Tata Trusts has approved a third term for Chairman N Chandrasekaran — a first despite the Group’s retirement policy which requires executives to step down at 65, according to an Economic Times report citing sources.

Livemint could not independently confirm the development.

As per the report, Chandrasekaran’s second term ends in February 2027. At the time he will be 65 years of age. Tata Trusts did not have a comment, as per the report.

The Tata Group’s retirement policy, traditionally executives are expected to retire at 65, but they are allowed to hold non-executive roles till 70.

Why extension for N Chandrasekaran?

One source told the paper that the company took “continuity of functioning” into consideration, while extending Chandrasekaran’s term beyond the traditional tenure.

They added that if was felt that his leadership “was necessary to see through critical projects like semiconductors, batteries for electric vehicles and Air India”.

“The Trusts resolution was sent to Tata Sons, which will of course have to decide when approving a third term from 2027,” the source added.

What is the proposal?

According to the report, highly placed sources said that it was Noel Tata and Venu Srinivasan who proposed extending Chandrasekaran’s term as Chairman for another five years at a meeting on September 11.

The resolution was unanimously approved, it added.

N Chandrasekaran at helm, not unexpected?

Notably, Chandrasekaran’s second five-year term was approved in February 2022. He took the helm, moving from executive role at Tata Consultancy Services (TCS). He first joined the board of Tata Sons in October 2016, and was appointed Chairman in January 2017.

Ketan Dalal, MD of Katalyst Advisors, a consulting firm, told the paper that this decision is not unexpected given the recent internal and external challenges at various Tata companies.

“Tata is an extraordinary and respected conglomerate, but it is currently navigating a complex landscape of internal and external challenges, from the Air India incident and rising geopolitical tensions to increasing market pressure around a potential Tata Sons IPO. At the same time, the group is making bold bets on strategic growth areas such as semiconductors, defence and aviation,” he noted.