Tata Trusts is streamlining its management structure by reducing top-heavy roles to focus resources more effectively on its core philanthropic missions and reduce administrative costs.
Ratan Tata News: Weeks after Ratan Tata’s death, Tata Trusts is reportedly undertaking an internal restructuring exercise to streamline operational and management expenses, according to The Economic Times quoting to people with knowledge of the matter. After the new changes, the roles of chief financial officer (CFO) and chief operating officer (COO) are being eliminated and dependency on the external consultants is also being cut.
It is important to note that the move was initiated much before the appointment of new Trusts chairman Noel Tata.
The report further adds that the decision was taken after an internal audit report revealed a major surge in staffing costs which estimated a cost at around 180 crores. In the year 2022, the additional expenses linked to so-called direct implementation projects had pushed the total workforce cost to `400 crore. The report was also reviewed by the trustees.
Direct implementation projects — executed by a trust directly through contractors as a donation — will also be reduced to a minimum and only to fulfil obligations. However, the Tata Trusts did not comment on the matter.
According to the Economic Times report quoting sources, the Chief executive Siddharth Sharma is ensuring checks and balances are put in place for effective governance and that the process is monitored continuously.
Tata Trusts is streamlining its management structure by reducing top-heavy roles to focus resources more effectively on its core philanthropic missions and reduce administrative costs. The organization is expected to rely increasingly on a leaner executive committee to drive decision-making and governance.
“A trust is supposed to operate like a servant of the public. We have to be true custodians of the money and property within the trusts,” said one of the persons cited. “The charity is for the public at large and not for its own staff. We don’t need ceremonial posts at high costs and, hence, proper checks and controls are being put in place.” Tata Trusts has senior finance experts and internal talent to ensure smooth operations and the efficient handling of accounts, the people quoted earlier said to Economic Times
While the size and scale of operations will dictate the need for operational costs, including senior staff, cost consciousness is critical for philanthropic organisations, said Anand Desai, managing partner at law firm DSK Legal, to Economic Times
“Organisations that benefit from such philanthropy can be made accountable through documentation, with appropriate oversight by the board and employees of the Trust,” said Desai. “Cost pooling is also a method often used, and domain experts can also selectively add to efficiencies.”
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