An interesting article in The Economist (Link will stay free for a week) arguing that the best way to ensure a smooth and successful succession in a company is to groom an insider through a formal selection process rather than recruiting someone from outside or holding a competition among insiders (as the BJP is doing now by default).
Somewhat related Question: What is the difference between Heir Apparent and Heir Presumptive? No searching or looking at dictionaries please.
The difference between the first born son and the unlucky younger brother 😉
Wait, they want a “formal selection process” among insiders; but frown upon “holding a competition” among insiders?
So, essentially they want the CEO to “formally” select someone he wants, unfairly. Another flawed assumption they make with their whole grooming+selecting-by-CEO idea, is that CEOs exit with honors. Many times they are booted out, discretely or indiscretely.
Frankly, the only optimal approach is to appoint me as CEO, so whatever these guys said was moot anyway.
No I think you are confusing that with the RSS model where the sarsanghchalak leaves a chit naming his successor, when on his deathbed. I think they want the board to do that, not the CEO. The CEO will of course have a say because he is usually part of the board, but it won’t be entirely his decision. The CEO will then groom him of course. And it is discreet not discrete.
The heir apparent cannot be unseated by anyone else’s birth.
CEO, board same thing.
Typically, such discreetly formal dealings shall be brokerings in power, and might not be in the interests of shareholders (e.g. with Disney and Eisner) While “competition among insiders” shouldn’t be a fight to the death with clubs (actually why not?), but a more open competition among insiders is the way to go.
And it is discreet not discrete.
I meant discrete as in the non-continuous sense.
You know, a continuous grroming-the-next-CEO and
exiting thing VS a discrete out-the-next-day type thing.
/hehe…
Actually I have no opinion on whether a discreet selection process is better than an open competition. But I don’t think a CEO is ever elected by the shareholders directly. It is always the board that appoints him either way. Again, I have no opinion on whether this is a good thing.
Yup.
“Heir Presumptive” is someone like the younger brother of a childless king. Under primogeniture, the throne passes on to the firstborn, so if the king has a son, then his (i.e. the king’s) younger brother is no longer the heir. OTOH, “Heir Apparent” is someone whose claim to the throne is final, i.e. not subject to some other event not occurring.