'A passionate long-distance runner who has completed several marathons' as his profile describes him in the Tata Consultancy Services portal, the IT giant's chief executive officer and managing director N Chandrasekaran will soon begin another run. This time as chairman, Tata Sons, stepping into the shoes of interim chairman Ratan Tata after Cyrus Mistry was shown the door.
Announcing the appointment, a statement from Tata Sons said, "The Board of Directors of Tata Sons, at its meeting today, appointed Mr. N. Chandrasekaran as Executive Chairman. This is as per the unanimous recommendation of the Selection Committee. Mr. Chandrasekaran shall take charge from February 21, 2017."
The statement further said, "We believe he will now inspire the entire Tata group to realise its potential acting as leaders in their respective businesses, always in keeping with our value system and ethics and adhering with the practices of the Tata group which have stood it in good stead."
Reacting to his appointment, Chandrasekaran said, "I am humbled and honoured to be chosen to lead a truly great institution that occupies a unique position in the hearts of people in India and the world. I am proud to have been part of the Tata family for over 30 years and assuming this position is a great privilege. I want to thank the Tata Sons Board and Mr. Ratan N. Tata for their confidence in me to lead this trusted institution that has a rich heritage. At the Tata group, we are at an inflection point. I am aware that this role comes with huge responsibilities. It will be my endeavour to help progress the group with the ethos, ethics and values that the Tata group has been built on."
Chandrasekaran takes over at a time when an ugly legal feud is still on between Tata and Mistry as the ousted chairman dragged the salt-to-software conglomerate to the National Company Law Tribunal seeking relief. Mistry was sacked as chairman of Tata Group on 24 October after he showed "little or no signs of improvement" in his leadership.
Touted as a Tata insider, the manner in which TCS took quantum leaps to position itself as the country's foremost IT firm, always worked in his favour. A close confidante of Ratan Tata, Chandrasekaran was one of the two key officials to be appointed as an additional director on the Tata Sons board; the other being Ralf Speth, CEO of Jaguar Land Rover.
Chandra also has a huge risk-taking appetite, which can be seen by his decision to set up BPO operations in Saudi Arabia to service energy clients such as Saudi Aramco and General Electric. Faced with huge competition, Chandra came out with a solution to set up an all-women centre, a unique proposition in a conservative Islamic land.
"Under his leadership, TCS has generated consolidated revenues of US $16.5 billion in 2015-16. With over 371,000 consultants, TCS has become the largest private sector employers in India with the highest retention rate in a globally competitive industry. TCS remains the most valuable company in India ended 2015-16 with a market capitalisation of over US $70 billion," his brief on the TCS website said.
According to a The Hindu BusinessLine report, Chandrasekaran always had the edge when compared to the other competitors for the post including Hindustan Lever non-executive chairman Harish Manwani, Trent chairman Noel Tata and British businessman Sir George Buckley.
Chandrasekaran was selected by a five-member panel with Ratan Tata as one of the selectors. It has been widely reported that with the Mistry episode not going down too well among the top echelons of the Tata group.
The elevation for the TCS boss could not have come at a better time as the IT firm recorded a robust growth reported 10.9 percent jump in profit to Rs 6,778 crore for the third quarter of the current fiscal. It had reported net profit of Rs 6,110 crore in the October-December period of last fiscal while the operating profit was at Rs 7,733 crore in the reported quarter.
With a massive 30 years of experience in the Tata IT arm, Chandra as he is popularly known, would hand over the charge of the TCS to Rajesh Gopinathan. NG Subramaniam, who is incidentally the elder brother of Chandrasekaran, would be the new chief operating officer of the Tata IT arm. Subramaniam is currently president, TCS Financial Solutions.
On being promoted as the head of TCS, Gopinathan said, "I would like to thank the TCS Board and Chandra for the privilege and honor to lead this great organization. TCS has evolved into an industry leader during Chandra’s tenure. It is definitely big shoes to fill. With continuous guidance from Chandra and the support of the TCS team, I am confident of continuing this great journey that TCS is on."
Gopinathan started his professional career with TCS in 2001 and was appointed as chief financial officer of the company in February 2013.
Looking forward to his new role, Subramaniam said, "I sincerely thank the TCS Board for this honor. Chandra has provided a great platform through his visionary leadership. I look forward to working with Rajesh and the rest of my colleagues and contribute to TCS’ future growth."
Although the top chair at the Bombay House, the iconic headquarters of Tata Sons would in all probability see some calm, the Tata-Mistry war is far from over. The company, in fact, informed the NCLT that Mistry refused a peaceful exit when an opportunity was provided to him.
"Before the commencement of the board meeting of Tata Sons on 24 October, 2016, Ratan N Tata and (director) Nitin Nohria personally spoke to Cyrus Mistry and offered Cyrus Mistry an opportunity to resign voluntarily as Executive Chairman. However, Cyrus Mistry refused to do so," Tata Sons said in 204-page affidavit submitted to the NCLT.
Updated Date: Jan 12, 2017 20:25 PM