Yesterday, Tata Son held 128 billion salts to a software group which cleared the amendment to the article of association (AOA) in the annual general meeting (AGM). Tata Trusts and Tata Sons own 66 per cent of the group and must have separate chairpersons. Since 2012, Ratan Tata, who chairs the Tata Trust, has also held a position as Chairman of Tata Sons. The subsequent chairman of Tata Sons, Cyrus Mistry and N Chandrasekaran, has not chaired Tata Trusts, but there was no provision for a legal separation of the two positions.

According to the AoA, to select a new chairman of Tata Sons, a selection committee will be formed to recommend the appointment of a person as the chairman of Tata Sons. The company’s board of directors may appoint the person as the chairman of the board of directors, subject to Article 121, which requires the affirmative vote of all directors. The same process will now be followed for the removal of a chairman. The selection committee will comprise three persons nominated jointly by the Sir Dorabji Tata Trust and the Sir Ratan Tata Trust who may or may not be directors of Tata Sons, one person no­m­inated by and from amo­ngst the board of directors of Tata Sons and one independent outside person selected by the board for this purpose, mention in AOA. The committee chairman will be selected by the Sir Dorabji Tata Trust and the Sir Ratan Tata Trust from amongst the nominees nominated by the Trusts.