A key message for any family business can be taken from this piece examining the need for the board to be given a voice in the succession process.
In the context of some of the largest firms in India, it can be seen that a process is undertaken but there is not total commitment and there are cases where the current leader continues apace with selecting a succession without the involvement of the board at all.
Family firms the world over bring in non-family executives to strengthen the business and many are left in difficult positions without any real power or responsibility due to the actions of individuals.
For succession to work, there needs to be clear buy-in to a process from all those involved, the board need to have a say and be prepared to speak, and the family need to take on board the process and the views of all concerned.
As this piece from India highlights, the days of 'hero worship' need to be left behind and the right successor needs to be found to take the (family) business forward. As we all appreciate, the skills of the next generation to run the business will be different from those of their predecessors too, something else that needs to be factored into the succession process.
It’s not just Ratan Tata’s return as chief at Tata Sons that should have India Inc pondering about succession planning; both tobacco-to-hospitality giant ITC, and engineering major Larsen and Toubro will welcome the next generation of top leaders some months from now. ITC Chairman YC Deveshwar will be 70 in February, while L&T group Executive Chairman AM Naik turns 75 in June. Like Tata, these two executives have also assumed larger-than-life personas and are synonymous with their companies. Their successors are definitely not going to find it easy. “The weakest link in succession planning in India is the board. If they are not strong enough to voice their opinions, it will remain a one-man show,” says Pankaj Dutta, Managing Partner of Alexander Hughes’ India operations.