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Some of Cyrus Mistry’s early actions when he took charge as chairman of Tata Sons are also telling. The Tata Group was anyway known for its high standards of cor-porate governance, but Mistry took it up several notches. For instance, he insisted that his family firm, the Shapoorji Pallonji Group, be kept away for any construction contracts with the Tata Group, a favourable treatment that Mistry family-owned companies had conventionally enjoyed for decades. He also was instrumental in discontinuing some long-term contracts which gave preferred treatment to SP Group firms. He was thick-skinned enough to be unfazed by rumours about his alleged misdeeds or motivations.
One of the bones of contention among the Tata top brass was how much information could be shared with elders who were not officially on the boards of listed Tata entities. The Securities and Exchange Board of India’s norms against insider trading had become stronger. Not only was there a prohibition against the use of insider information for private profit, but even if no profit was sought, no information could be shared until it became public. Surely, this was a much stricter and higher standard that Mistry wanted the Tata Group to follow. This was the higher notch that Mistry insisted upon. That surely ruffled several feathers that eventually led to a gathering storm, leading to his eventual downfall. Some people were not pleased about the watertight control on info leaks that Mistry had instituted. Ratan Tata who persuaded an initially reluctant Mistry and appointed him as chairman had advised him, “If you want my inputs, I will give it to you, but be your own man and be yourself and just be driven by the fact that every act you do and every move you make has to stand the test of public scrutiny." Mistry followed this scrupulously. He was also instrumental in codifying the first official manual of corporate governance in the Tata Group, which was prepared and ready just before his exit. One of his legacies is perhaps the adoption of those standards, and their further strengthening. He also appointed the first Brand Custodian for the Group, a role meant to reinforce the twin pillars of good governance and the Tata reputation for giving back to society.
Mistry’s ouster in that infamous board meeting of October 2016, was indecorous and rather unfair. Like Yudhishthira lost his two inches of high and pristine status in the Mahabharata, this incident too took some sheen off the Tata Group. It is ironic that one of India’s most bitter legal fights over corporate governance happened at the highest levels of an iconic group. The final verdict from the apex court was only a partial validation for Mistry, but he fought mostly a lone battle till the very end. To this author, he appears more wronged against, than being wrong himself. In his death, India Inc lost a promising and down-to-earth leader. When he took charge as our biggest group’s leader, he had probably mentally committed the next two decades of his young life. His style was change with continuity. He was unafraid of reviewing past decisions and taking corrective action, in a non-disruptive way. Alas, that was not to be.
The Tata Group is probably the only business entity in the world that at its top is two-thirds owned by non-profit trusts, which are mandated to give all their income to charity. This is an astounding model, and we owe this unique structure to the late Jamsetji Tata and his two sons Dorab and Ratan.
Mistry surely understood and was aware of the weight of this amazing legacy that he had to shoulder. He tried in his own quiet and unassuming way to take it much further. But fate cut short his tenure with the ultimate crown, and now even his life.
Ajit Ranade is a Pune-based economist
