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Ratan Tata questioned Cyrus Mistry’s suitability as chairman-designate of Tata Sons due to concerns over his leadership style and values.
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Tata regretted his decision to appoint Mistry, citing his “British education” as a factor that blinded him to potential issues.
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Mistry’s removal as chairman in 2016 was a difficult decision that “took a lot out of” Tata, according to Venu Srinivasan.
Ratan Tata, the former chairman of Tata Sons, has expressed regret over his decision to appoint Cyrus Mistry as his successor. According to a new book, “Ratan Tata: A Life” by Thomas Mathew, Tata began questioning Mistry’s suitability during their year-long mentorship period in 2011 ¹. Mistry’s leadership style and values seemed to conflict with those of Tata Sons, causing tension between the two.
Tata had initially endorsed Mistry despite reservations from group veterans. However, as Mistry pursued ventures outside the group’s core business areas, Tata grew increasingly uncomfortable. The final straw came when Tata Power acquired Welspun’s alternative energy assets without board approval, which Tata saw as a “real flare-up” [1).
In retrospect, Tata wished Mistry had stepped down voluntarily after losing the board’s confidence. Nitin Nohria, who was brought in to support Mistry, noted that Tata “suffered more” from the decision to remove Mistry than Mistry himself ¹. Venu Srinivasan added that the decision “took a lot out of” Tata, highlighting the difficulty of the situation.
The conflict between Tata and Mistry serves as a cautionary tale about the importance of aligning leadership styles and values in corporate governance. As Tata reflected, “Cyrus Mistry’s British education blinded me. I naively thought that the DNA of a person with such an impressive education would be different”
