Chandrasekaran gets third term as Tata Sons chairman, Noel Tata objects

The Tata Sons board has reappointed N. Chandrasekaran as executive chairman for another five years, giving him a third term. The decision was taken by majority vote at a board meeting held on September 17 at Bombay House in Mumbai. Tata Trusts chairman Noel Tata has objected to the decision.

This will be Chandrasekaran's third term. He first took over as Tata Sons chairman in 2017 and was reappointed for a second five-year term in 2022. His current term was due to end in February 2027.

In August 2026, Chandrasekaran had told the board that he did not wish to continue as chairman once his current term ended, which was expected to trigger a process to find his successor at Tata Sons. However, on September 3, the company's Nomination and Remuneration Committee asked him to reconsider his decision and recommended reappointing him for another five years. Chandrasekaran agreed to reconsider, and the board approved his reappointment.

The decision has sharpened the differences between Tata Trusts and Tata Sons. Noel Tata voted against the reappointment proposal. Tata Trusts said in a statement that the legal validity of the decision is in question under the company's Articles of Association, adding that the chairman's appointment requires approval by a majority of the directors it nominates.

Tata Trusts also said that Chandrasekaran's decision on August 12 not to make himself available for reappointment had been treated as final, after which it had been advised that the process to select a successor be initiated. It remains to be seen whether the reappointment leads to any further legal or administrative dispute between the Tata Sons board and Tata Trusts.

The issue of Tata Sons' possible IPO is also under discussion alongside Chandrasekaran's reappointment. The RBI had placed Tata Sons in the "Upper Layer" NBFC category in 2022. This regulatory framework had raised questions over the company's listing. Tata Sons had sought to have its NBFC registration certificate cancelled to exit this framework, but the RBI rejected the request.

Following this, the Tata Sons board has decided to proceed with complying with the applicable RBI norms, which could eventually open the way for the company's listing.

Tata Trusts holds about 66 percent stake in Tata Sons, which makes the divide between the board's decision and the role of the largest shareholder significant. The role of shareholders could prove decisive on both the reappointment and the possible listing going forward. Overall, the industry is watching closely both the board's decision on Chandrasekaran's next five-year term and the steps taken on Tata Sons' governance and its possible IPO.