There is a familiar danger in corporate storytelling: once a narrative becomes sufficiently compelling, facts begin to be arranged around it rather than used to test it.

The emerging account of N. Chandrasekaran’s exit from Tata Sons has already acquired such a narrative. An accomplished professional chairman who presided over a dramatic increase in the Tata Group’s market value was denied a third term because the chairman of the controlling Tata Trusts would not sign off. His resignation came barely six days before the annual general meeting, apparently surprised trustees, and prompted a senior insider to describe his departure as irresponsible.

It is a powerful story. It also leads almost irresistibly to a moral conclusion: an interfering owner overreached and one of India’s most important corporate groups lost a highly successful professional manager. But what if that is only one way of reading the same facts?

This is not an argument that Chandrasekaran failed, nor an endorsement of his departure. It is an attempt to stress-test the consensus. Every proposition below is deliberately put in its strongest form. The weaknesses in the argument are equally important and are set out later.

At least four assumptions underpin the dominant narrative: that Chandrasekaran’s performance record is unambiguously exceptional; that the shareholder’s demands were unreasonable; that the timing of his departure was reckless; and that Tata Sons is necessarily worse off because of it. None is beyond argument.

Asking For A Roadmap Is What An Owner Is Supposed To Do

Begin with the most basic fact about Tata Sons: Tata Trusts control roughly two-thirds of it. During Chandrasekaran’s tenure, the Tata Group embarked upon enormously ambitious ventures in aviation, semiconductors, digital commerce and battery manufacturing. These are not incremental extensions of established businesses. They are capital-intensive enterprises with long gestation periods and potentially enormous calls on capital before their economics become apparent.

Against that background, the reported disagreement assumes a rather different character. If the sticking point before granting another five-year mandate was a demand for a clear performance roadmap for these investments, that is not self-evidently shareholder interference. It could equally be described as shareholder oversight. Indeed, what else should a controlling shareholder ask?

A fresh five-year mandate for the chairman overseeing some of the largest strategic bets in the group’s history cannot logically be treated as an entitlement arising from past performance. The shareholder is entitled to ask where the capital is going, what milestones will demonstrate progress, when returns should reasonably emerge and under what circumstances the strategy should be reconsidered.

The fact that unanimity was apparently not achieved can itself be viewed as evidence of a governance mechanism doing precisely what it was designed to do. A board process cannot be considered robust only when it produces the answer desired by the incumbent.

Chandrasekaran’s Performance Is Really Two Stories

The strongest argument for Chandrasekaran is also the simplest: look at the value created under his leadership. The group’s market value roughly tripled. That is a formidable headline. But headlines can conceal periods. The contrarian case asks whether Chandrasekaran’s tenure should really be examined as two distinct chapters.

The first began in the aftermath of an extraordinary boardroom crisis and from a relatively depressed base. It also coincided with a remarkable period for the group’s dominant profit engine. The second looks considerably less spectacular.

By the reporting’s own account, the enormous value creation of the earlier period has not been replicated during the subsequent four years, during which aggregate group value has moved comparatively little even as the benchmark index rose substantially. That distinction matters.

If almost all the celebrated re-rating occurred during the first term, it is legitimate to ask whether the second term should be evaluated independently rather than allowing the extraordinary first-term performance to answer every subsequent question. There are operational difficulties as well.

The IT flagship confronts the possibility that artificial intelligence will reprice portions of its traditional services business, accompanied by revenue pressure and headcount reduction. The UK-based automobile subsidiary has had to contend with a production-halting cyberattack as well as a contested brand relaunch. The group’s European steel exposure remains structurally difficult.

Several of these problems are plainly exogenous. No chairman creates technological disruption, cyberattacks or the structural economics of European steel. But there is an unavoidable symmetry in corporate leadership: if a chairman receives credit when the portfolio rises spectacularly, he cannot be completely separated from the portfolio when conditions deteriorate.

And that becomes particularly relevant when the question before shareholders is not whether the previous decade was successful, but whether the same chairman should receive another five-year mandate.

The Danger Of Falling In Love With One’s Own Strategy

There is an even more uncomfortable argument. The executive asking for additional time to prove the wisdom of major investments is also the executive under whom those investments were made.

Corporate history is filled with examples of what economists and governance specialists describe as escalation of commitment: once management has invested money, prestige and institutional energy into a strategy, abandoning or materially altering it becomes psychologically and organisationally difficult.

