What’s at stake at the House of Tatas?
Superb article by the usually superb Sucheta Dalal:
On 24th October, when the board of Tata Sons decided to sack its chairman Cyrus Mistry, even those in senior regulatory positions speculated that the extreme action may have been a move to protect the group’s reputation. They expected to hear of some serious transgression, like insider trading or worse, which required damage control action to protect the Tata reputation.
Nothing of that sort emerged. Instead, it is now clear that the powerful board of India’s most reputed corporate group, ganged up behind a retired chairman to strike a blow below the belt that it simply cannot justify, days after the incident. If anything, Mr Mistry’s restrained letter to the directors of Tata Sons calls into question the governance standards of the Tatas themselves. The distasteful episode exposes how easily ‘independent directors’ can be pressed into service to back questionable decisions that serve individuals rather than the company or its shareholders.
Facts available in the public domain, so far, make it clear that Mr Mistry did not deserve the humiliation heaped on him. Even the claims about Mr Mistry’s poor performance are being openly disputed both, by Tata Sons’ internal records (the remuneration committee’s evaluation) and by a few directors of group companies. What is worse, the Tata group is compounding its folly by unleashing a campaign of selective leaks and innuendoes through the media. Let’s look at a few issues at stake here.
She looks at a lot of names and their questioned doing in the Tata saga. It is amazing to see so many top names in the saga. It is not just a Tata problem alone and is something much bigger.
What stood once for absolute upright values is now full of so many holes that one does not know where to begin. How several stakeholders have been fooled into the Tata brand.
Eventually all good things come to an end. The longer the good run tenure the worse are its end times. Though Tata group is not ending anytime soon, but one can bury the Tata brand of governance…