Digital, are the third challenge. Finally, Noel Tata now has to find a successor to Chandrasekaran.
“There is much relief that the uncertainty has gone,” said an observer tracking Bombay House.
He was referring to Chandrasekaran’s decision not to seek a renewal, thereby giving the Tata Trusts a free hand to set up a selection committee and look for a successor.