Tata Trusts may induct Noel as it looks to rejig composition, say sources

Noel Tata is chairman of Trent and managing director of Tata International
There could be a rethink at the $103-billion salt-to-software Tata group on Noel Tata, chairman of Trent and managing director of Tata International. As Tata Trusts, a cluster of charitable organisations that controls 66 per cent of Tata Sons, looks to rejig its composition, the induction of Noel Tata, half-brother of Ratan Tata, is being considered in a significant departure from the past, sources in the group said. 

Tata Trusts didn’t respond to a query on the subject.

There had been much speculation earlier around Noel Tata, now 61, being groomed to succeed Ratan Tata as head of the Tata group. Subsequently, Cyrus Mistry, Noel Tata’s brother-in-law, was named chairman of the group in 2011. 

Mistry took charge as chairman in 2012. Then in 2016, when Mistry was removed, Noel Tata’s name came up again as a possible contender for the top job. But a search committee narrowed down on N Chandrasekaran, then Tata Consultancy Services (TCS) CEO. Chandrasekaran was appointed Tata Sons chairman in January 2017. 

Besides fresh inductions, Tata Trusts, chaired by Ratan Tata, could even decide on a vice-chairman sometime soon. While there’s no confirmation on the name, a couple of Tata Sons board members as well as trustees could possibly be considered for the Tata Trusts vice-chairman’s position, the sources quoted above pointed out.

Both Tata Sons and Tata Trusts have witnessed exits recently. Nitin Nohria, Indian-born American academic, stepped down from the Tata Sons board in August. He was a nominee of Tata Trusts. More recently, Bain Capital Managing Director Amit Chandra stepped down from the board of Sir Ratan Tata Trusts and then resigned from the board of directors of Tata Sons. 

According to Tata Sons' Articles of Association, the holding company can have as many as 12 directors and Tata Trusts can nominate one-third of the directors on the company’s board. While Tata Trusts trustees can induct a new trustee through a consensus process, Tata Sons board inductions require the board approval. 

ALSO READ: How Tata Trusts plans to take health care services to rural India's fringes

As part of the Tata family, and married to Aloo Mistry, daughter of Pallonji Mistry, the largest single shareholder in Tata Sons, the low-key Noel Tata’s entry into Tata Trusts, if it were to happen, would be widely watched, a source said. With the idea of reinforcing continuity and cohesion between Tata Sons and Trusts, sources said, in future Chandrasekaran could be inducted as a trustee too. No timeline has been decided on that yet. The chairman of both Tata Sons and Tata Trusts remained the same till the time Ratan Tata headed the group. That changed for the first time when Cyrus Mistry took over as Tata Sons chairman in December 2012 and Ratan Tata continued to chair the trusts. 

Tata Trusts was established in 1919, but the activities took off in a big way when Sir Dorabji Tata set up a trust in 1932. Over the years, the significance of the Trusts has grown in terms of its commercial interest in the Tata group and the power it holds, even as charity remains its core area, according to an official. Because it sits over a big business empire, Tata Trusts is different from any other trust of a corporate group, he added. 

Business Standard is now on Telegram.
For insightful reports and views on business, markets, politics and other issues, subscribe to our official Telegram channel