NEW DELHI: According to persons aware of discussions, Tata Sons Ltd, the holding company for India's largest conglomerate, is considering a historic overhaul of its leadership structure by introducing a chief executive officer (CEO) job to help enhance corporate governance.The CEO will oversee the 153-year-old company's expanding businesses under the proposed plan.
The president will oversee the chief executive on behalf of shareholders, according to the persons, who asked not to be identified since the material is private.Ratan Tata, the elderly head of controlling owner Tata Trusts, is considered as critical to the change's implementation,
they claimed.After his tenure ends in February, current Tata Sons chairman Natarajan Chandrasekaran is being considered for a renewal, while the leaders of various Tata group firms, including Tata Steel Ltd., are being considered for the CEO role. said the people.According to the sources, no final decision has been made, and the plan and details could still change.A spokesperson for Tata Sons declined to comment. Ratan Tata and the Tata Trusts did not reply to emails sent to them.
The idea comes months after Ratan Tata, 83, won a years-long legal struggle with his successor, Cyrus P Mistry, who accused Tata Sons of mismanagement and sued the patriarch for ousting him in 2016.The projected overhaul might help the conglomerate plot a course for the future following more than two decades of expansion under Ratan Tata's leadership.Who will succeed him as chairman of the Tata Trusts, which holds 66 percent of the holding company that runs the empire that dates back to 1868, is unknown. A new group CEO will face numerous hurdles.
Tata Steel is battling a $ 10 billion net debt load, while Tata Motors, which owns the famed British brand Jaguar Land Rover, has lost three years in a row until March 2021. The company's aim to expand into the digital domain and take advantage of India's rising online shopper base has also failed. Despite possessing Tata Consultancy Services Ltd, Asia's largest software service provider, the company's ambition to create an all-in-one e-commerce super app to sell its extensive variety of consumer products and services has been postponed.
The Tata group has a total annual revenue of $ 106 billion in 2020, with more than 100 businesses and more than two dozen publicly traded firms. Its 750,000 employees, among other things, produce cars and trucks, mix tea, forge steel, sell insurance, design software, administer telephone networks, and pack salt packets.As per them, the proposed leadership review is in line with an Indian market regulator's recommendation that the country's top 500 publicly traded companies have a separate chairman and chief executive by April 2022 for improved governance. folks.
Regardless of the fact that Tata Sons is not on the list, the modification, according to the sources, will help enforce the law.Ratan Tata, who continues to steer the firm, could see himself transitioning from his current status as semi-retired president emeritus with the addition of a professional manager at the top.Although Ratan Tata claims he is no longer directly involved in business decisions, his presidency of the Tata Trusts gives him massive impact over the group's management.Following a news storey in July claiming that Chandrasekaran's term as president had been "informally authorised,"
Ratan Tata issued a statement saying that the board had not made a decision and that no one had approached him about the matter, increasing his clout.Despite the family ties, Ratan Tata's influence over the company stems from his time as president of Tata Sons from 1991 to 2012.He put the Tata group on the map all around world with a series of eye-catching purchases over the last two decades, ranging from the $ 2.3 billion purchase of automobile JLR to the $ 13 billion purchase of British steel giant Corus Group Plc.
Source: Times Of India
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