Tatas look to bring back veterans to head key group companies
The group plans to bring them in non-executive roles, or in similar functions which could be individually etched, the sources added.business Updated: Nov 28, 2016 23:44 IST
The Tata group is exploring options of bringing back veterans to helm key group companies as the Mumbai-based conglomerate seeks to steady its course amid a bitter leadership dispute sparked by the removal of Cyrus Mistry as group chairman.
According to sources, some of the senior executives who have been approached include former Tata Steel managing director Hemant Nerurkar, former Tata Industries managing director Kishore Chaukar and former Tata Motors MD Prakash Telang.
The group plans to bring them in non-executive roles, or in similar functions which could be individually etched, the sources added.
Mistry was ousted as chairman of holding company, Tata Sons, in a boardroom coup in October after the company criticised his performance. Since then, Mistry and Tata Sons have been involved in a war of words blaming each party for problems in the $100-billion salt-to-software conglomerate.
The move would be significant as it could be preceded by a change in the retirement limit for board members and may also include a change in the organisation structure where the head of Tata Sons need not head group companies.
The sources also added the age limit may be left untouched if the former veterans could be brought in as advisers or consultants, which will not prompt any compliance with age specifications. The maximum age for a director on board is 70 years, while that for the chairman is 75 years.
After Mistry’s removal, group patriarch Ratan Tata, 78, came out of retirement to take charge of the business empire but said his role was temporary.
Tata Sons denied the possibility of bringing back old hands.
“I am categorically stating that this information is completely unfounded and baseless. These rumours seem to be intended at destabilising the Tata group,” said a spokesperson.
Efforts to contact Nerurkar and Chaukar did not yield any result as they did not respond to queries on the issue. Telang could not be reached.
However, the group has already tested waters in this direction when on November 3, it appointed former Tata Power MD and former Air Vistara chairman Prasad Menon, to steer the new management at Tata Sons.
“All the three companies (Tata Steel, Tata Industries and Tata Motors) are vital to the group. Apart from having steady hands, the thinking is that familiar and experienced leaders would be needed as it is likely the legal fight on leadership will take some time,” said the sources.
Tata Steel is going through a crucial phase especially related to its European operations where a restructuring through sale of some plants is being considered.
Tata Industries has been giving shape to future plans, particularly on the group’s digital scope. Tata Motors, yet another flagship, also operates the highly profitable Jaguar Land Rover.
But the vesting of crucial powers with former veterans could prompt a change in structure.
“The group is aware that the veterans need to be given autonomy to carry out growth plans,” said one person familiar with the move. Among the options that the group could look at is splitting the chairman’s function so that the overall group head is not directly involved in the day-to-day functioning of group companies.
It is, however, still unclear whether the Tata group would retain existing human resources model that were prepared during Mistry’s tenure, including the leadership competency model. The new model had replaced the Tata leadership practices that were in use since 2002. The new model was to be implemented soon.