Tata Trusts boards meeting today: Separate heads for Sir Dorabji Tata Trust, Sir Ratan Tata Trust high on agenda

The Tata Trusts own a majority stake in the $103 billion Tata conglomerate’s holding company Tata Sons. At present, both trusts are headed by one person—Ratan Tata.
Ratan Tata, chairman emeritus of Tata Group. (File photo)

Ratan Tata, chairman emeritus of Tata Group. (File photo)

New Delhi: The boards of the two Tata Trusts—Sir Dorabji Tata Trust (SDTT) and Sir Ratan Tata Trust (SRTT)—are slated to meet on Tuesday (August 16) to consider a resolution to separate two key positions to ensure the Tata Sons chairman won’t be able to take up a similar role at Tata Trusts. However, s/he can occupy the chairperson’s seat at either of the two flagship foundations after her/his retirement from the company.
Worth mentioning here is that the Tata Trusts own a majority stake in the $103 billion Tata conglomerate’s holding company Tata Sons. At present, both trusts, which have a combined shareholding of nearly 52 per cent in Tata Sons, are headed by one person—Ratan Tata, 84, chairman emeritus of Tata Group.
The two trusts were headed by different individuals. From 1995 onwards, both public charitable organisations have the same chairman in Ratan Tata. In 1998, when Ratan Tata took over from his father Naval Tata as the chairman of SRTT, JRD Tata was chairman of SDTT. JRD held that position till his death in 1993.
Earlier, when JRD Tata replaced Ardeshir Dalal as chairman of SDTT in 1949, Navajbai Tata, the wife of Tata Group founder Jamsetji Tata’s second son Sir Ratan Tata, was leading the other foundation. She held that position till the time of her passing in 1965. Incidentally, that was JRD’s first tenure as SDTT chairman since he again took the reins in 1969, according to a report in ToI.
Citing anonymous sources, the daily mentioned that the plan could change, as no final decision on having separate chairpersons for the two charitable organisations has been reached.
This signifies whoever takes it from Ratan Tata at SDTT and SRTT will be restricted from taking up the leadership role at Tata Sons. The octogenarian businessman was the last person to be chairman of Tata Sons and the Tata Trusts after JRD Tata. Current Tata Sons chairman N Chandrasekaran can become chairman of either of the two organisations only after he retires.
Some Tata Group observers believe the move is aimed at ensuring that power is not concentrated in a particular individual. Others are of the view that this may affect the decision-making process at the top.
At present, the idea behind the proposal is to increase corporate governance within the group by preventing the concentration of power.
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