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Shining star: Why is N Chandrasekaran best suited to lead Tata Sons

After more than two months of high-profile boardroom battle at the Tata Group, Natarajan Chandrasekaran has been named the new chairman of Tata Sons

business Updated: Jan 13, 2017 09:45 IST
Sunny Sen and Suchetana Ray
India’s $100 billion salt-to-software conglomerate Tata Sons named Natarajan Chandrasekaran as their new chairman on Thursday.
India’s $100 billion salt-to-software conglomerate Tata Sons named Natarajan Chandrasekaran as their new chairman on Thursday.(PTI File Photo)

After more than two months of high-profile boardroom battle at the Tata Group, Natarajan Chandrasekaran has been named the new chairmanof Tata Sons, the holding company of the salt to software conglomerate.

Chandrasekaran, fondly called ‘Chandra’ by people at Bombay House, Tata Group’s headquarters, took over Tata Consultancy Services in October 2009 as its CEO and managing director, and is credited for its turnaround. TCS is the most successful Indian IT company valued at $67 billion – that’s 60% of the group’s market value and 70% of Tata Son’s revenue.

His friends often said, one day Chandra will become a corporate legend. Truly, he is.

Chandra’s story is like a Bollywood saga of a small town boy making it big. He comes from Mohanur village in Tamil Nadu, where he spent his initial years, and now lives in a sea-facing apartment in Mumbai.

On October 24, Ratan Tata took over the board after the ouster of Cyrus Mistry (Shapoorji Pallonji, Mistry’s family-promoted firm holds 18.4% stake Tata Sons) as the interim chairman, with a deadline that he will announce a new chairman within 90 days.

Chandra has already proven his operational and leadership skills at TCS, but now has a much bigger duty to fulfill. The ugly spat between the Tatas and Mistrys has caused a dent in the group’s image. He will have to reconstruct that.

Chandra, who joined TCS in 1987, grew up inside the Tata Group and learnt its values and ethics. This was one of the main reason why Mistry’s chairmanship didn’t go well with the Tata board. He wanted to alter the way the group has been running all these years.

But still, Chandra remains an outsider.

To be sure, Chandra is not a family member (except for two, Tata Sons has always had a family member to chair its board). However, “I am glad that the announcement was made within two months, uncertainty is not good for a group as big as Tata Sons. Chandra has a right values and is a trusted insider, so is the best choice,” said Arun Maira, former planning commission member and a former Tata Motors board member.

Insiders also said that Chandra is a people’s person, and is loved by all. That was evident. The selection committee unanimously decided on Chandra’s candidature, who will take over from February 21.

However, his biggest challenge will be that Chandra has never handled some of Tata’s other large businesses such as steel, motors, neither has he restructured a conglomerate.

Some of these businesses have been the reasons for Mistry’s ouster. Chandra will have to be careful. To his benefit, Chandra’s understanding of running a company comes from real-life experiences of making TCS the crown jewel of the Tata Group. Chandra has shown ingenuity, when he decided to divide the software company into smaller divisions to go after specific businesses.