The next rupee can begin to be justified by the previous rupee. That does not establish that Tata’s aviation, semiconductor, battery or digital investments are misguided. Far from it. It merely means that this is precisely the moment at which an independent shareholder challenge becomes most valuable.

If the proposition is, in effect, “give the strategy another five years and its value will become apparent,” the perfectly reasonable response is: what should we expect to see after one year, two years and three years that tells us whether the strategy is working? Intermediate proof points are not hostility to long-term investment. They are how long-term investment is governed.

According to the reported reconstruction, such questions appear to have been asked and the answers did not produce sufficient unanimity for another mandate. That deserves more consideration than the simple description of an owner interfering with a successful professional manager.

Was Resigning Actually The Cleaner Decision?

The criticism of Chandrasekaran’s timing is emotionally powerful. Why resign only days before an AGM Why introduce uncertainty into one of India’s largest corporate groups? But that criticism assumes the alternative was orderly continuity. It may not have been.

Once a chairman knows that unanimous support for his reappointment is absent, his authority inevitably begins to change. A chairman uncertain of his own continuation is in an awkward position to make commitments whose consequences will stretch years beyond his existing tenure.

That is particularly true when those commitments involve enormous amounts of capital. Seen this way, announcing the position well before the formal expiry of the term could actually provide Tata Sons with more time to organise an orderly succession than months of negotiation followed by an eleventh-hour breakdown.

There is, however, another aspect of the criticism that is considerably harder for Chandrasekaran’s defenders to dismiss. According to the account, he himself chaired the committee responsible for succession planning, yet no succession process had begun. If accurate, that fact deserves far greater attention.

The absence of an obvious successor is routinely presented as evidence of Chandrasekaran’s indispensability. The opposite interpretation is possible: an institution as important as Tata Sons should never become so dependent upon one individual that his departure creates a vacuum.

If succession planning was indeed part of his responsibility, the vacuum cannot simultaneously be used entirely in his defence.

Perhaps Key-Man Dependence Was The Governance Problem

There is something peculiar about arguing that a chairman must remain because nobody can imagine the organisation without him. That is normally considered a governance weakness.

A structure in which one individual becomes the indispensable strategic centre of the holding company, its most important new ventures and the group’s broader direction contains considerable key-man risk.

The Tata operating companies do not disappear because the Tata Sons chairman changes. They have chief executives, boards, management teams, assets, employees, customers and institutional relationships of their own.

And the holding company, according to the account, approaches this transition with a clean and effectively debt-free balance sheet. Whatever the disruption involved in changing leadership, this is hardly the condition in which Tata Sons found itself during the turmoil of 2016.

If an organisation can change leadership only during a period when there are no important projects underway, there will never be an appropriate moment to change leadership.

The Deeper Question: Who Actually Owns The Authority?

Perhaps the most interesting aspect of the entire episode has little to do with Chandrasekaran personally. It concerns the unusual architecture of Tata governance. Much of the commentary implicitly assumes that professional managerial autonomy represents good governance while promoter or shareholder intervention represents its opposite.

That proposition is not as obvious in the Tata structure as it might be elsewhere. This is not a widely dispersed corporation whose professional management is being second-guessed by a tiny activist shareholder. Tata Trusts control approximately two-thirds of Tata Sons.

From that perspective, the opposite question becomes legitimate: how much strategic discretion should a professional chairman exercise before the controlling shareholder is entitled to demand greater accountability?

The Tata Group has now experienced two chairman transitions under strain within roughly a decade. That suggests something more fundamental than difficult personalities.

There appears to remain an unresolved question about where ultimate strategic authority resides — with the professional chairman of Tata Sons, with its board, with Tata Trusts as the controlling shareholder, or in some carefully negotiated equilibrium between them.

Replacing one chairman does not resolve that constitutional question. Neither would retaining him.

Turn The Conventional Narrative Around

Almost every central proposition in the received account can therefore be inverted. The conventional view says a capable chairman was pushed aside by an interfering owner. The contrarian reading says a shareholder controlling roughly 66 per cent of the company asked what enormous capital commitments were expected to produce and was entitled to receive a satisfactory answer.

The conventional view says tripling group market value settles the performance debate. The contrarian view asks how much of that re-rating occurred during the first term, from a post-crisis base and with the extraordinary contribution of TCS, and why the subsequent period should not be examined separately.

