There’s unlikely to be any change in the position of Ratan Tata, the supremo of Rs 75,000-crore Tata group. In a surprise move, the board of Tata Sons, the holding company of Tata group of companies, has decided to extend the tenure of its non-executive directors. This enables chairman Ratan Tata to continue up to 2012, when he turns 75.The new policy is a reversal of Tata’s previous retirement policy in the mid 1990s, which he used to topple the satraps including Tata Steel’s Russi Mody and Ajit B. Kerkar from Indian Hotels. Darbari Seth had to leave once he turned 70.Tata Sons said it has adopted revised guidelines for the composition of the board of directors. The statement did not give out the date of the board meeting. ‘‘The retirement age for non-executive directors has been reverted to 75 years, thus allowing the company to continue to benefit from the rich experience of these directors, who add great value to the strategy and direction of Tata Group companies,’’ says the Tata Sons statement.The retirement age was fixed at 70 nearly 10 years ago when Ratan Tata took control of the group.Tata, 68, had earlier given up the day-to-day management while remaining the Chairman of all major group companies. Under Ratan Tata’s previous policy, he would have been forced to retire by 2007. There has been considerable speculation about his successor with many names including Noel Tata (Ratan Tata’s step-brother) doing the rounds.The revised guidelines are being circulated to the boards of Tata companies for their consideration. ‘‘These revisions are to the policy last adopted in 2000 and reflect the views of independent directors on the boards of major Tata companies and take account of recent developments in the regulatory environment relating to good corporate governance,’’ the statement added.The other revisions include creation of nomination committees for the selection of new directors based on certain criteria; specification of tenure for independent directors; the retirement age for executive/whole-time directors has been maintained at 65 years.However, the option to continue beyond the age of 70 would be with Tata as per the guidelines approved by the board on retirement.No wonder some of the former CEOs who were thrown out because of Tata’s former retirement policy are bitter. ‘‘The previous move by Ratan Tata was mainly to throw Russi Mody out of Tata Steel,’’ says a former Tata group CEO. ‘‘It was then used to tackle Kerkar and one of the main accusations against Kerkar was that he failed to select a managing director under the Tata retirement policy,’’ said the former CEO on conditions of anonymity.Ratan’s policy was in complete variance to J.R.D. Tata, who used to give complete control and freedom to his professional managers and even make them even chairmen of group companies, he recalled.Corporate analysts, however, say Ratan Tata’s policy did manage to inculcate the sense of urgency, cohesion and professionalism in the Tata group which was needed in the post-liberalisation era. ‘‘Ratan bought the Tata group back from the brink. He has shown the leadership which the group required and will require in future,’’ said a senior BSE broker who tracked the Tata companies for the last 40 years.Flashback: Removing the satraps — the men who were eased out following Ratan Tata’s earlier retirment policy Russi Mody: First to be targetted by the Tatas, went out fighting from Tata Steel. A close confidante of JRD, Russi was later made part-time chairman of Air-India but without executive powers. Now lives a near retired life in Kolkata.Ajit B. Kerkar: The man behind the Taj group of hotels was eased out of Indian Hotels’ board when he turned 65, was not given a chance to lead the company as Chairman. Now runs his own hotel company, but is mired in a controversy with Left over the sale of Centaur Juhu.Darbari Seth: The late chairman of Tata Chemicals left without any fireworks. Had a promising run initially. but left disillusioned. Later, his son Manu also quit as managing director.
