Search on Tata successor - Atasi Das

India’s biggest business conglomerate, the Tata Group, founded in 1868 by Jamsetji Nusserwanji Tata has launched a global hunt for a successor to its current septuagenarian chairman, Ratan Naval Tata.

The five member selection committee formed for the purpose comprises NA Soonawala, former Vice Chairman of Tata Sons; Cyrus Mistry and RK Krishnakumar, Senior Group Directors; Shirin Bharucha, Lawyer and Lord Kumar Bhattacharya, a British businessman. Names like Arun Sarin, the former Vodafone chief and Indra Nooyi, the current Pepsi CEO have been doing the rounds for the post of the likely successor. Speculations have also been rife about Ratan Tata’s half-brother Noel, who has recently been awarded the post of vice-chairman in ‘Trent’; Noel Tata is the son-in-law of Pallonji Mistry, the biggest shareholder in Tata Sons (with an 18 per cent stake), the holding company of the Tata group.

Ratan Tata has termed the media speculation surrounding the search for his successor as ‘unnecessary’, adding that, the formation of the selection committee had been decided a decade ago and some of the selection parameters were already fixed by him. He also observed that ‘anti-Parsi or ‘pro-Parsi’ would not be an issue, while choosing his successor; it will be someone who will be capable of leading the group to the ‘levels that have been set’. No timeframe has yet been set for the selection; however the process is expected to be wound up by March 2011. Ratan Tata had earlier observed that his successor would need ‘up to 18 months of handover time’. He also clarified that the hunt for his successor will be ‘both within the organisation and outside’ it, with preference being given to Indian nationals.

Ratan Tata has been instrumental in formulating the retirement policies of his group. Till his showdown with erstwhile front ranking Tata executives like Russi Mody and Ajit Kerkar, the group did not possess any designated retirement age for its top office bearers. Setting up the search committee was a step towards the realisation of Ratan Tata’s vision of transforming the Tata Group into an institutionalised enterprise from a patriarchal organisation.

Though Ratan Tata will relinquish his position as the Tata Group Chairman by December 2012, he is likely to remain the chairperson of Sir Dorabji Tata Trust and Sir Ratan Tata Trust, the two charitable trusts, which own major stakes in Tata Sons, like his predecessor JRD Tata.

The Tata Group owns 28 publicly listed companies, with a combined market capitalisation of around $ 60 billion. Gross revenue of the companies was $ 70.8 billion (around Rs 3,25,334 crore) in 2008-09, with 64.8 per cent of it coming from offshore businesses - the group had a 3,63,039 strong work-force in 2008-09; shareholder base comprised 3.5 million people. Tata business ventures are mostly India based businesses, with significant international operations; the business interests of the group span the arenas of communications and information technology, engineering, materials, services, energy, consumer products and chemicals. Two-thirds of the Tata Sons equity is held by philanthropic trusts, which are actively engaged in promoting social welfare.

This 140-year old salt-to-steel-to-software conglomerate has all along been run by a Parsi barring the tenure of Chairman Nowroji Saklatvala in 1932. Ratan Naval Tata took over as the fifth Tata group chairman in 1991 from JRD Tata - the group’s revenues were then Rs 8,553 crore; under his leadership the revenue leaped to Rs 3.46 lakh crore in 2008-09. Apart from Tata Sons, Ratan Tata is also the Chairperson of Tata enterprises like Tata Steel, Tata Motors, Tata Power, Tata Consultancy Services, Tata Tea, Tata Chemicals, Indian Hotels and Tata Teleservices.

Born on December 28, 1937 in Bombay, Ratan Tata has epitomised the values of ethics, integrity, social consciousness and fairness throughout his corporate career and has been awarded with the Padma Vibhushan, India’s second-highest civilian award, in 2008.

Under his regime India's first software services company, Tata Consultancy Services, incorporated in 1968, became a publicly listed company and Tata Motors was listed at the New York Stock Exchange. In 1998, Tata Indica, India’s first indigenously designed and manufactured car was launched. Ratan Naval Tata has also had a spectacular business run in the overseas market: his overseas acquisitions include Anglo-Dutch steelmaker Corus for $ 13 billion in 2007 and Jaguar-Land Rover for $ 2.3 billion in 2008. He is credited with building Nano, the cheapest car in the world and the Eka supercomputer.

The vision of the man called Ratan Naval Tata can be best summed up in his own words that, in a hundred years from now he envisages a much bigger and better Tata Group in terms of operational efficiency, products, and ethics and value systems - in short, the group is searching for a leader, who can effectively leverage his experience and expertise to successfully carry forward the company, amidst the complex global economic challenges.