After N Chandrasekaran, who gets the top Tata job? Here’s how the decision will be made

The process to find N Chandrasekaran’s successor at Tata Sons has begun, a day after the company’s chairman announced that he would not seek a third term.

The Sir Dorabji Tata Trust (SDTT), one of the key charitable trusts within the Tata Trusts, said on Thursday that its trustees had decided to initiate the process of setting up a selection committee to recommend the next chairman of the Tata Sons board.

The charitable trusts together hold nearly two-thirds of Tata Sons, giving them a central role in the succession process.

What is the selection process?

Chandrasekaran has headed Tata Sons since 2017. He announced on Wednesday that he would not offer himself for reappointment for another term, amid a reported lack of unanimity on his continuation within the Tata Sons board.

Under Article 118 of the Articles of Association of Tata Sons, a selection committee is required to be formed to recommend a candidate for chairman as long as the Tata charitable trusts retain the required stake in the holding company.

The committee will identify a suitable candidate and recommend the name for appointment. The final decision will be taken according to Tata Sons' governance framework.

The Sir Dorabji Tata Trust said it would initiate the process as soon as possible “in accordance with the Articles of Association of Tata Sons, for the purpose of recommending a person for appointment as the new Chairman of the Board of Directors.

What happened after Cyrus Mistry’s exit?

Tata Sons had followed a similar selection exercise after Cyrus Mistry was removed as chairman in October 2016.

A five-member panel was formed to find his successor. It included Ratan Tata, Venu Srinivasan, Amit Chandra, former diplomat Ronen Sen and Lord Kumar Bhattacharyya.

The panel eventually unanimously selected Natarajan Chandrasekaran, then CEO and managing director of Tata Consultancy Services, as Tata Sons chairman.

What role will Noel Tata have?

Noel Tata, who became chairman of the Tata Trusts after the death of his half-brother Ratan Tata, also heads the Sir Dorabji Tata Trust.

With the trust playing a key role in initiating the selection committee, Noel Tata will be part of the broader process that begins the search for Chandrasekaran’s successor. The next chairman will ultimately be chosen through the established governance structure of Tata Sons.