Noel Tata, the half-brother of Ratan Tata, was appointed the chairman of Tata Trusts on Friday. The 67-year-old came very close to becoming the chairman of Tata Sons, the holding company for Tata Group, about 12 years ago.
In the run-up to Ratan Tata’s succession, there was speculation that Noel would eventually step into his shoes. But there was a twist in the tale. In August 2010, a five-member selection committee was announced, some 30 months before Ratan Tata was due to retire in December 2012, when he was turning 75. The selection panel was packedwith Ratan Tata loyalists, except for one. The members were N. A. Soonawala, R K Krishnakumar, Lord Bhattacharya, Shirin Bharucha, and Cyrus Mistry.
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Cyrus Mistry, the relatively unknown and younger son of Pallonji Mistry, was representing Shapoorji Pallonji Group. At that time, Mistry’s inclusion baffled many, as the Tata Group and the Shapoorji Pallonji Group have historically had a strained relationship, despite Cyrus’s father, Pallonji Mistry’s efforts to mend the relationship over the years. The young Cyrus Mistry was already part of the Tata Sons Board. Ratan Tata respected the Mistry family’s 18.5% stake and included Cyrus Mistry in the selection panel. But he was the lone voice, which could have supported Noel Tata’s candidature. Interestingly, Noel had a family connection on both sides, being married to Cyrus Mistry’s sister Aloo.
As the selection process began, Ratan Tata gave a clear mandate: the new chairman should be a professional — global or Indian — with over three decades of experience, capable of managing a multicultural workforce and overseeing large businesses across different sectors and countries. Several names — including Indra Nooyi of PepsiCo, Arun Sarin of Vodafone, Carlos Ghosn of Nissan, and Nikesh Arora of Google — were considered.
However, the committee faced several challenges. First, the structure of the Tata Group presented some complications, as it had two power centres: Tata Trusts, which controlled 66% of the holding company, and Tata Sons with old guards. In addition, the Mistry Group held an 18.5% stake. In fact, the committee soon realised that convincing global professionals to leave their lucrative positions abroad to navigate India’s complex business and political environment was difficult. Many asked for ESOPs, which was not possible.
As a result, the committee had to shift its focus to Indian professionals within Tata Group. Another hurdle emerged when the older guard within Tata, many of whom were over 60, resisted appointing a younger chairman. The older lot, nearing retirement, could only commit to a few years, whereas the committee was looking for someone who could lead for at least 10-15 years, as Ratan Tata had been chairman for over two decades and J R D Tata, before him, for over 50 years.
There was a dead end. And when there was no consensus on a Tata professional, sources suggest the Shapoorji Pallonji Group began pushing for Noel Tata’s candidacy, as he was part of the Tata family and had experience managing several Tata companies. The Tata name would have helped maintain cohesion within the group.
Ratan Tata, however, was not in favor of Noel’s appointment. He even gave an interview to a foreign newspaper that Noel lacked experience. This was an indirect hint to the selection committee, which was getting some pressure on Noel’s name. Ratan Tata’s statement was also interpreted by many as him influencing the committee decision.
And thus Noel was finally out of the race.
At that point, Cyrus Mistry’s name began to gain traction within the committee. When the idea was presented to Ratan Tata, he also accepted Mistry as the right candidate. But Mistry initially declined the offer. He, too, lacked experence of handling a large business house as big as the Tatas, even though he was part of the decision-making body at Tata Sons.
After being persuaded by family members and Tata veterans, Mistry eventually agreed to take on the role.
Today, N Chandrasekaran is well settled at Tata Sons as the Chairman.
With Ratan Tata’s passing away, a vacancy came at Tata Trusts, and this time around the field was wide open for Noel Tata. Most of the old Tata guards are also out of the system. There is no opposition to Noel Tata’s chairmanship at Tata Trusts, which controls Tata Sons. Noel is the only member of the Tata family with experience. And he has finally made it.
The path is also clear for the next generation of the Tatas — Noel’s son Neville and two daughters Maya and Leah — to take bigger roles in operating companies and gain experience. In the next few decades, they will surely be ready to claim the top slot at Tata Sons, a post that came so close to Noel Tata, yet he lost out.
