Tolani Maritime Institute
Tata conglomerate is India’s largest business group running businesses in seven sectors in more than eighty countries and providing employment to over 4,25,000 people. Tata Sons is the holding company of the Tata Group. Sir Cyrus P Mistry was the sixth Chairman of Tata sons. The information pertaining to the chairmen of Tata Sons is given in Table 1.
|Name||Position||Tenure and Contribution|
|Sir Jamsetji Nusserwanji Tata||Founder of the TATA group||Began with a textile mill in central India in the 1870s|
|Sir Dorab Tata||Chairman, Tata sons*||1904 – 1932, setting up Tata Steel and Tata Power|
|Sir Nowroji Saklatvala||Chairman, Tata sons||1932 – 1938, consolidated the core businesses of iron and steel, cotton mills, banking, and hydro-electric works. Merged several cement businesses in India leading to the establishment of ACC|
|Sir JRD Tata||Chairman, Tata sons||1938 – 1991, launched the airline now known as Air India|
|Sir Ratan N Tata||Chairman, Tata sons||1991 – 2012, The Government of India honoured Mr. R. Tata with Padma Vibhushan, in 2008|
|Sir Cyrus P Mistry||Chairman, Tata sons||2012 – 2016, earlier the managing director of Shapoorji Pallonji Group. When Sir C. Mistry was at the helm of the Shapoorji Pallonji group, the business grew into a billion-dollar enterprise and executed complex projects in marine, oil and gas, and rail sectors.|
(*Ratan Tata is the lifetime chairman of Tata Sons Ratan Tata and Tata Trusts together control 66% in Tata Sons. Pallonji Shapoorji Mistry owns 18.5% stock in Tata Sons1.)
Sir Cyrus Mistry’s tenure as the Chairman of Tata Sons was cut short in a board meeting conducted on October 24, 2016. Mr. Mistry was the Chairman of Tata sons for the shortest period of time hitherto. Cyrus Mistry’s widely leaked explosive 2,100-word mail2 (shown in Exhibit 1) to the board targeting Ratan Tata and the luminaries close to him with a string of allegations related to questionable deals and steps brings out many bitter facts. According to Cyrus Mistry, his dismissal was illegal and invalid. Cyrus Mistry also claimed that the Articles of Association of the holding company were changed after he took office, “alternative power centres” had been created reducing him to the position of a lame-duck chairman”.
Several theories have been built to explain Cyrus Mistry’s ouster. These theories dwell on under-performance, clash of cultures, reversal of policies and practices, erosion of values, handling of certain delicate situations, Mistry’s inability to deliver on the promises he made at the beginning of his tenure, Mistry kept his plans secret from the directors, although the directors were asking for more visibility.
Finding Cyrus Mistry’s successor will be an uphill task because the prospective successor would demand:
(i) Reasons for Mistry’s ouster,
(ii) Autonomy in operations,
(iii) Well-defined reporting and governance structure,
(iii) Details pertaining to exit/severance package
1. The Times of India, “Sacked Chairman Didn’t Deliver On His Initial Promises; Executives From Within Weren’t Elevated to Board: Tata Loyalists. Mistry failed to keep trust of Trusts: Insiders”, October 28, 2016, pg 19
2. The Times of India, “We’ll prove to the public Mistry’s lying: Tata Sons”, October 28, 2016, pg 1