Bombay House, the iconic headquarters of the Tata group is gearing up to welcome a new leader who would guide its destiny for the next few decades, the same way current chairman
Ratan Tata catapulted it to become a $67.4-billion
multinational powerhouse in 2009-10 from $3 billion in 1992.
Tata Sons, the holding firm of the group and the apex decision making body, has
initiated steps for this changeover as Ratan Tata is scheduled to retire in December 2012.
Though the process of choosing the new leader is yet incomplete, major changes have been effected to enable the younger lot at
Bombay House to take charge and spearhead growth.
An attempt is also being made to decentralise the power centre so as to ease the burden on the new leader and spare him from the day-to-day running of prominent group companies.
In an unexpected move, Tata Sons last week reduced the retirement age of non-executive directors from 75 years to 70 years, thus cutting short the work life of half a dozen Tata Group veterans who will now make space for comparatively younger corporate bureaucrats in the group's boardrooms.
These include Tata Motors' Ravi Kant (67), Tata Steel's B. Muthuraman (66), TCS' S. Ramadorai (66) and Tata Son's R. Gopalakrishnan (65), Arunkumar Gandhi (68) and Farrokh K. Kavarana (67).
This has been done following the recommendation of a search panel that was set up in August last year to select Ratan Tata's successor from among international, domestic and in-house candidates.
The five-member panel comprises R. Krishna Kumar, Cyrus Mistri (both directors of Tata Sons), N. A. Soonawala (former chairman of Tata Sons), Shirin Bharucha (a lawyer) and Kumar Bhattacharya (renowned management expert).
Despite serious attempts, this panel could not name the new candidate by March and has now postponed the deadline to May-end. However, the panel thought it appropriate to make some other changes in the running of the group and suggested it to the Tata Sons' board, which accepted this proposal.
"The Selection Committee for appointing the Chairman of Tata Sons has also considered the appropriate board structure, including the question of the retirement age for directors. It suggested the retirement age for non-executive directors be brought down from the present limit of 75 years to 70 years," a Tata Sons spokesperson said.
This means that Krishna Kumar (73), the vice-chairman of Indian Hotels and a close friend of Ratan Tata will continue. So also J. J. Irani (74) the erstwhile head of Tata Steel.
According to indications, a younger person would take charge at Bombay House and in all probability he would be from inside the group. This was indicated by R. Gopalakrishnan in Mumbai last week.
"The next leadership is not for five years. But he will be there for 30 to 40 years. The group does not want a person who comes in for just five years, takes stock options and departs to the Bahamas," Gopalakrishnan reportedly stated.
There has been constant flipflop in the Tata group's retirement policy. For the first time, an attempt has been made to make a non-Tata or Parsee the group chairman. The Tatas insist that market dynamism and ground realities have changed and the new leader needs to be competent to take on the new challenges.
They say that since over 60 per cent turnover of the group comes from outside India, the new leader must have hands-on overseas experience.
It was in 1992 that Ratan Tata first brought out a retirement policy to force Tata Group satraps Russi Mody, Ajit Kerkar and Darbari Seth to go. In 2002, the group lowered the age of executive directors to 70 from 75 while keeping the retirement age of executive directors at 65.
But again in 2005 it raised the retirement age limit of nonexecutive directors to 75.
Courtesy: Mail Today 
Tata Sons chairman Ratan Tata is due to retire in December 2012 
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