The Tata group is undertaking a series of steps aimed at keeping CEOs of group companies in check, while broadbasing decision-making at the top levels in companies. Among the steps being taken in this direction are ensuring greater involvement of the powerful Group Executive Office (GEO) in decision-making at companies and also empowering the second rung of leadership in group outfits.According to a senior Tata group official, the GEO is now actively participating in the recruitment of group companies’ second rung — including vice presidents, deputy managing directors, chief financial officers and others in the second rung of the management team.The group is undertaking an extensive overhaul to increase the powers vested in the second chain of command to ensure a smooth flow of information within its group companies. ‘‘We saw that there was a definite need to spread the command of power, to ensure that there was a back-up system to check the powers of CEOs and also to ensure that in case of need, a smooth transition of power could take place,’’ a senior Tata group official said.‘‘In a group as large as ours, there is a combination of trigger-happy CEOs and those who know the value of their second rung. We have initiated this exercise to strengthen the second rung. The GEO will play an active role in interviewing candidates suggested for the second-in-command at group companies. This is to ensure that the second rungs are not filled in by managers recommended by the respective CEOs,’’ the official added.A prime example of the strengthened second rung is the transition of power at Tata Power Company (TPC). With the retirement of TPC’s former managing director Adi J Engineer, the company made a smooth transition to its current managing director F. Vandrevala.
