Tata Sons won’t discuss Chandrasekaran’s third term at board meet on Friday

Bengaluru/Mumbai: The Tata Sons board is not expected to discuss chairman N. Chandrasekaran’s third term in its meeting scheduled for Friday, according to people aware of the matter. His current term ends in February 2027, and the board postponed its decision on his reappointment less than four months ago.

Instead, the focus will be on the group’s performance in the 2026 financial year and plans for the current financial year, according to executive information on the development. The absence of any discussion about Chandrasekaran’s future is striking, given that the issue exposed differences within India’s largest conglomerate earlier this year.

“There is no rush for a discussion on Chandrasekaran’s tenure. There is time for this to happen. It is not part of the agenda and is unlikely to be discussed,” a Tata executive said.

An email sent to Tata Sons seeking comment remained unanswered.

Tata Sons’ six-member board 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 appointed Chandrasekaran as president for the first time in 2017 and extended his term in 2022, postponed its decision to give him another term at its meeting on February 24, 2026. The surprise development comes after Noel Tata sought a clear roadmap for the performance of some of the new businesses launched under Chandrasekaran’s watch, including e-commerce, aerospace and semiconductors.

Alleviating concerns

To allay concerns, Chandrasekaran presented the chief executives of new-age businesses, including Air India, Tata Electronics and Tata Digital, to a special board meeting on May 26 to detail their performance, capital requirements and three-year roadmap. Then, in a six-and-a-half-hour meeting at Bombay House, Noel Tata led the discussions along with Harish Manwani, chairman of Tata Sons’ nomination and remuneration panel.

Noel Naval Tata was appointed chairman of Tata Trusts on October 11, 2024, following the death of his half-brother Ratan Tata on October 9. His objection at Tata Sons’ board meeting in February this year was a rare instance of dissent since Tata Trusts was a representative on the Tata Sons board.

Noel Tata is reconsidering his position after the two main trusts under his chairmanship – Sir Ratan Tata Trust (SRTT) and Sir Dorabji Tata Trust (SDTT) – confirmed Chandrasekaran’s third term in July last year. At that time, the board of trustees even agreed to relax retirement age criteria. Philanthropic organizations own 65.9% of Tata Sons, the holding company that operates and owns more than two dozen listed firms, including Tata Consultancy Services Ltd, Tata Steel Ltd and Tata Power Ltd.

Performance concerns

He, however, expressed concerns about Tata Sons’ performance and the capital commitment required for new bets. Tata Sons has invested a total of over $11 billion in Air India, Tata Electronics and Tata Digital.

Some of these businesses appear to have potential. However, concerns about cash haemorrhage from their mounting losses and dependence on parent company Tata Sons are one reason why Noel Tata has pushed the board to implement a succession plan.

“The first thing to understand is that it is not a question of whether someone should be given a new term. The point is that a company should have a succession plan,” said a second executive from Tata Group.

Noel Tata supports extending Chandrasekaran’s term by two years instead of the usual five years; The Tata Trusts chairman believes that this period will be sufficient to establish a new leadership structure and succession process. Mint He reported on March 18.

One reason is that Chandrasekaran, who turns 64 next year, will be approaching 65, the mandatory retirement age for all executive chairmen of Tata firms. Noel Tata resigned as managing director of Tata International after turning 65 in November 2021. He will also step down from non-executive roles at Tata Group companies, including Trent and Tata Steel, later this year when he reaches 70, the retirement age for non-executive directors.