MUMBAI: In a move that is being read as a sign that N Chandrasekaran of Tata Consultancy Services (TCS) and Ralf Speth of Jaguar Land Rover (JLR) could be strong contenders for the position of chairman of Tata Sons , the two were elevated to board positions at the group’s holding company.
Chandrasekaran, 53, popularly called ‘Chandra’, is the MD & CEO of TCS, the largest private sector company in India by market value, while the 61-year-old German is CEO of JLR, one of the most recognised automobile companies globally.
With these appointments, the Tata Sons board now has 11 members. In a statement,Ratan Tata, the interim chairman of Tata Sons , said the elevation of the two executives was “in recognition of their exemplary leadership”. Both TCS and JLR, under the watch of Chandra and Speth, have grown from strength to strength, generating huge revenues and profits for the $100-billion plus conglomerate. Indeed, TCS and JLR have been among the few bright spots across the sprawling conglomerate and have been hugely instrumental in keeping its profits afloat.
The appointments of Chandra and Speth also indicate Ratan Tata’s preference to have Tata executives on the board of Tata Sons as against Mistry’s who had brought on board several external faces like Nitin Nohria, dean of Harvard Business School, and Farida Khambata, strategist at emerging markets-focused firm Cartica Capital. Only Ishaat Hussain was an old Tata hand within Mistry’s 9-mem ber board. The Tatas acquired JLR in 2008 at the height of the global financial crisis for $2.3 billion from global automobile giant Ford. The acquisition of the iconic brands served to catapult the Tata brand globally. TCS, the group’s software division, on the other hand, was hived off from Tata Sons in 2004 and listed. Under Speth’s leadership starting February 2010, JLR’s revenues soared more than three times to 22.2 billion pounds in fiscal 2016 from 6.5 billion pounds in fiscal 2010, while net profit surged to 1.3 billion pounds from 23 million pounds. Speth, a BMW and Ford veteran, is the highest paid Tata Group CEO with an annual package of 4.7 million pounds.
Under Chandra’s leadership, TCS’s net sales too jumped more than three times to Rs1.09 lakh crore by fiscal 2016 from Rs 30,029 crore in fiscal 2010.Chandra was elevated as TCS MD in October 2009. At 46, he was one of the youngest Tata Group CEOs. During his tenure the software major’s profit also jumped more than three times to Rs 24,375 crore from Rs 7,093 crore. Tata Sons has now launched a five-member selection committee, which includes Ratan Tata, to find a successor who could be from within or outside. Chandra and Speth’s elevation is seen as a possible signal that an in-house candidate might have a better shot at the top job. These two could also possibly be part of the new think-tank that Ratan Tata is expected to form after dismantling Mistry’s Group Executive Council.
Bureau Report
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