MAJORITY of the Tata Group stocks bounced back after falling following the news of the decision of Mr. N. Chandrasekaran not to continue as Tata Sons Chairman after the lapse of his tenure on February 20, 2027. This positive reversal of fortunes of most Tata stocks did not suggest any magical development, but only pointed to the Tata Culture of excellence, dignity, ethics and values. Investor community knows these high-calibre virtues of the Tata Group companies and reposed faith in the Tata stocks in less than a day. This development can be cited as a classic example of the importance of ethics-and-value-based corporate management -- which, unfortunately, is not universally available in the corporate world. Even as corporate experts, Tata watchers, and media started discussing the pros and cons of Mr. N. Chandrasekaran’s expression of desire not to opt for continuation of his tenure beyond February 20, 2027, most asserted that the Tatas would handle the situation in the most matured, dignified and ethical manner -- in tune with the Tata culture. Most of them insisted that Mr. Chandrasekaran gave the Tatas a very sensible leadership that brought success in hard numbers in most of its ventures; and that he handled his decision to step down after the lapse of his current term in the most dignified manner -- expressing gratefulness to the Tata Group, and also his sense of satisfaction that he worked for a great institution. Most experts also asserted that Mr. Noel Tata, the Chairman of the Tata Trusts, is also a man of high dignity and ethics and sense of corporate responsibility and would handle the succession issue in tune with the Tata culture.

 

This should be considered a genuine tribute the greatness the Tata Group built in its systems over time -- through several generations of venerable leaders such as Mr. Jamsetji Tata (the founder the Tata enterprises), Sir Dorab Tata, Sir Ratan Tata, Mr. J.R.D. Tata, Mr. Ratan Tata and now Mr. N. Chandrasekaran (Chandra for all). Various Tata Group companies -- like Tata Steel, Tata Motors, for example -- also were led by people of great merit bringing to the group not just high valuation in money-terms but also high values. It must stated that Tata Steel (previously Tata Iron & Steel Company - TISCO) was the first company in the then British Raj to have framed a well-modulated ‘Labour Policy’ -- which was later emulated by other companies even in Britain. The core value around which the Tata Culture was woven with patience and pains has been the ultimate and uncompromisable interest of the stake-holders. The Tatas often stated that they owed everything to the larger society and wanted to give back to the people from whom the Tata Group drew much of its strength.

 

All these added great worth to the famed Tata Culture -- which the markets showed by restoring the worth of the dwindling Tata stocks in less than 24 hours after an initial slide following Chandra’s announcement. Most observers believe that the Tata Board would follow all norms of corporate decency and dignity while making the choice of Chandra’s successor. Some observers suggest three alternative scenarios -- one, the choice may rest upon Mr. Noel Tata (who, then, would have to step down as Tata Trust Chairman); two, choose another name from the galaxy of Tata insiders; or three, convince Chandra to continue until be becomes 65 years of age (which is about one-plus year away). No matter the choice, the observers believe that the Tata Group would make the choice in the most dignified and unacrimonious manner, proving to the world how smoothly such a leadership transition is handled in the high-octane world of corporate management. This is a tribute to the Tata Culture -- which is being expressed universally. Those who often tend to trivialise the issue of high-value corporate culture may realise the importance of ethics in corporate management where valuation or market-capitalisation counts lesser than than high standards of morality and human dignity.