| Tata: Poised for a longer innings
Mumbai, June 27: Ratan Tata will stay on as chairman of the Rs 75,000-crore Tata group till 2012.
Tata, 68, virtually capped feverish speculation about his successor by again tweaking the group’s retirement rules to raise the retirement age for non-executive directors from 70 to 75.
The decision to revise the retirement age for non-executive directors, including chairman, was taken by the nine-member board of directors of Tata Sons. The revised guidelines will be circulated to the boards of other Tata companies, which are expected to adopt them.
The retirement rules were first framed in 1991 and were used to force satraps like Russi Mody and Darbari Seth out of the Tata group in what was then a celebrated battle between JRD Tata’s anointed successor and the stalwarts who ran their companies ' Tata Steel and Tata Chemicals ' like their own fiefs.
At that time, the retirement age for executive positions had been set at 65 and that for non-executive positions at 75.
But in 2000, Tata had slashed the retirement age for non-executive positions to 70 while retaining the 65-year limit for executive positions.
Tata, who is the non-executive chairman of group holding company Tata Sons, gave up his executive powers in 2002 when he turned 65.
The immediate beneficiaries of the latest revision are Noshir Soonavala, vice-chairman of Tata Sons, a legal eagle and confidant of Ratan Tata, and Shyamal Gupta, a Tata Sons board member. Both will turn 70 this year.
Others on the Tata Sons board who will also benefit include J.J. Irani, 69, the former managing director of Tata Steel, and R.K. Krishna Kumar, 67, the vice-chairman of Tata Tea and Indian Hotels. Pallonji Mistry, the single largest shareholder of Tata Sons with an 18 per cent stake, retired from the board this year.
Mistry, 76, had stayed on beyond the old retirement age of 70 because he had been granted a five-year tenure before the retirement rules were changed in 2000. Mistry is the father-in-law of Noel Tata, the half-brother of Ratan Tata.
Tata sources say the move to revise the retirement age came from two independent directors of Tata Tea ' Y.H. Malegam, 72, and D.N. Ghosh, 73.
“These revisions are according to the policy last adopted in 2000 and reflect the views of independent directors on the boards of major Tata companies and take account of recent developments in the regulatory environment relating to good corporate governance,” said a statement by the Tata group.
The decision to raise the retirement age for non-executive directors will allow “the company to continue to benefit from the rich experience of these directors, who add great value to the strategy and direction of Tata group companies,” the statement added.
The Tata Sons board also decided to establish nomination committees to select new directors based on criteria that were not spelt out. It also decided to specify the tenure for independent directors.