Events surrounding the Tata Group, one of India's largest corporate giants, have revealed serious issues in corporate governance. Over the past month, the chairman of the conglomerate has experienced a series of events: from seeking to extend his term to announcing his departure and subsequent return to his former position.
The conflict itself, involving N. Chandrasekaran, who led the multi-billion dollar empire for nearly ten years, demonstrated the complexities of succession faced by large Indian industrial enterprises. The power struggle within the Tata Group, whose assets include Jaguar Land Rover and Apple iPhone assembly, highlighted weaknesses in management and the battle for power between boards of directors and controlling families.
Experts note that the consequences of these internal dramas extend beyond shareholder interests; the growing number of such crises undermines global confidence in the Indian economy, which heavily relies on the activities of these corporate giants.
Not an isolated case
The climax of the scandal at Tata occurred last week when the board of directors of Tata Sons, the group's parent company, granted Chandrasekaran another five-year term. This decision was made despite objections from Tata Trusts—philanthropic organizations that control the conglomerate and are headed by family patriarch Noel Tata.
Independent consultancy firm IiAS commented on the situation, stating that 'the board's rebellion against the shareholder-controller may be a precedent that corporate India should avoid.' However, Tata is not the only example: in recent months, many large Indian companies, from banks to consumer goods manufacturers, have faced issues related to leadership departures and failed transitions.
Navnit Singh from the consulting firm Korn Ferry told AFP that 'over the last 18–24 months we have seen frequent changes in top executives.' He added that, in his opinion, boards of directors may not be paying enough attention to long-term succession planning, as many companies lack contingency plans and are caught off guard.
The roots of the conflict at Tata run deep. For much of the year, Chandrasekaran's future remained uncertain while Noel Tata expressed concerns about losses in some group companies, investment expenditures, and the potential public listing of Tata Sons.
Leadership crisis
Tensions intensified after the death of former patriarch Ratan Tata in 2024, leaving unresolved questions about the distribution of authority in India's largest conglomerate. Shriram Subramanian from the consulting firm InGovern noted that 'when Ratan was alive, he did not trust Noel Tata enough to make him Chairman of the Trusts,' and that he 'did not ensure a structured transfer of power, even while alive.'
The succession crisis also affected India's largest private lender, HDFC Bank. The bank's CEO, Sashidhar Jagdishan, declined to renew his term last month. This sudden departure followed a shocking resignation of the chairman, forcing the directors to urgently seek a new leader.
A similar situation arose at Godrej Consumer Products: CEO Sudhir Sitapati received shareholder approval for a second five-year term in August but left a few days later, fueling rumors of tension between management and the founding Godrej family.
Experts believe that such incidents indicate the inability of boards of directors to prepare for leadership change before it escalates into a crisis. Tulsi Jayakumar, an economics professor specializing in family businesses, emphasized that independent directors must ask the uncomfortable question: 'Who is next and are they ready?' long before the situation becomes critical. Instead, most boards wait for a health crisis or a board crisis to put succession on the agenda, which she believes is not management, but 'crisis management in the guise of management.'
Aging billionaires
Tata Group's annual revenue is approximately five percent of India's GDP, and the group has become a key investor in strategic sectors, including semiconductor manufacturing, batteries, and electronics. Jayakumar noted that 'when succession fails in a group of Tata's scale, it is not a private family matter, but a systemic problem.'
She also pointed out that such conglomerates are central to supply chains, employ hundreds of thousands of people, and play a significant role in shaping investor confidence. The ongoing fight for succession signals to global capital that governance in India is still personality-driven rather than process-driven.
This issue is particularly relevant in a country where most economic activity is concentrated in family-owned businesses. Aging Indian billionaires are preparing for one of the world's largest intergenerational wealth transfers—amounting to $382 billion according to UBS data, implying massive changes in how many of these empires will be managed.
This transition could reshape some of the country's largest corporate empires and test whether boards of directors are ready to manage increasingly complex succession processes. Amit Tandon from IiAS stated that 'succession planning is now under much closer public scrutiny,' as investors understand that 'when the baton is passed to the next generation... it changes the trajectory of the company.' He concluded that 'the best way to view it is to consider succession planning an art, not a science,' and that 'Indian business has yet to master this.'