How Tata Trusts are navigating life after Ratan Tata

The two philanthropic entities that collectively own over half the shares of Tata Sons, the conglomerate's holding company, have made their trustees permanent members, ending the practice of appointing them for fixed terms.

The board members of Sir Ratan Tata Trust and Sir Dorabji Tata Trust, which own 27.98% and 23.56% of Tata Sons respectively, would act as trustees for life, an executive privy to the matter said. Boards of the trusts, which oversee the functioning of all philanthropic entities of the Tatas, approved this decision and several others on Thursday.

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This was the second board meeting of the philanthropic entities after they entrusted Noel Naval Tata as the chair of Tata Trusts on 11 October. Noel, 67, was appointed chair after his half-brother Ratan Tata's demise on 9 October.

"All the members on the main Trusts, i.e. Sir Ratan Tata Trust and Sir Dorabji Tata Trust, would be permanent members," the executive cited above said on the condition of anonymity.

"So now, a member won't retire after three years and continues until the member decides to resign. It has also been decided that any new member who can be appointed as a trustee has to have unanimous consent."

In memory of Ratanji, Dorabji

Sir Ratan Tata Trust and Sir Dorabji Tata Trust were established in 1919 and 1932 respectively, in the memory of Ratanji Tata and Dorabji Tata, the children of Jamshedji Nusserwanji Tata who founded the Tata Group.

Sir Ratan Tata Trust has seven trustees, while Sir Dorabji Tata Trust has six board members.

Alongside Noel Tata, former defence secretary Vijay Singh, Chair emeritus of TVS Motors Ltd Venu Srinivasan, businessman Mehli Mistry, and lawyer Darius Khambata serve as trustees of both these trusts.

Ratan Tata's younger brother Jimmy Tata,and Jehangir H.C. Jehangir, a Pune-based businessman and philanthropist, are also members of the Sir Ratan Tata Trust.

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Former Citibank India CEO Pramit Jhaveri is on the board of Sir Dorabji Tata Trust.

The other significant decision the board members of Tata Trusts approved was to name Noel Tata as its third executive on the board of Tata Sons.

Tata Trusts can nominate three executives on the holding company's board that runs the Tata conglomerate.

Until now, former defence secretary Singh and TVS Motors chair emeritus Srinivasan are Tata Trusts' nominees on the nine-member board of Tata Sons.

According to the executive cited above, the board of privately held Tata Sons is expected to approve this resolution and appoint Noel as a board member at its next meeting.

In another change, Tata Sons chair Natarajan Chandrasekaran will liaise with the four-member executive committee of Tata Trusts, headed by Noel andcomprising Srinivasan, Singh and Mistry. This contrasts the earlier arrangement where Chandrasekaran briefed Ratan Tata about the group's businesses.

Fixed term

Trustees or board members of Tata Trusts under Ratan Tata had a fixed term of three years, who could be reappointed. Mint independently could not ascertain the reason behind this change.

An email sent to Tata Trusts seeking comment went unanswered. Tata Trusts are public charitable trusts registered under the Maharashtra Public Trusts Act, which allows charitable entities to appoint trustees for life.

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Tata Trusts is an umbrella entity that comprises 15 philanthropic entities, six of which own shares in Tata Sons. Sir Dorabji Trust and Sir Ratan Tata Trust are the largest shareholders, owning 51.54% of Tata Sons as of 31 March 2024. JRD Tata Trust owns 4.01%, Tata Education Trust and Tata Social Welfare Trust own 3.73% each and Sarvajanik Seva Trust owns 0.1%. MK Tata Trust, a philanthropic entity outside Tata Trusts, owns 0.6%. Together, the philanthropic entities own 65.9%. The Shapoorji Pallonji family owns 18.38%, while nine Tata Group companies own 12.86% of Tata Sons.

Seven individuals own the remaining 2.87% of Tata Sons' shares. Incidentally, Noel is the single largest individual shareowner, owning 1% of the shares. Ratan Tata owned 0.83%, while his brother Jimmy owns 0.81%.