New Delhi: A change can be seen soon in Tata Sons, a Tata group company. Actually, these changes are expected to happen in the leadership structure. Tata Sons, which owns the $106 billion salt-to-software conglomerate, is planning to create a chief executive officer (CEO) position to improve corporate governance.
According to Bloomberg, citing unnamed sources, the CEO will head the wider business of the 153-year-old Tata empire, according to the proposal. While the chairman will supervise the CEO on behalf of the shareholders.
Approval not yet received from Ratan Tata
From a functional or compliance standpoint, Tata Sons does not need a CEO. In the traditional sense, it cannot be considered at all. As the holding company of India’s largest corporate group, it has no direct operations under it and is an unlisted company. However, according to Bombay House sources, Ratan Tata, the chairman of Tata Trusts, which is the owner of Tata Sons, who can be considered important for this change, has not yet formally approved the plan.
Let us tell you, Tata Sons held its 103rd Annual General Meeting (AGM) virtually on the previous day. The company’s chairman Natarajan Chandrasekaran is being considered for extension after the end of his term in February 2022.
At the same time, leaders of various Tata group companies, especially Tata Steel Limited, are being considered for the role of CEO.
A new group CEO will face many challenges. Tata Steel is grappling with a net debt load of $10 billion while Tata Motors, which owns British marque Jaguar Land Rover, has been continuously making losses for the last three years till March 2021.
Tata Sons reported a net profit of Rs 19,397 crore in 2019-20, up from Rs 10,916 crore in the year-ago period.
Meanwhile, its standalone profit for the financial year 2021 rose to Rs 6511.63 crore, from Rs 24,770.46 crore in the year-ago period to Rs 9460.24 crore, despite a 60% decline in revenue from operations.