Why Tata's Chandrasekaran Choice is a Safe Bet

Tata Consultancy Services (TCS) Chief Executive N Chandrasekaran gestures as he speaks during a news conference in Mumbai on April 18, 2016. Chandrasekaran was appointed Tata Group Chairman on Thursday. (REUTERS/Shailesh Andrade)

On the face of it, the Tata group’s choice of Natarajan Chandrasekaran as Chairman to replace the ousted Cyrus Mistry appears a case of safety first, but look a little closer and the logic becomes clear.

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The group clearly wants someone who will restore a reputation for good governance and probity that has taken a severe beating over the three months since Mistry was summarily dismissed.

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The Tatas had three options: Parachute in a chief executive from a multinational based in the West; choose someone from within the Tata family already employed in the group; or pick a professional Indian CEO from within or outside the group who had experience across sectors.

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Option one would have been the boldest. But it would have come with the risk of more confrontations as the choice would have probably have been a free thinker with little problem in walking away if the going got unpleasant. The last thing the group would have wanted after the Mistry mess was a high-profile global CEO walking out on it.

Option two was hobbled by the lack of obvious talent and experience across sectors. Noel Tata had been rejected in the selection process that landed Mistry the top job.

Option three was the only way to go. The group has clearly got over its Parsi fixation, having appointed several non-Parsis to senior positions in recent years.

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