Evan Davis on... Successful successions

Eye off the ball? An executive moves on to the golf course

Choosing how to choose

The shape of your business may influence if your plans build on instinct or analysis.

The Bottom Line presenter Evan Davis has a scheme that could help ensure departing managers keep their minds on securing a successful succession.

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Planning the succession in a company, the change from one chief executive to the next is never terribly easy. In fact, it isn’t easy in any organisation or political party or nation.

Well here’s a suggestion as to why that might be the case: A chief executive never really has an incentive to think about the interests of the person replacing them.

They may be paid by results but the results they’re paid by stop when they leave the company.

So here’s my thought: if you want chief executives to think about how the company is going to do after they leave, and if you don’t want chief executives to stay as long as they possibly can in post, you have to pay them by results beyond the time at which they depart.

That way they will then start thinking about their successor’s interests as well as their own, and then they will really want to make sure they’ve got someone to hand over to.

That's my thought. You can join the debate with The Open University.