Tatas mull Group CEO post to ease chairman's workload

The five-member selection committee set up to find a successor to Tata Group chairman Ratan Tata is discussing the creation of a new post of group chief executive officer at Tata Sons.

Ratan Tata, who will demit office in December 2012, is the chairman of Tata Sons.

This move is seen as a way to create an enabling structure for the new chairman, where he or she will have the support of an experienced team to share some of the responsibilities in running the conglomerate through Tata Sons.

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In April this year, R K Krishna Kumar, director at Tata Sons and one of the key members of the selection committee, had in an interview candidly admitted, "Our committee has come to the conclusion that we cannot find a replacement for Mr Tata!"

Krishna Kumar had also hinted the committee may have to 'rearrange the model' to make it easier for the new Tata chief to manage the hydra-headed group, with presence in 80 countries and more than 4,25,000 people on its payrolls.

Also, in a quiet move some time last year, Tata Sons appointed 56-year-old Farokh N Subedar as the chief operating officer of the board, again a new post created for the first time.

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Subedar was earlier the senior vice-president finance as well as company secretary at Tata Sons.

Sources in the know say a few names have cropped up for the Group CEO post, including that of Tata Sons finance director 64-year-old Ishaat Hussain. Tata Sons also has other directors, including R Gopalakrishnan (65 years), Arunkumar Gandhi (68), Farrokh Kavarana (67), Krishna Kumar and construction magnate Cyrus Pallonji Mistry, the largest single shareholder in Tata Sons, besides Ratan Tata.

A Tata Sons spokesperson, when contacted, said, "The selection committee mandated by the Tata Sons board to find a successor to Mr R N Tata is engaged with the task. It has interviewed both internal and external candidates.

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"It will be premature to share details of the progress of its endeavours, except to state that the committee is fully aware of the relevant timeline.

"The committee has requested us to convey to the media that it would not like to comment on any speculative report on this issue."

Just a few months ago, the board had lowered the retirement age of non-executive directors from 75 to 70.

That will not apply to non-executive directors already 70 or above, including Krishna Kumar and J J Irani, but some key people in the group -- including Tata Steel vice-chairman B Muthuraman, Tata Motors vice-chairman Ravi Kant and TCS vice-chairman S Ramadorai -- who have given up executive roles and will retire within the next four-five years when they turn 70.

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The search panel which was set up in August 2010 has N A Soonawala, former vice-chairman, Tata Sons, R K Krishna Kumar, director, Tata Sons, Cyrus Mistry, the younger son of Pallonji Mistry, Lord Bhattacharya, a businessman based in the UK who runs Warwick Manufacturing, and Shirin Bharucha, a lawyer for the group.

The panel is expected to name the successor to Ratan Tata by the year-end after an aggressive global search and amongst the hot favourites is Ratan Tata's half-brother Noel Tata, who after his successful stint in Trent (the retail business of the group) has also been giving the responsibility to run Tata International as its managing director.

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The activities of the Tata group are overseen by two key bodies.

The executive office reviews business activities of all group companies. Besides Ratan Tata, it has R Gopalakrishnan, Ishaat Hussain, Kishore Chaukar and Arunkumar Gandhi.

Then there is the group corporate centre, which reviews policy issues related to growth and takes decisions on entering new areas.

It also promotes the Tata brand and provides advisory services to group companies in human resources, finance and legal affairs.

It comprises Ratan Tata, R K Krishna Kumar, R Gopalakrishnan, Ishaat Hussain, Kishore Chaukar and Arunkumar Gandhi.