Ratan Tata can stay boss till '12

Tata Sons non-exec directors to retire at 75 now.

Tata Sons, the promoter firm of the Tata group, has raised the retirement age of its non-executive directors by five years to 75 years. As a result, Ratan Tata can remain non-executive chairman of Tata Sons till 2012.

A new set of guidelines adopted by the company today for the composition of its board of directors says, "The company will continue to benefit from the rich experience of those directors who add great value to the strategy and direction of the Tata Group.

This is a reversal of the policy adopted by the Tata Sons board in 2000 when it lowered the retirement age of all non-executive directors to 70. Till then, a director in an executive position retired at the age of 65, but continued on the board in a non-executive capacity till the age of 75.

The new policy is expected to be implemented across all Tata group companies. With the change in policy, Ratan Tata, who was supposed to retire in December 2007, can continue till 2012.

Other top level non-executives approaching 70 years in Tata Sons include Vice-chairman N A Soonawala and Director J J Irani.

Other revisions included creation of nomination committees for selection of new directors and specification of tenure for the independent directors. The retirement age of executive and full-time directors has been kept unchanged at 65 years.

"These revisions... reflect the views of independent directors on the boards of big Tata companies and take (into) account of the recent developments in the regulatory environment relating to good corporate governance," the statement said.

With the new changes being introduced at the Tata Sons, other Tata companies are likely to follow suit. "The revised guidelines are being circulated in the boards of Tata companies for their consideration," the statement added.

At present, some Tata companies have a different retirement policy for their non-executive directors.

For instance, even though Tata Sons fixed the retirement age for the non-executive directors as 70, Tata Tea had a different retirement age for them. D N Ghosh, 73, and YH Malegham, 72, are on the board of Tata Tea. They are likely to continue till 75.

There are two decision-making bodies that define and direct the business endeavours of the Tata Group "" the Group Executive Office (GEC) and the Group Corporate Centre (GCC).

The GEO comprises R Gopalakrishnan, Ishaat Hussain, Kishor Chaukar, Arun Gandhi and Alan Rosling besides group Chairman Ratan Tata. The GCC comprises Ratan Tata, Soonawala, Irani, R K Krishna Kumar, Gopalakrishnan, Hussain, Chaukar, Gandhi and Rosling.

Krishna Kumar is currently a director on the Tata Sons board, chairman of Tata Coffee and Asian Coffee, and vice-chairman of Tata Tea and Indian Hotels. Irani is a director of Tata Sons, Tata Industries, Tata Motors and Tata International, among others.

Soonawala is vice-chairman of Tata Sons and Tata Investment Corporation, and deputy chairman of Tata Tea. He is also director of several companies, including Tata Industries, Tata Motors, Indian Hotels, etc.