The Imperfect Succession of N Chandrasekaran

The news that N Chandrasekaran, chairman of Tata Sons, will step down from his post at the end of February 2027, has sparked a predictable wave of commentary on the future leadership of the Indian conglomerate. While some may view this as a straightforward transition, the underlying dynamics are more complex and tellingly reflective of the tensions between different arms of the group.

Tata Sons, which controls over 30 companies including Tata Consultancy Services (TCS), Tata Motors, and Air India, has been under intense scrutiny in recent years. The conglomerate’s troubles include regulatory pressures on Air India following a fatal crash, pricing pressure at TCS, and a cyberattack on Jaguar Land Rover that weighed on Britain’s economic output. These challenges are not mere chance events but rather an inevitable consequence of Tata Sons’ aggressive expansion into new markets.

The succession process is complicated by the differing interests within the group. Noel Tata, chairman of Tata Trusts, which owns 66% stake in Tata Sons, has been at odds with Chandrasekaran over governance and strategic decisions. In February, a decision on extending Chandrasekaran’s tenure was postponed due to opposition from Noel Tata, who sought several conditions including a commitment that Tata Sons would never be listed.

This is not the first instance of internal disagreements between different arms of the group. The removal of Cyrus Mistry as chairman in 2016 following a fallout with Ratan Tata serves as a stark reminder of the power struggles within the conglomerate. Such disputes highlight the difficulty in achieving a seamless succession, particularly when key stakeholders hold divergent views on the future direction of the company.

Chandrasekaran’s decision to step down rather than seek reappointment underscores his willingness to prioritize the smooth transition of leadership over personal ambitions. This pragmatic choice may be seen as a necessary one given the ongoing power struggle within the group but also raises questions about Tata Sons’ capacity for change in its leadership.

The next few months will be crucial in determining whether the succession process can indeed ensure a seamless transition. The fact that six months have passed since the board meeting where the decision on extending Chandrasekaran’s tenure was deferred is a clear indication of the internal conflicts hindering progress. As Tata Sons navigates this challenging period, it is essential for the new leadership to address these underlying issues and establish a clear vision for the conglomerate’s future.

The departure of Chandrasekaran marks not just the end of an era but also an opportunity for Tata Sons to redefine its governance structure and strategic priorities. The outcome will have significant implications not only for the company itself but also for India’s corporate landscape as a whole.