Bengaluru/Mumbai: Tata Sons' board is not expected to discuss a third term for chairman N. Chandrasekaran at its meeting slated for Friday, according to people aware of the matter. His current tenure ends in February 2027, and the board had deferred a decision on his reappointment less than four months ago.
Instead, it will focus on the group's performance in the financial year 2026 and the plans for the current fiscal year, according to an executive privy to the development. The absence of any discussion on Chandrasekaran's future is notable, given that the issue had exposed differences within India's largest conglomerate earlier this year.
"There's no hurry (for a discussion on Chandrasekaran's term). There is time for it to happen. It is not part of the agenda and unlikely to be discussed," said a Tata executive.
An email sent to Tata Sons seeking comment went unanswered.
The six-member board of Tata Sons includes Chandrasekaran and Tata Trusts chairman Noel Tata. The other members are Venu Srinivasan, group chief financial officer Saurabh Agrawal, and independent directors Harish Manwani and Anita Marangoly George.
The board, which first appointed Chandrasekaran as chair in 2017 and extended his term in 2022, had deferred a decision on granting him another term at its 24 February 2026 meeting. The surprise development came after Noel Tata sought a clear roadmap for the performance of some of the new businesses launched under Chandrasekaran’s watch, including e-commerce, aviation and semiconductors.
Assuaging concerns
To assuage concerns, Chandrasekaran had the chief executives of the new-age businesses, including Air India, Tata Electronics, and Tata Digital, present at a special board meeting on 26 May to detail their performance, capital requirements, and a three-year roadmap. Then, over a six-and-a-half-hour meeting at the Bombay House, Noel Tata, along with Tata Sons’ nomination and remuneration panel chair Harish Manwani, led the discussions.
Noel Naval Tata was appointed chair of the Tata Trusts on 11 October 2024, following the death of his half-brother, Ratan Tata, on 9 October. His objection at the Tata Sons’ board meeting in February this year marked a rare instance of dissent since he became the Tata Trusts representative on the Tata Sons board.
Noel Tata is reconsidering his position after the two principal trusts under his chairmanship—Sir Ratan Tata Trust (SRTT) and Sir Dorabji Tata Trust (SDTT)—endorsed a third term for Chandrasekaran in July last year. At the time, the trustees had even agreed to relax the retirement age criteria. The philanthropic entities own 65.9% of Tata Sons, the holding company that runs and owns over two dozen listed firms, including Tata Consultancy Services Ltd, Tata Steel Ltd and Tata Power Ltd.
Concerns on performance
He, however, voiced concerns about Tata Sons' performance and the capital commitment required for its new bets. Tata Sons has invested a total of over $11 billion in Air India, Tata Electronics, and Tata Digital.
Some of these businesses are seen to have potential. However, concern over them haemorrhaging cash, stemming from their surging losses and dependence on parent Tata Sons, is a reason why Noel Tata has been pushing the board to implement a succession plan.
“The first thing to understand is that it is not about whether someone should be given a fresh term or not. The central point is that a company needs to have a succession plan,” said a second executive at the Tata Group.
Noel Tata favours extending Chandrasekaran's tenure by two years, rather than the usual five, a term the Tata Trusts chairman believes will be sufficient to establish a new leadership structure and succession process, Mint had reported on 18 March.
One reason is that Chandrasekaran, who turns 64 next year, will be nearing the mandatory retirement age of 65 for all executive chairs of Tata firms. Noel Tata had himself stepped down as managing director of Tata International in November 2021 upon turning 65. He will also step down from non-executive roles at Tata Group companies, including Trent and Tata Steel, later this year, when he turns 70, the retirement age for non-executive directors.