This story first appeared in DNA Money edition on Wednesday, May 1, 2013.
In the first major organisational restructuring since Cyrus P Mistry took the reins, Tata Sons, the holding firm of the over-$100 billion salt-to-software Tata Group, on Tuesday announced the formation of a group executive council (GEC), which will provide strategic and operational support to the chairman.
The GEC, set up under the aegis of the Tata Sons board, will assume the roles and responsibilities earlier performed by the group corporate centre (GCC) and group executive office (GEO) and will report directly to Mistry, the company said in a release.
It would be chaired by Mistry and comprise top executives of the group, including the newly appointed group chief human resources officer N S Rajan effective May 9.
Rajan replaces Satish Pradhan, who was earlier the executive vice-president in charge of group human resources at Tata Sons.
Among the initial members of the GEC are Mukund Govind Rajan, who will oversee brand, communication, ethics and corporate social responsibility and Madhu Kannan, who will head business development and public affairs.
“Other appointees to the GEC will be announced in due course,” the release said.
The GEC members will be assigned responsibilities by the chairman to lead various strategic functions, besides serving as nominees of Tata Sons on the boards of group companies.
The agenda of the GEC, Tata Sons said in the release, will include, “return on investment with a long-term perspective; support for and shaping of the agenda for philanthropy; preserving and enhancing the reputation of the Tata name; defining and driving a Tata way of working for group companies; and playing a proactive role so that the group fulfils its responsibility as a global corporate citizen”.
The move brings down the average age of the advisory council by around 20 years, said experts.
“The new council comprises younger professionals who are very much his age. Besides being talented, the new council members are of a different mindset, will bring in fresh thoughts and are more in tune with the way the new Tata Sons chairman would like to seek advice,” said Gita Piramal, business historian and author of Business Maharajas. She described the move as “standard procedure” in large corporate houses every time there is a change at the top-most management position.
Comparing Mistry’s approach with that of Ratan Tata’s, Piramal said Tata had inherited a less cohesive group. “Over the decades that he was head of the group, the first part went in welding it together,” she said.
In comparison, Aditya Birla inherited a very cohesive group and he brought in people of his age, said Piramal. “Kumar Birla inherited at a time when the group was in the execution stage because a lot of new projects were initiated and then unfortunately Aditya Birla passed away. At that juncture, Kumar Birla brought in a few people but he kept the old people to ensure smooth flow of the already commissioned projects,” she said.
“So I’d say Cyrus Mistry is where Aditya Birla was.”
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