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The new ordinance of the Maharashtra government has challenged the long-standing governance system of Tata Trusts. Now the number of lifetime trustees in the trust has been limited. This change can have a direct impact on the decision of Tata Trusts in which it was proposed to give lifetime tenure to all the trustees.
Mumbai. Under the Maharashtra Public Trusts (Amendment) Ordinance 2025, now only one-fourth of the total board members in any trust can be lifetime trustees. This means that if there are eight members in a trust, only two can be made lifetime trustees. This rule is contrary to the October 2024 decision of Tata Trusts, in which it was decided to give lifetime appointment to all the existing trustees.
Lifetime trustee banned
This move of the government will affect the structure of two major organizations of Tata Trusts – Sir Ratan Tata Trust (SRTT) and Sir Dorabji Tata Trust (SDTT), which currently have six trustees each. The special thing is that SDTT had recently appointed Venu Srinivasan as lifetime trustee, whereas at the time of this decision the trustees were not aware of the new ordinance. Noel Tata was given this post for life even before the ordinance was implemented.
New guidelines on trustee appointment
Under the new rules, if the period is not mentioned in the trust deed, then now the tenure of the trustee will be maximum of five years. Upon the expiry of the tenure of the Trustee, he will automatically step down from office unless he is re-appointed. This step of the government will set a new framework not only for Tata Trusts but also for other big public trusts of the country. This change is particularly significant as Tata Trusts holds 66 per cent stake in Tata Sons.
New challenges for Tata Trusts
Experts believe that this ordinance is an attempt to limit the trend of increasing centralization in the trust after the death of Ratan Tata. Now Tata Trusts will have to make changes in the structure, appointments and tenure policy of its board. This decision will not only bring transparency in governance, but can also prove to be an important step towards making the operations of public trusts more accountable.
