Noel Tata Can't Chair Both Tata Sons And Tata Trusts (Image:

Noel Tata, the newly appointed chairman of Tata Sons cannot concurrently lead Tata Trusts due to governance concerns sparked by Cyrus Mistry’s 2017 removal from Tata Sons’ board as per the reports on Thursday. This led to questions about the relationship between Tata Sons and its key shareholders such as Sir Dorabji Tata Trust and Sir Ratan Tata Trust.

In 2022, late Ratan Tata, then Tata Trust’s chairman established a governance framework separating Tata Sons’ ownership and operations. He amended Article 118 which ensured that the chairman of Tata Sons would be appointed by a selection committee comprising three members nominated by both trusts. This committee includes one board member and one independent member chosen by the board.

The amendment mandates that the chairman of either trust cannot simultaneously hold the chairman position at Tata Sons. This ensures a clear division between ownership and operations addressing concerns about governance and potential conflicts of interest. Currently, Vijay Singh and Venu Srinivasan serve as directors on Tata Sons’ board and represent Tata Trusts’ executive committee.

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Following Ratan Tata’s passing on October 9, Noel Tata took over as Tata Sons chairman but due to this governance framework, he didn’t process his chairmanship yet. However, the governing body is still to confirm decisions on the matter and Noel Tata is set to seek legal advice from the experts to clarify his current role at the Tata entities, as per the Times of India report. However, according to the report legal experts do not see any barriers pulling him back to hold these positions in non-executive capacities.

Since the demise of Ratan Tata, the line of succession has been unclear and many assumed Noel would automatically take over the position. Ratan Tata also did not leave clear instructions on who should inherit his designations and didn’t mention it anywhere. As per the reports, Ratan Tata also did not personally own shares in Tata Sons to pass on to an heir. It was said that the day-to-day operations of the business are currently managed by Tata Sons chairperson Natarajan Chandrasekaran.

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