Tata Trusts Shifts to Permanent Membership for Trustees, Ending Fixed-Term Appointments

Just weeks after Ratan Tata's demise, the trustees of the Sir Ratan Tata Trust and Sir Dorabji Tata Trust have been made permanent members of the Trusts. This puts an end to the previous system of fixed-term appointments.

According to a report by Mint, the decision was made during a recent board meeting of both the trusts last week. The members will not have to retire unless they choose to resign. That means new members will only be appointed with the agreement of all current trust members.

"All the members on the Trusts, i.e. Sir Ratan Tata Trust and Sir Dorabji Tata Trust, would be permanent members," sources cited in the report said. "So now, a member won't retire after three years and continues until the member decides to resign. It has also been decided that any new member who can be appointed as a trustee has to have unanimous consent," the source added.

The two trusts together own over half of the shares in Tata Sons, the holding company of the $165 billion conglomerate, which oversees all the group’s philanthropic initiatives.

Tata Sons manages 30 companies across diverse sectors, like consumer goods, aviation, hotels, automobiles and IT. In recent years, Tata Sons has evolved into a global business conglomerate by acquiring brands like Jaguar Land Rover and Tetley Tea.

While Sir Ratan Tata Trust holds 27.98 per cent of Tata Sons, Sir Dorabji Tata Trust owns 23.56 per cent of the holding company's shares.

This was the second board meeting conducted by the trusts since appointing Noel Tata to lead Tata Trusts on October 11.

Shareholding pattern

Tata Trusts includes 15 charitable organisations, six of which hold shares in Tata Sons. As of FY24, the Sir Dorabji Trust and Sir Ratan Tata Trust are the largest shareholders, owning 51.54 per cent of Tata Sons.

The JRD Tata Trust holds 4.01 per cent, while both the Tata Education Trust and Tata Social Welfare Trust own 3.73 per cent each in the entity. The Sarvajanik Seva Trust owns 0.1 per cent and the MK Tata Trust, which is separate from Tata Trusts, holds 0.6 per cent. On overall basis, these philanthropic organisations own 65.9 per cent of Tata Sons. The Shapoorji family owns 18.38 per cent of Tata Sons.