Going gets tough for Tata succession panel

MUMBAI: The $72-billion Tata Group is facing challenges in finding a successor to chairman Ratan Tata. India's largest corporate house may be forced to review the selection parameters after struggling to shortlist potential candidates in the past eight months.

Tata Sons, the group's holding company, had set up a high-profile selection committee in August 2010, which was expected to name the successor by March this year. Tata, who transformed the group into an international conglomerate, will retire in December 2012 after turning 75. The group's internal magazine published a recent interview with Tata Sons director, and one of the search panel members, R K Krishna Kumar, in which he said: "Our committee has come to the conclusion that we cannot find a replacement for Mr Tata!," and goes on to add that, "We may have to change and rearrange the model in terms of what we are looking for."

"There are challenges but we will soon come to a conclusion," Krishna Kumar said. The committee has met some nine times since it was constituted. Tata Group has been searching for business leaders both within and outside the conglomerate with emphasis on candidates having managed a global enterprise. Besides, the candidate should also fit into the group's value and cultural framework.

Several well-known names, including Tata's half brother Noel Tata have been doing the rounds for the coveted post but the group has not reacted to any speculation till date. The deadline to name a successor is now being extended. The group had earlier set a March deadline to provide the successor enough time in understanding the group's functioning.

In the past, Tata had stated that his successor could be an Indian or a foreigner. Till now, the 140-year-old group has had five chairmen with four of them being from the Tata family. The one non-Tata chairman was Nowroji Saklatwala. The group has a presence in almost all sectors from salt-to-steel and tea-to-telecom and is spread across the globe. More than 60% of its revenues now come from overseas following a string of global acquisitions which include Corus, Jaguar Land Rover, General Chemicals and Tetley. Though Tata intends to keep his date with retirement, several shareholders of the group's listed companies had suggested that he should continue to be chairman emeritus and oversee the group's operations.
PGDM 2nd (2010-12)