Bengaluru and Mumbai: N . Chandrasekaran's decision to step down as chairman of Tata Sons has stirred up concerns over the group's succession planning. In letter to the six-member board,he said he wouldn't seek another term after February 2024. This puts spotlight on an issue Noel Tata, chairman of Tata Trusts, had flagged earlier.
Chandrasekaran, at the helm since 2017, exits amid repeated calls from Noel Tata for a succession plan . He first raised it with Harish Manwani,head of Tata Sons’ nomination and remuneration committee (NRC), back in January 2022. Manwani seemed to agree,but nothing concrete followed. Noel Tata pushed again in February 2023,still no clear response.
The NRC,with Manwani, Chandrasekaran, and Venu Srinivasan from Tata Trusts,has been criticized for inaction. Even after trustees approved a third term for Chandrasekaran in July 2025 and eased his retirement age, a formal plan remains elusive. Chandrasekaran,63,was expected to lead past 65 .
Noel Tata, set to leave Tata Group boards by November at 70, has ramped up pressure on Tata Sons to act. An insider said the NRC failed to craft a clear succession plan, despite Noel Tata's repeated requests .
“The simple point is that the NRC of Tata Sons did not have any succession planning in place,” said one executive. “This despite a board member repeatedly asking them to have one . That is question the board of Tata Sons needs to answer.”
Experts think informal talks led the NRC to assume Chandrasekaran would stay on, blaming his hurdles on outside factors. Kavil Ramachandran from the Indian School of Business noted the NRC might have underestimated the need for a formal process.
Chandrasekaran's move comes a day after Sudhir Sitapati, CEO of Godrej Consumer Products Ltd (GCPL),also resigned. His exit followed approval for a second term,ratified by shareholders on August 7. The board quickly named Aasif Malbari,global CFO,as new CEO.
During an analyst call, Nisaba Godrej,chair of Godrej Consumer,explained Sitapati asked to leave immediately,which the board allowed due to an existing succession plan . This quick action sharply contrasts with Tata Sons' uncertainty.
Tata Group faces more hurdles. A potential stock market listing looms, driven by new Reserve Bank of India rules,possibly changing the conglomerate's operations. It must also handle an exit for Shapoorji Pallonji Group,holding an 18.38% stake, who supports a public offering.
Plus,Tata Sons deals with losses in new ventures like Air India and Tata Digital. With Noel Tata's impending exit, finding Chandrasekaran's successor is urgent.
Some feel relieved by Chandrasekaran's decision. It gives Tata Trusts a chance to set up a selection committee and start search for a new leader .
