Tata Sons’ transition reflects the group’s “high degree of professionalism”, says corporate governance veteran Haribhakti, who says the next phase will depend on AGM, trustee-board changes and RBI’s stance
N Chandrasekaran’s decision to step down as chairman of Tata Sons should not be viewed as the creation of a leadership vacuum but as an orderly transition within India’s largest business group, according to corporate governance veteran Shailesh Haribhakti.
Haribhakti, Chairman of Shailesh Haribhakti Associates and a leading voice on corporate governance, told Firstpost that Chandrasekaran’s decision reflects the “high degree of professionalism” associated with the Tata Group and could pave the way for a broader leadership and governance reset.
“I don’t think we should see it as that at all. We’ve always seen somebody step in and take charge,” Haribhakti said, rejecting the idea that Chandrasekaran’s exit would leave Tata Sons without effective leadership.
Chandrasekaran’s current term runs until February 2027. His decision not to seek another term has nevertheless come amid reports of differences between Tata Sons and Tata Trusts over capital requirements, business strategy and governance.
Haribhakti said he would not characterise the move as being “triggered” by those differences but acknowledged that several developments point towards an ongoing transition within the group.
“We’ve seen a particular director step off a particular trust board. We’ve seen there being a postponement of the renewal of Mr Chandrasekaran. We’ve seen so many different things which are hints at the fact that there is a transition going on and that there is a leadership shift going on,” he said.
More from BusinessAccording to Haribhakti, the scale of the Tata Group’s operations and the challenges confronting its businesses make a governance reset unsurprising.
“The situations are so fluid, the risks are so large, and the challenges are so immense that it’s not surprising that a leadership and a governance reset is happening,” he said.
He also credited Chandrasekaran with a strong tenure, while acknowledging that the group has faced setbacks during his leadership.
“Mr Chandrasekar has had a fabulous tenure. Some wins, some not-so-big wins, or some losses,” Haribhakti said, adding that some losses in group companies were “of a magnitude that perhaps were not expected, not anticipated.”
The bigger question now, he said, is how the transition unfolds. The Tata Sons AGM, changes to trustee boards and the Reserve Bank of India’s stance will be important developments that could shape the group’s next phase and influence the profile of its next leader.
“Let’s see what happens. Let’s see the outcome of the AGM,” Haribhakti said. “All of these are events which will play out over a period of time, and that will in many ways influence the course of events and also the kind of person that we need to come in as their leader.”
Haribhakti believes the transition is likely to be driven largely by “volunteerism”, with new people coming in as existing members step aside or are not re-elected.
“The basic DNA of the Tata Group is to let things happen in a normal, natural, professional way,” he said. For Haribhakti, therefore, Chandrasekaran’s exit is less about a sudden power vacuum and more about Tata Group entering a potentially consequential new chapter.
“I would just wait, watch, and just pray that the transition happens smoothly,” he said, “and in a way that when you come to the other side, things will be even better and we will see the Tata Group flying high as it has done so far.”
