The UK Prime Minister Keir Starmer has resigned from the position. He will hold the position until the UK Labour Party elects a new Parliamentary party leader. Among the many stated reasons for his resignation, these are considered as very important:
A. Inability to manage the fallout of Brexit on the UK economy and
society;
B. British politics moving from 2 party mode to a more fractious mode with strong pressure groups operating in the conservative and
labour parties. The arrival of a third force ‘Reforms Party’ has upset
the old equations;
C. Failure of Keir Starmer to present a Big Vision / Idea. All actions were short term in nature and carried no real conviction with British MPs and Electorate.
Despite winning an election with a very large majority, PM Starmer could not keep the ship steady and had to resign. Over the last decade after David Cameron and his failure to keep Britain in the European Union (losing the referendum), Britain has seen PM position uncertainty.
The TOP Position is not being held for a full term period in office and the consequent contra effect on governance and services starts getting felt.
Coming to India, while Indian politics has moved away from the instability of the 1990s and Prime Ministers Atal Behari Vajpayee, Dr Manmohan Singh, Narendra Modi have completed their terms of office and strengthened the Executive Branch, the same cannot be said of Indian Business.
We currently have 2 critically important cases of uncertainty at the TOP in Business (Chairmanship of the Board of Directors) – HDFC Bank and Tata Sons.
I. HDFC Bank – In March 2026 the non-executive chairman and
independent director of the entity – Mr Atanu Chakraborty
resigned. The cause for resignation was concern at certain
banking practices over the last two years being not aligned with
his personal values and ethics. It is believed that on certain
matters there was a disagreement between the chairman and the
MD Mr Sashidhar Jagdishan.
No real reasons have been made public. HDFC Bank has a short-
term appointee as chairman while there is a search on for the
position. The Banking Regulator Reserve Bank of India has
confirmed the Banks Financials as strong but this has not resolved
anything fully. The impact of this uncertainty at the TOP Board of
Directors position is a significant drop in the market price of the
share on the capital markets. The small investor has lost value
and a new chairman has not yet been appointed, adding to the
uncertainty. Better communication of resignation reason and
mitigating action taken would have helped.
Questions are coming up whether this episode is giving strength to
some powerful forces who are working to show that India
corporate management structures are weak, leading to reduction
in India corporate valuation. This issue is further reinforced by the
events that are occurring at Tata Sons Ltd.
II. Tata Sons – Enough has been said and spoken about Tata Sons
two thirds shareholding being held by charitable trusts. Tata Sons
is the holding company of Tata Business Corporate entities –
many large entities being listed entities. Being listed entities, small
investors / shareholders have a stake in various Tata Companies
like TCS Ltd, Tata Power, Tata Consumer Products, Tata Steel,
Tata Motors (Passenger and Commercial Vehicles separate
entities), etc.
The Banking Regulator Reserve Bank of India (also overlooking
NBFCs) had given instructions to all Indian promoter group
entities that they are an upper NBFC and core investment company and by end September 2025, the holding companies must be listed. Except Tata Sons Ltd, it seems other promoter groups holding companies have followed these instructions.
This listing issue has become a flashpoint in Tata Sons Ltd and it’s
majority shareholders the Tata Charity / philanthropic Trusts.
The chairman of Tata Sons Ltd Natarajan Chandrasekaran
(‘Chandra’) is awaiting a renewal of his Term of Office from
February 2027 (served almost 2 full terms of 5 years each) and is
sympathetic to the listing idea.
The Tata Trusts management on the Board of Tata Sons Ltd (led
by Noel Tata) do not want Tata Sons Ltd to be listed. This uncertainty on listing decision and the major losses on acquisition of Air India Ltd and digital initiative investments which have not paid off, have blotted Chandra copybook as chairman of Tata Sons Ltd.
Questions are arising on the internal ‘due diligence’ before significant funds are committed and on internal mechanisms of performance reviews and corrective actions.
Below this surface storm currents, there are other undercurrents of
the Tata Trusts trustees not seeing eye to eye (split into factions)
and Tata Sons Ltd is taking the brunt of these High level
disagreements.
Of concern to India economy and capital market valuation is the fear that the holding company Tata Sons Ltd may be unable to take any high level decision on new investment proposals and appointment of key management persons on large listed Tata companies. This period of ‘being in limbo’ with shares listing status and chairman term renewal still being undecided does not help the Tata entities and the minority shareholders of listed entities. The RBI may insist on time bound listing but there MUST BE someone to carry this important assignment forward.
Both the above examples show some form of indecision of action. The TOP chairman position cannot be left unfilled or lost in vagueness on power to act. It is here that Politics scores over Business. Politics does not permit a vacuum. The Head Executive position whether as Prime Minister or Chief Minister will always be filled fast.
Being chairman of a company has major responsibilities – particularly in areas of shareholders connection and communication, interacting with government authorities on crucial corporate matters, being involved in appointment of key management persons, calling and attending Board of Directors meetings and explaining to directors the working results and fresh initiatives of business (investments, new business initiatives, moving out of certain businesses), additional funding proposals, etc.
The chairman of the Board of Directors presents the ‘big vision’ to investors, capital markets and other corporate stakeholders.
In both the above cases of HDFC Bank and Tata Sons Ltd, delay will have it’s inevitable negative impact. The issue in Tata Sons Ltd is much more tangled than in HDFC Bank. Delay in resolution can impact India Business perception. We are aware that today, Valuation also flows from Perception.
If the perception becomes negative or clouded, the negativity impacts the company and in some ways, the entire India Business community.
Disclaimer
Views expressed above are the author’s own.
