COVER STORY

Mistry's removal was inappropriate: Experts

36CyrusMistry Lost cause: Cyrus Mistry at Bombay House | Janak Bhat

Many industry experts have expressed their dissatisfaction over the removal of Cyrus Mistry as the chairman of Tata Sons. Some even feel that the move could dent investor confidence in the company.

Kris Lakshmikanth, CEO of the recruitment firm Head Hunters India, feels that Mistry was taking appropriate steps by selling businesses that were not making money. “Ratan Tata making a comeback is not a good sign and will bring a bad name to the Tata brand. There is nothing that Ratan Tata can bring into the business at this age. Even at Infosys, Narayana Murthy's return did not help the company much. In fact, he could not achieve much after he made a comeback. Some people resisted Mistry's attempts at bringing changes at Tata Sons. I feel he was taking the right steps but that did not go down well with Ratan Tata,” Lakshmikanth told THE WEEK.

According to Lakshmikanth, tension has been brewing at Tata Sons for many days and this move was expected. “We have started getting CVs of some senior members of the Tata group companies, who have started looking out. It would be very difficult for Tata Sons to look for a new head for the company as any new person will be hesitant to face the Tata board after this ugly incident. Tata Sons should not have sacked Mistry in such a way. Many initiatives led by Ratan Tata as the chairman have been unsuccessful, but he was never asked to leave in such a way,” added Lakshmikanth.

Another head of an HR firm, who did not want to be named, said that such incidents will cast a shadow on the Tata brand itself and many senior management people will lose confidence in the company. “Such instances will raise questions on corporate governance and cast a shadow on the leadership development strategies and succession plans of large corporate houses and conglomerates. From a recruitment perspective, it may wean potential C-suite talent off. Candidates will want clarity on leadership from the promoters and large shareholders’ family. No organisation wants to be found wanting when it comes to finding the right people for the top job. Moreover, such moves will bring the spotlight on the appointment of the next chairman, leading to greater scrutiny and review. Being India’s biggest conglomerate, the incident could re-ignite the debate on the morality of boardroom strategies of promoter or founder families,” he told THE WEEK.

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