Tata Group Chairman N Chandrasekaran to step down in February

N Chandrasekaran, chairman of the Tata Group, announced he will not seek reappointment when his term ends in February. The 63-year-old made the decision after the Tata Sons board failed to reach an agreement on extending his five-year term, months after initially proposing it. The news caused listed Tata company shares to plummet and raised questions about the future of the conglomerate, which includes Air India, Tata Steel, and Jaguar Land Rover.

Tata Sons, a charitable arm with 66% ownership in the group, has had governance issues due to its dual non-profit and commercial objectives. There were disagreements over board nominations, funding approvals, and the public listing of Tata Sons. Chandrasekaran's resignation, coming days before the annual general meeting, highlights the tensions that have emerged over the past months following a power struggle in the boardroom.

The Tata Group's unique structure, with Tata Trusts owning 66% of Tata Sons, has led to tax and regulatory benefits but has also created governance challenges. The internal disputes threatened to distract the group while it faced business headwinds, such as reviving Air India, which was acquired from the Indian government in 2022.

When the extension proposal was presented to the board in February, one member opposed it, according to Chandrasekaran's statement. He stated that the lack of unanimous support led him to defer the decision, as there was still no resolution six months later. Chandrasekaran, appointed chairman in 2017, replaced Cyrus Mistry, whose removal had sparked a legal battle.

Prior to becoming chairman, he served as CEO and managing director of Tata Consultancy Services, a global IT service provider. Experts believe that when a leader of Chandrasekaran's stature steps down, markets will react negatively, but there is likely to be a successor chosen from within the group in the next six months.