India: Tata’s search for a new CEO
By Joe Leahy in Munbai
Mr Tata, Chairman of India’s biggest company, is expected to retire – yet again – in two years. But this time things look different. The group appears ready to move on, formally announcing last month that it has set up a special committee to look for a new CEO.
Instead of simply choosing the most obvious successor, the group has said it will consider all candidates for India’s biggest corporate job. In a country where companies are often controlled by influential families, the idea of an outsider, particularly a foreigner, controlling a group of Tata’s size and reputation is revolutionary.
At risk is more than the future of the Tata Group, though this is very important to the national economy. With its 100 subsidiaries – including India’s biggest information – technology outsourcing company and its biggest automotive producer – it is also the country’s first true multinational, with 65 per cent of its $71bn in revenue generated overseas.
Analysts question whether Tata can create an example for corporate India of orderly transition from family leadership to professional management. “There’s a feeling if an outsider, especially a foreigner, took over a group as complex as Tata, it would be disastrous,” says a banker who knows the company.
However, some critics argue that introducing professionals would help to break down a reputation for weak management in large, family – run companies.