A chairman can win a vote. He cannot lead against the people who own the company.
This article was first published in Forbes India on September 29, 2026; https://www.forbesindia.com/amp/article/column/tata-sons-alignment-before-authority/2998854/1
A four to one vote usually settles a matter. This one did not. The Trusts say the resolution is void, and they are preparing to go to court.
Why one vote stopped a board
The Articles of Association of Tata Sons give the Trusts more than a shareholding. They allow the Trusts to nominate one-third of the directors. And they require that any decision needing a board majority also carry the affirmative vote of a majority of those nominee directors.
The Trusts have two nominees on the board today. Noel Tata voted against the reappointment. Venu Srinivasan, the other nominee, voted for it. One out of two, the Trusts argue, is not a majority, so the resolution fails. Tata Sons argues that a one-one split is exactly the tie that the chairman’s casting vote exists to break. That is now the legal question.
It need not have arisen. The Trusts had three nominee directors until Vijay Singh stepped down in September 2025, and the third seat has been empty since. With three votes there would have been a majority one way or the other. With two, the owner was able to deadlock itself.
A structure that assumed agreement
This is what happens when an ownership structure is designed for harmony. The Articles give the Trusts a veto in the boardroom. They say nothing about what happens when the Trusts cannot agree among themselves. There is a casting vote for a divided board and no tie-breaker for a divided owner.
And the owner here is not a person. It is a board of trustees, and it has been split for a year. The seat that is empty today became empty because the trustees could not agree on renewing Vijay Singh. Mehli Mistry left weeks later. A day before the Tata Sons board met this month, one of the Trusts wrote to Venu Srinivasan asking him not to vote on the proposed listing of Tata Sons. He declined, saying his duty as a director was to the company. That is a fair reading of company law. It is also the moment the owner’s two voices became public.
Tata is not unusual in this. Most Indian promoter structures run on veto rights, reserved matters and unwritten understandings. They work while everyone wants the same thing. Very few of them say what to do when the owners are divided, which is the only time they are needed.
Office without a mandate
Chandra now holds the office without the owner’s backing. He may be right in law and still find that he cannot use his authority. The decisions that matter at Tata are long ones. A semiconductor plant. An aircraft order. A large acquisition. A dividend policy, which is also what funds the Trusts’ hospitals and universities. None of them can ride on a contested resolution. Executives will hedge. Every future decision carries the same question mark, because if one appointment can be declared void, so can the next.
Nor does the argument stay in the boardroom. It has already reached the regulator, the courts and the front pages, where narrow legal questions get answered and the direction of a group does not. The Trusts will pay for that too. Their grants depend on the profits of the companies below them.
Memory cuts both ways
The Tata Group knows this story. Cyrus Mistry became chairman in 2012. What he thought the Group needed and what the Trusts wanted were never reconciled. The difference simmered for four years, ended in his removal in 2016 and was followed by nearly five years in court. Whatever one’s view of the merits, the Group paid in reputation, in management attention and in time.
Institutional memory is one of Tata’s greatest strengths. It tells people how to act when there is no rulebook. But it is also a record of what not to repeat. Only the configuration has changed. In 2016, the board and the owner were aligned and the chairman was not. In 2026, the board and the chairman are aligned and the owner is not. The result is the same. A chairman without the alignment of his owners cannot lead, however capable he is and however valid his appointment.
The group level is still opaque
Writing on the Mistry episode in 2017, I had observed that “while Tata group companies individually are recognized for good governance and transparency, the organization at group level turns out to be quite opaque.” Nine years on, the fault line has not moved.
It shows in how this dispute is being fought. Questions have now been raised in the press about a business arrangement involving the chairman’s family and a company connected to one of the Trusts’ nominees, and whether the board was told about it. The facts may well be explained. What is telling is the route. In a listed company, a relationship of that kind is declared, examined by independent directors and disclosed. Here it arrives through a leak in the middle of a fight. The Reserve Bank has told Tata Sons to list. That will not settle who runs the Group, but it will end this particular kind of secrecy.
What has to happen now
A court can decide whose reading of the Articles is correct. It cannot make an owner and a board agree. Only they can do that, and both of them know what the alternative costs.
The Trusts need to settle their own position first, fill the seat they have left empty, and say plainly what they expect of Tata Sons over the next five years. The board and the chairman need a mandate the owner has signed, not only a resolution that has been passed. Both need to write down what a nominee director is for, and what happens when the nominees disagree, so that the next split does not become the next crisis.
The Tata Group remembers how to stand by its people in a crisis. It must now remember what it cost the last time its owner and its chairman parted ways. The price will be higher this time, and it will be paid in public. The courts can tell Tata who is right. Only alignment can decide who leads.
