Dec 20 (Reuters): Good governance and a strong reputation matter. That is the main message from the Tata group's two-month battle with ousted Chairman Cyrus Mistry. He has now resigned from the boards of various companies within the Indian software-to-salt conglomerate, but not before inflicting plenty of damage.

A war of words between Mistry and patriarch Ratan Tata has illustrated the urgent need for reform, in particular at the cosy board of the unlisted holding company, Tata Sons, and its relationship with the philanthropic trusts that control it. In the mudslinging, neither Mistry nor Ratan Tata have come out looking good.

Investors have voted with both their hands and their feet. In a stinging rebuke to Ratan Tata and Tata Sons, less than one-third of independent shareholders supported a motion last week to remove Mistry from the board of Tata Consultancy Services, India's biggest company by market value - even though Tata Sons' controlling stake ensured he would have got the axe.

The combined value of Tata's top ten listed firms, including Tata Motors and Tata Steel, has fallen by more than $10 billion since the saga has unfolded. Granted, India's benchmark CNX Nifty 50 has also fallen amid a broader cash crunch in the country. But that total is $2 billion more than the theoretical loss if the ten firms' performance had merely tracked the index.

In fact, strip out TCS, the IT giant whose shares were already under pressure, and Tata group company shares have fallen twice as much as the market. The mess is a sharp reminder that it pays to be a well-run public company.