THE TATA MISTRY BATTLE
A closer look at the boardroom battle at one of India's largest conglomerates
IiAS has recommended shareholders to vote FOR the proposal to remove Cyrus Mistry. Our decision focuses on an outcome that enables Tata companies to operate with minimum disruption – by maintaining the existing chain of command between Tata Sons and the operating company. Further, IiAS believes Cyrus Mistry’s position as a director of the operating companies was a consequence of his position as Chairperson of Tata Sons. With his removal as Chairperson of Tata Sons, his continuing on these boards as a non-independent director becomes untenable.
Our recommendation is not an endorsement of Cyrus Mistry’s removal from the Chairpersonship of Tata Sons. But, Cyrus Mistry’s currently remaining on the board, is likely to lead to unnecessary friction between the operating companies and Tata Sons, the largest shareholder. Therefore, our intent is to provide a clean slate and an occasion to overhaul the structural issues, which may have been present all along, but have surfaced with this sacking. It is imperative that the Tata group use the opportunity being provided to fix the control and governance structure – going back to the status quo is not an option, and investors do not want to see a re-run. We have discussed these in some detail in the related research referred here.
WHO WILL WIN?
Tata Sons has put out resolutions seeking to remove Cyrus Mistry from the board of each of the operating companies. Use this dashboard to select a company to understand its voting dynamics and analyze which side is likely to win the boardroom battle.
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