Fallen Hero?

Boardroom Bickering Has Perhaps Come Back to Bite Ratan Tata and How.
 

- C.H. Unnikrishnan

RATAN TATA, CONSIDERED THE face of India Inc. as de facto head of the country’s largest business conglomerate, has de facto admitted over the last four months, that his well-thought-out decision of choosing Cyrus P. Mistry as his successor at Tata Sons was wrong. The unceremonious ouster of Mistry, Tata Sons serving chairman, on 24 October has led to a fierce boardroom battle and unprecedented war of words. It has now become obvious that things were not all that clean at the Tata Group, which, until a few months ago, was known for its good corporate governance.

In the whole drama, Ratan Tata has failed to explain what was wrong with Mistry. However, a reverse analysis of his over two decade-old reign at the country’s largest business group as chairman and chairman emeritus proves that he had taken several erroneous decisions in the past. It is the culmination of such errors that has led to the latest boardroom battle, denting the reputation of India’s 150 year-old corporate flag bearer.

In this context, one of the most relevant questions that any Indian would like to ask is; Is Ratan Tata still an icon in the Indian business spectrum?

Independent observations of the Tata-Mistry tussle, which led to a series of boardroom fights at several group companies, hostile share holder meetings, legal proceedings and finally the appointment of a “harmless” outside professional as the head of Tata Sons, indicate that the reputation of India’s most important business conglomerate and its 78-year-old patriarch have now been shredded.