TCS CEO N Chandrasekaran named new Tata Sons chairman
Natarajan Chandrasekaran, the CEO and Managing Director of Tata Consultancy Services (TCS), was on Thursday named the chairman of Tata Sons, two months after the promoter of India’s biggest conglomerate removed Cyrus Mistry from the post.
The decision was taken at an unscheduled board meeting today. Chandrasekaran will be the first non-Parsi to head the $103-billion global empire with a 148-year history and will take charge of the company on February 21.
Rajesh Gopinathan has been appointed as new CEO of TCS in place of Chandrasekaran.
"Chandrasekaran has demonstrated exemplary leadership as the Chief Executive Officer and Managing Director of Tata Consultancy Services," said a statement from Tata Sons, adding that he will take over the holding company's reins on February 21.
"We believe he will now inspire the entire Tata group to realise its potential acting as leaders in their respective businesses, always in keeping with our value system and ethics and adhering with the practices of the Tata group which have stood it in good stead," the statement added.
A five-member selection panel was formed in last October to shortlist the candidates for the post of Tata Sons chairman. Besides Ratan Tata, the panel includes TVS Chairman Venu Srinivasan, Bain Capital’s Amit Chandra, former diplomat Ronen Sen and Kumar Bhattacharyya of Warwick University.
The search panel was given four months to find the new head of the promoter company of the major operating firms of the USD 103 billion salt-to-software conglomerate, but the decision has been reached even before that.
Names of Ratan’s half-brother Noel Tata, former group CFO and current TCS chairman Ishaat Hussain and Jaguar Land Rover (JLR) CEO Ralf Speth and were also doing the rounds as possible contenders for the top post of $103 billion conglomerate.
Popularly known as 'Chandra', the 54-year-old was chosen to step into the shoes of interim Chairman Ratan Tata, who took over on October 24 last year after the removal of Mistry. He is one of the youngest CEOs of the Tata Group.
Considered an "insider", Chandrasekaran had already been inducted into the board of Tata Sons in October last year as additional director, a day after Mistry was sacked as chairman.
Chandrasekaran has been heading the Tata group's 'crown jewel', software firm TCS, since 2009. He was appointed as a Director on the board of Tata Sons on October 25, 2016, a day after Mistry's removal. He is credited with a complete overhaul of TCS, largest private sector employer in country.
He joined TCS in 1987 after completing Masters in Computer Applications from Regional Engineering College, Trichy (now NIT Tiruchirappalli). He has a Bachelor of Science in Applied Science from the Coimbatore Institute of Technology.
Under his leadership, TCS generated consolidated revenues of USD 16.5 billion in 2015-16. The company remains the most valuable company in India as of 2015-16 with a market capitalisation of over USD 70 billion.
An avid photographer, he is also a passionate long-distance runner and completed several marathons around the world, including Amsterdam, Boston, Chicago, Berlin, Mumbai, New York, Prague, Stockholm, Salzburg and Tokyo.
Just a few hours before the announcement, the group veteran had reported a better-than-expected third quarter results for Tata Consultancy Services, one of the highest revenue earners for the group. TCS reported a 10.9 per cent jump in net profit at R 6,778 crore in third quarter of fiscal year 2016-17.
Chandrasekaran's appointment as Tata Sons Chairman comes at a time when the company is fighting a legal battle at the National Company Law Tribunal with Mistry, who has challenged his ouster.
Yesterday, Mistry family-owned two investment firms had filed a contempt application at NCLT against move by Tata Sons to remove him as director and sought an order to restrain the company from going ahead with its planned EGM on February 6 called to remove him.
In one of the biggest board room battles in history of India Inc, Tata Sons board had removed Mistry as Chairman citing loss of faith in his leadership and for the good of the future of the group, while his predecessor Ratan Tata was brought back as an interim Chairman.
Mistry, on the other hand, had alleged that Tata and other trustees of the Tata Trusts ran alternate power centre and he was reduced to a "lame duck Chairman".
"Chandra is a great choice," said N.R. Narayan Murthy, the Infosys co-counder. "He is all the time learning with people, he is all the time sharing with people. I have no doubt the entire industry will be celebrating today," Murthy added.
"Excellent choice. He dserves it. I've known him for several years and he is level headed, dynamic and young," said banker Deepak Parekh, who has been on the board of Tata Group company Indian Hotels.
He said the challenges before Chandrasekaran will be the UK operations ot Tata Steel, and Tata Telecom.
Tata group at an inflection point: N Chandrasekaran
Stating that the Tata group is at an inflection point, newly-appointed Tata Sons Chairman N Chandrasekaran today said his aim would be to help progress the conglomerate "with the ethos, ethics and values that the Tata group has been built on".
Commenting on his appointment as the head of the USD 103 billion salt-to-software behemoth, Chandrasekaran said: "At the Tata group, we are at an inflection point. I am aware that this role comes with huge responsibilities.
"It will be my endeavour to help progress the group with the ethos, ethics and values that the Tata group has been built on."
He further said he is "humbled and honoured to be chosen to lead a truly great institution that occupies a unique position in the hearts of people in India and the world".
"I am proud to have been part of the Tata family for over 30 years and assuming this position is a great privilege," he added.
He also thanked the Tata Sons Board and Ratan Tata "for their confidence in me to lead this trusted institution that has a rich heritage".