N Chandrasekaran is Tata Sons Chairman—The Empire strikes back

The TCS chief’s selection as Tata Sons’ Executive Chairman is a non-surprise. It was clear that after the Cyrus Mistry fracas, the wise old men of Bombay House would not take a chance with an outsider

Photo by Kunal Patil/Hindustan Times via Getty Images
Photo by Kunal Patil/Hindustan Times via Getty Images
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Sandip Ghose

N Chandrasekaran's appointment as Tata Sons' Executive Chairman is a "non-surprise" in many ways. To industry watchers, it was long clear that after the Mistry experience, the once-beaten, several times shy wise old men of Bombay House would not take a chance with an outsider.


On the other hand, after so much dirty laundry water had flowed into the Arabian Sea from the Dhobi Ghats of South Bombay, career professionals would have been extremely wary of walking into a potential Waterloo. Though a few names were floated in the media, it was probably to create an illusion of a wider selection process. Among, in-house contenders, Noel Tata—Ratan Tata's half-brother—has always been kept on call in the wings. But, appointing him would have sent out far too strong a parochial signal that may not have gone down well with the investor community as well as the government and regulatory bodies. The other powerful satraps were all well past their prime. Therefore, the home-grown boy Chandrasekaran was a predictable choice.


After the initial grand-standing by both sides for a few days, as the gloves came off it was evident to the world that the real issue at stake was control and not so much governance. So, now with the appointment of Chandrasekaran, there is absolutely no doubt in any one's mind that the Empire has struck back decisively.


Seen objectively, the selection of Chandrasekaran is an eminently sensible one even if he is the nominee of a single (albeit the largest) block of shareholders, namely the Tata Trusts. It will, at least, put to rest the anxiety in the minds of the public shareholders and institutional investors about a running feud between the CEO and the principal owners. There was also no guarantee that an entirely new incumbent would have hit the ground running. Irrespective of credentials, he or she would have taken some time to settle in and gain the confidence of the Board and the Trustees before getting a free run. In the case of Chandrasekaran, he should have no such problem and it would be safe to assume that he will have the support of the old guard. Further, he is unlikely to rock the boat too much, even if he does not restore status-quo ante. To cap it all he has a very successful track record behind him, having led TCS, the most profitable concern of the group.

After the initial grand-standing by both sides for a few days, as the gloves came off it was evident to the world that the real issue at stake was control of Tata Sons, and not so much governance. So, now with the appointment of Chandrasekaran, there is absolutely no doubt in any one’s mind that the Empire has struck back decisively.


This should go a long way in arresting the rapid value erosion driving down the market capitalisation of the Tata crown jewels. Ironically, this can once again reopen the very same questions of corporate governance and independence of the Board. There are also very fundamental questions about the strategic direction that the Tata companies need to take to stay relevant in the new business environment characterised by disruptive change.


But, those issues can be addressed only if the corporation lives to fight another day. For that, Chandrasekaran is arguably the best qualified to hold the reins till the turbulence subsides. At TCS he was credited for "making the elephant dance". Here the challenge would be different—that of not allowing an ageing giant to turn into a dinosaur.

Nowadays, the only patients who go to state run hospitals by choice are VIP political detainees and economic offenders on the plea of serious medical condition to escape police or judicial custody.


Unlike hospitality and aviation, for which privatisation is argued, it cannot be said that healthcare is not the state’s responsibility. However, it is true the government alone cannot do the job and private players have to be allowed into the healthcare space. But, that does not mean – the promise of “universal healthcare” can be entirely outsourced. Unfortunately, that is precisely what is happening whether by default or design.

Most private hospitals dodge taxes by declaring themselves as medical research institutes and often rewarded by the government by grant of land free or at hugely concessional rates. Not surprisingly, politicians indirectly own many of these trust-run hospitals.

If the collapse of government hospitals has been caused by poor work culture and corruption, private hospitals are plagued by lack of professional ethics. It is well known that there are nexuses at play right from the level of drug manufacturers, equipment vendors, implant suppliers, hospital administration, clinical laboratories and doctors. Health insurance companies complete this vicious circle by spreading the cost of the scam over a wider base of policy holders.


Further, most private hospitals dodge taxes by declaring themselves as medical research institutes and often rewarded by the government by grant of land free or at hugely concessional rates. Not surprisingly, politicians indirectly own many of these trust run hospitals.


Some friends from the medical fraternity try to justify the state of affairs saying that, these scams are not unique to India. But, that is little consolation for the common man who pays for these services. What medical insurance has done, ironically, is to raise the overall cost of healthcare. Also, even assuming their allegations have some substance it is still fallacious because, in those developed countries even the poorest man has access to some level of basic healthcare like through the NHS in Britain.


Therefore, despite the so-called “Mediclaim” insurance, customers end up paying large sums out of their pocket. Besides, in India cost of medicines and clinical tests for domiciliary treatment are not covered by insurance and that constitutes bulk of healthcare costs.

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Published: 13 Jan 2017, 10:42 AM