Surprise is the common element in both the appointment and the abrupt removal of Cyrus Mistry, who was replaced as Tata Sons chairman by the Board on Monday.
On November 23, 2011, Mr. Mistry was selected as Ratan Tata’s successor and appointed Deputy Chairman, to be groomed by Mr. Tata for a year before the latter’s retirement in December 2012. He was picked after a 15-month search led by a team of Tata veterans. It was an unexpected development at the time as Mr. Mistry, then 43, was not even in the race. He was on the Board of Tata Sons since 2006 and was a member of the search and selection committee that was set up in 2010 to choose the new chairman.
Mr. Mistry is the younger son of Pallonji Mistry who, with his family, holds an 18.4 per cent stake in Tata Sons. Back then, Mr. Mistry was the unanimous choice.
The contenders for the post included Noel Tata, the half-brother of Ratan Tata; Indra Nooyi, Chairperson PepsiCo; Carlos Ghosn, Chairman & CEO Renault-Nissan; Arun Sarin, former CEO of Vodafone; and K.B. Dadiseth, the former chairman of HUL.
The search and selection committee that finally decided on Mr. Mistry included N.A. Soonawala and Shirin Bharucha representing Tata Trusts, which holds 66 per cent stake in Tata Sons; British businessman Lord Kumar Bhattacharyya; and R.K. Krishna Kumar representing Tata Sons.
Endorsing the appointment at the time, Mr. Ratan Tata, Chairman of Tata Sons said, “The appointment of Cyrus P. Mistry as Deputy Chairman of Tata Sons is a good and far-sighted choice.”
“I have been impressed with the quality and calibre of his participation [on the board], his astute observations and his humility,” Mr. Tata said. “He is intelligent and qualified to take on the responsibility being offered and I will be committed to working with him over the next year to give him the exposure, the involvement and the operating experience to equip him to undertake the full responsibility of the group on my retirement.”
On his appointment, Mr. Mistry had stated, “I am aware that an enormous responsibility, with a great legacy, has been entrusted to me. I look forward to Mr. Tata’s guidance in the year ahead in meeting the expectations of the group.”
Mr. Mistry was at that time the managing director of the Shapoorji Pallonji Group.
To ensure that there was no conflict of interest and the values and ethics of the Tata Group were protected, Mr. Mistry legally disassociated himself from the management of his family business (the Shapoorji Pallonji group). Mr. Tata retired on December 28, 2012 and Mr. Mistry took over as chairman that day.
Insider, outsider The appointment was considered unique as Mr. Mistry was only the second non-Tata to take over the chairman’s post. The first was Sir Nowroji Saklatwala who was chairman between 1932 and 1938. Mr. Mistry was the surprise choice at the time because the Tata Group, which had even considered several outsiders to head it, finally ended up choosing an insider.
Significantly, Mr. Tata was not in favour of Mr. Noel Tata, the chairman at Trent Ltd., as he felt his half-brother lacked the desired experience to lead the group.
Mr. Noel Tata is married to Cyrus Mistry’s sister Aloo (Mistry) Tata.
