India
How Tata dethroned the old guard to gain control and reshape the group | India News – Times of India
When he took over as chairman in 1991 at the age of 54, he faced a huge challenge from the old guard. Senior leaders like Russi Mody, Ajit Kerkar and Darbari Seth had flourished under JRD Tata’s vision, wielding power and running their respective companies almost like personal fiefdoms, often at odds with the group’s collective vision. With his authority challenged, Tata introduced a series of bold reforms, starting with a retirement age policy aimed at transitioning these entrenched leaders.
Tata implemented one pension policy In 1992 it was determined that directors had to resign at the age of 75. This change had immediate consequences; Mody, who had devoted 53 years to Tata Steel, was forced to retire in 1993. In a last-ditch effort to retain influence, Mody promoted his adopted son, Aditya Kashyap, to deputy MD without the approval of the Tata Steel board a year before his retirement. Tata disapproved of this unilateral decision, forcing Mody to withdraw the promotion. Kashyap got out next to Mody. Next was Seth. In 1994, he retired from his positions at Tata Chemicals and Tata Consumer Products. Before his departure, he managed to appoint his son, Manu Seth, as MD of Tata Chemicals. However, Manu’s tenure was also short-lived; he resigned in 2000 due to “differences in professional perception”.
Kerkar, who was chairman and director of Indian Hotels (Taj), opposed Tata’s management style. Since there were still several years to go before he retired, the new policy did little to calm him down. However, in September 1997, he was forced to resign after Tata Group accused him of violating currency laws.
The pension policy was not just a one-time adjustment; it was part of a series of strategic changes that would take place over the years, each of which strengthened Tata’s authority over the vast Tata empire.
Eight years after introducing the pension policy, the group further raised the retirement age for non-executive directors to 70 years in 2000. Ironically, this age was raised to 75 years in 2005, allowing Tata to extend his chairmanship until 2012. Just a year previously After his retirement, the age was reset to 70, raising questions about the motives behind these shifts in policy.
In a dramatic twist, the pension policy resurfaced in 2016 when Tata Sons abolished the age limit for candidate nominees. Tata truststhe company’s largest shareholder. This strategic move allowed Tata, who was chairman of Tata Trusts, to step back into a leadership role as interim chairman of Tata Sons and remove Cyrus Mistry from his position.
