The board of Tata Sons has deferred a decision on reappointing chairman N. Chandrasekaran for a third five-year term, following concerns raised by Noel Tata, chairman of Tata Trusts, according to multiple media reports.
Mr Chandrasekaran’s current term runs until February 2027. While discussions had begun on initiating his renewal for a third term, the matter was deferred during a board meeting on Tuesday after Noel Tata flagged concerns relating to performance, capital allocation and governance, people familiar with the discussions told the publications.
According to Moneycontrol, the proposal to begin the renewal process did not proceed after Noel Tata raised issues about losses in some of the group’s newer businesses and the pace of capital deployment. The discussion broadened into a wider review of performance and governance before being deferred rather than put to a vote.
Mint reported that during the nearly three-hour board meeting at Bombay House, Noel Tata pointed to losses at companies, including Air India and Tata Digital, and sought clarity on the management of these businesses. He also reportedly asked for Mr Chandrasekaran’s views on discussions with Reserve Bank of India (RBI) regarding keeping Tata Sons a private company.
PTI, citing sources, says Noel Tata set forth a 'slew of conditions' for the reappointment which, ultimately, led to the decision being deferred.
The deferment is significant because the two principal entities of Tata Trusts — Sir Dorabji Tata Trust and Sir Ratan Tata Trust — had earlier approved a third term for Mr Chandrasekaran as early as July 2025, Mint reported.
The trustees had also agreed to relax the retirement age criterion to allow him to continue beyond 65. Mr Chandrasekaran, who turns 63 in June, has been chairman of Tata Sons since February 2017.
However, according to Moneycontrol, in the run-up to the 24th February board meeting, Noel Tata reached out to several trustees to explore whether they would reconsider their earlier unanimous decision backing Mr Chandrasekaran’s continuation.
Mint reported that the development reflects continuing tensions within Tata Trusts that are now casting a shadow over the Tata Sons board.
Noel Tata became chairman of Tata Trusts following the death of Ratan Tata. Since then, differences have reportedly surfaced within the trusts. Mint noted that the exit of Mehli Mistry as a trustee late last year and disagreements over board appointments have indicated internal divergence.
The report says Noel Tata’s son, Neville Tata, was inducted into the board of Sir Dorabji Tata Trust in November, but his induction into Sir Ratan Tata Trust has been delayed amid objections from some trustees, including Venu Srinivasan. Two SRTT board meetings were reportedly cancelled over the past three months due to lack of consensus.
On 28th July last year, the board of Sir Ratan Tata Trust passed a resolution urging the Tata Sons chairman 'to exercise best endeavours' to ensure that Tata Sons remains an unlisted private company and to fully engage with RBI on the matter, Mint reported.
The shareholding structure of Tata Sons gives Tata Trusts significant influence. As of 31 March 2025, Sir Dorabji Tata Trust held 27.98% and Sir Ratan Tata Trust 23.56%. The Shapoorji Pallonji group owns 18.38%, while Tata group companies and individual shareholders hold the remainder.
The Tata Sons board comprises Mr Chandrasekaran, Noel Tata, Venu Srinivasan, group chief financial officer (CFO) Saurabh Agrawal, and independent directors Harish Manwani and Anita Marangoly George, according to Mint.
Noel Tata’s objections mark a rare instance of open dissent since he joined the Tata Sons board as the representative of Tata Trusts in October 2024.
Despite the deferment, Mr Chandrasekaran continues as chairman until February 2027. There is no immediate change in leadership.
However, Tuesday’s developments bring internal differences within the Tata Trusts and Tata Sons into the public domain, signalling a phase of active debate over governance, capital allocation and strategic direction at India’s largest conglomerate.
The matter is expected to come up again at a future board meeting once alignment is achieved between Tata Sons and Tata Trusts, the reports indicated.
