The Tata Group squabble suggests a leadership vacuum

The Tata Group is no stranger to trouble.

- RAJRISHI SINGHAL

The 157-year-old industrial group has weathered multiple storms—both external and internal—in the past. A new in-house leadership crisis and shareholding dilemma is now rocking its boardrooms and will severely test its resilience. On trial is also the group’s famed governance model, which has acquired some dents over the past two decades or so. One thing is inescapable: this is a full-blown leadership crisis and resolving it will be key to assuring the group a durable and stable future.

Internal dissension and public sparring among trustees of Tata Trusts, which collectively hold over 65% in the group's holding company, Tata Sons, has exposed the edifice’s structural faults. These trustees are responsible for, among other things, nominating directors to the holding company and providing broad corporate direction. These trusts, in turn, depend on dividend payouts from Tata Sons to finance their charitable activities. Tata Sons, for example, paid over ₹1,712 crore to the seven trusts for 2024-25. Trustees on the board of Tata Sons are expected to keep other trustees updated about key governance decisions; this is where, ironically, trust has broken down.