The conventional view calls departing shortly before the AGM irresponsible. The contrarian argument says that remaining in office without assured board backing could have produced something worse: a lame-duck chairman making long-duration commitments on behalf of the next leadership.

And where the conventional narrative says the succession vacuum demonstrates Chandrasekaran’s indispensability, the opposing case says the vacuum itself requires explanation — particularly if the chairman was responsible for the committee meant to prevent precisely such a situation.

But The Contrarian Case Has Serious Weaknesses

None of this establishes that Tata Trusts were right. There are at least four substantial weaknesses in the argument above. The first is shared authorship.

The aviation, semiconductor, battery and digital strategies were not clandestine projects undertaken by a chairman acting alone. They were approved through the group’s governance machinery and blessed by the same institutional shareholders who may now be demanding evidence of their success.

There is something inherently convenient about becoming sceptical of investments after participating in their approval.

More importantly, changing the chairman does not make the risks disappear. A semiconductor fabrication project remains enormously complicated regardless of who occupies the chairman’s office. An airline turnaround remains an airline turnaround. The institutional knowledge accumulated during the investment phase has genuine value. The second weakness concerns time horizons.

Comparing Tata Group market value against an index over four years may be fundamentally unfair if the deliberate strategy was to sacrifice near-term returns to build businesses whose economics will emerge over a decade. Semiconductors, aviation and battery manufacturing are not software businesses.

If today’s muted market performance represents the investment required to create tomorrow’s industrial platforms, then criticising Chandrasekaran for short-term underperformance effectively judges a long-term strategy using precisely the short-term metric that strategy rejected. The third weakness is execution risk during transition. Long-cycle investments need stable sponsors.

Airline lessors, technology partners, sovereign counterparties and semiconductor partners do not operate in an abstract governance seminar. They negotiate with individuals and institutions and make judgments about continuity.

A theoretically correct governance intervention can therefore carry very real economic costs. Saying “the governance process worked” provides little comfort if a strategic partner subsequently changes the price of its commitment because it perceives greater uncertainty.

And the fourth weakness may be the largest of all: the sourcing remains thin. Much of the reconstruction depends upon unnamed people close to the protagonists at precisely the moment when both sides have every incentive to influence the narrative.

The description of Chandrasekaran’s departure as irresponsible is reportedly an anonymous brief. So, too, is the account of what Noel Tata sought from him. Until documentary evidence, formal statements or subsequent events corroborate these versions, every sweeping conclusion should be treated as provisional.

What Happens Next Will Tell Us Who Was Right

The most sensible position may therefore be to resist choosing heroes and villains too quickly. Instead, watch what happens. If the AGM and subsequent months reveal a thoughtful and organised succession process, the argument that the institution was prepared for transition becomes stronger. If there is an obvious scramble, questions about succession planning become unavoidable.

If Tata Trusts eventually articulate a specific performance framework they wanted applied to the group’s new investments, the shareholder-discipline interpretation gains credibility. If the objections remain vague, the accusation of interference becomes harder to dismiss.

The fate of the new businesses will be even more revealing. If the successor continues broadly the same aviation, semiconductor, battery and digital strategies, the disagreement was probably less about strategic direction than accountability, pace and governance. If those investments are radically restructured or abandoned, the dispute was much deeper.

The reaction of lenders, operating-company boards and strategic partners will also matter more than commentary. Institutions committing real money provide a more useful measure of confidence than anonymous quotations.

And finally, the pending regulatory question concerning the holding company’s registration status could eventually force greater disclosure. That may be the most welcome development of all. Because the extraordinary thing about the present debate is how confidently conclusions are being drawn from information that remains largely private.

Perhaps Chandrasekaran was an exceptional chairman whose long-term industrial strategy needed another five years and whose departure will eventually be regarded as an expensive act of shareholder impatience. Perhaps Tata Trusts did exactly what controlling shareholders are supposed to do: challenge a successful incumbent before committing another five years and billions more to strategies whose ultimate returns remain uncertain. Or perhaps both propositions contain elements of truth.

For the moment, the most intellectually defensible conclusion is not that either side has won the argument. It is that Tata’s governance system has finally been forced to answer a question it has postponed for years: when professional managerial authority and controlling ownership disagree over the future of the group, who ultimately gets to decide,  and on what evidence?

That question will outlast any chairman.