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We investigate whether new audit committee (AC) chairs provide more effective monitoring of the financial reporting process when they have firm-specific knowledge, proxied for by prior service on the firm’s AC. Consistent with practitioner and governance experts’ views on the importance of firm-specific knowledge, we find that firms are less likely to misstate their financial statements when new AC chairs previously served on the AC. This effect is stronger in the first two years of the AC chair’s succession period and when the incoming AC chair has more prior service on the AC. AC chair industry, accounting, and supervisory expertise, as well as prior experience as an AC chair at a different firm, do not compensate for a lack of firm-specific knowledge. These findings contribute to the literature on the AC chair’s role in the financial reporting process, suggesting that AC chair succession planning is important for financial reporting outcomes.

In Shakespeare’s play, King Lear, an aging ruler relinquished control to two of his three daughters. The succession failed miserably, destroying his family and destabilizing his kingdom. King Lear shows why few family businesses survive beyond three generations. Understanding Lear’s failure is crucial to avoiding Lear’s fate, whether the family business in question is a monarchy, a media empire, or a hardware store. The conventional wisdom is that Lear gave away his kingdom too soon and left himself vulnerable to predatory heirs. This has been referred to as the “King Lear Problem.” The conventional wisdom is wrong. Lear’s succession plan failed because he waited too long. Like Lear, those who control family businesses are often reluctant to step aside. For example, until he was well into his 90s, Sumner Redstone declared this his succession plan was to never die. The predictable consequence was litigation that engulfed the companies he controlled, including CBS and Viacom. Yet, despite its importance, the question of family-business succession has been neglected by legal scholars. Using King Lear as a framing device, this Article identifies obstacles to succession and shows how legislative initiatives, judicial intervention, and private ordering can facilitate the timely transfer of ownership and control across generations.

Succession planning (SP) and employee retention (ER) are mutually reinforcing. Meaning ineffective succession planning leads to turnover, and that would, in turn, make the succession plan ineffective. Hence the big challenge is to find how SP affects ER. For this, we proposed a model explaining the mediation effect of various factors on SP-ER nexus. We hypothesize that proper Succession planning produces a positive effect on Performance Goal Orientation, Supervisor Support, Working Environment, Rewards, Work-life Policies, Career Development, and Job Security. And these factors, in turn, lead to employee retention. We further assumed that the ER would lead to Organizational Effectiveness. To establish its empirical validity, we conducted a survey using a close-ended questionnaire. Data was gathered from 300 respondents who are serving in the middle and lower level of management in the private organizations in Pakistan. Data analysis was done through the descriptive statistics, partial least square (PLS), and Structural Equation Modeling (SEM) with the help of SmartPLS3. The findings indicated that effective succession planning practices had a meaningful, favorable connection with employee retention and out of seven mediators, only three mediators i.e. job security, rewards, and supervisor support significantly mediated the association between effective succession planning practices and employee retention. Succession planning also seems to significantly affect the working environment, work-life policies, and career development. Results also exhibited that there’s an insignificant link between effective succession planning practices and organizational effectiveness and also there is no positive relationship between employee retention and organizational effectiveness.

We present an economic analysis of the American Mafia’s organizational design elements that promote its survival. Over nearly one hundred years, Mafia crime syndicates adapted their task assignments, performance measures, rewards and punishments, and culture to constantly shifting external threats and opportunities. Consistent with Chandler (1962), the Mafia’s strategy, its structure, and managerial processes “fit” with one another. These organizational elements complemented each other and reigned in the greed and ruthlessness of the syndicate’s heinous personnel and channeled their self-interest to create high performance teams. The Mafia built a strong brand name and an enduring culture. They shunned short-termism and took the long view. The Mafia families had well-defined succession plans and dispute resolution techniques. They attracted and retained people who furthered the family’s nefarious interests while purging those damaging the family. Studying how mobsters chose their organizational design elements to fit its evolving strategy vividly illustrates the fundamental organizational economic principles lawful managers must follow to build successful organizations.

The purpose of this paper is to provide the growing range of literature review and offers a comprehensive review for new researchers with a specific focus on the relationship between knowledge management and succession planning at a higher education institution. This study will get a better idea of how higher education institutions deal with the danger of face the risk of knowledge loss due to long absence at the workplace. Most of the literature on succession planning was focused on healthcare and limited literature for the education sector. This paper is based on an extensive traditional literature review search of published articles that primarily address the concept of knowledge management and succession management. The study has categorized the literature representing knowledge management introduction, challenges facing by higher education for knowledge retaining, succession management, and linking relationship of knowledge management and succession planning. The changing role of the higher education system is all part of the globalization process. This study sets the global context which can help for new leadership processes in the higher education system. Today, higher education institutes are playing a big role to create university leaders. There are some challenges faced by knowledge management in terms of retaining leadership within the organization, which includes culture, knowledge retaining, technology, and directive leadership. This article approaches the topic of knowledge management in the context of succession management. The relationship between knowledge management and succession planning can improve the decision-making capabilities of academic leaders.

This paper studies the effects of connections between CEO candidates and board members on CEO succession decisions. CEO candidates’ prior connections with the hiring board increase their probability of being hired. These connections also affect post-succession firm performance. Connections reduce CEO labor market frictions and improve succession efficiency, especially in outside successions. They, however, distort director incentives and lead to inefficient succession decisions when internal governance is weak. Further, board connectedness to candidates can shape firms’ decisions to hire from the outside and reduce uncertainties. Overall, board connections provide information benefits but also raise agency concerns.

We find that optimal executive hiring decisions at the individual firm level can lead to reduced wealth for investors that hold a diversified portfolio of investments. We use a proven economic model to show costs are imposed on other firms in a portfolio when one firm hires externally. The model shows that the total unrecognized cost for a representative portfolio is about 0.5% per year of market value over the evaluation period. Empirical tests on this economic model, forced turnovers, and highly credentialed CEOs, along with a broad review of the literature, show no evidence that any of the imposed costs are materially mitigated by the value top executive external hires add at the firms they join. We provide recommendations for institutions seeking to reduce these previously unrecognized costs; our primary focus is on encouraging effective succession planning.

Developing the firm’s strategy was once seen as the most important task facing a CEO. Yet in the last twenty years, the practice of strategy has been relegated to a routinized function – part of the annual planning process, like performance management and succession planning reviews – necessary and useful, but neither vitally important nor the focus of CEO attention. Why has strategy lost its primacy and relevance? And can it recover its exalted position in C-suite discussions?

The overriding objective of any business family when undertaking succession planning is to ensure the smooth transition of wealth from one generation to the next, while maintaining family harmony and ensuring that the business survives the transition unscathed. The traditional approach of business succession and wealth transition planning, which focusses on a one time transactional process of transferring financial assets from one generation to the next in a tax efficient manner, often gets the timing and order of work wrong. Continuity planning is a long term, multidisciplinary process which starts with the human elements of the family. Researchers have identified the following four main causes of wealth transfer failures: 1. Lack of family mission and vision: 10%; 2. Breakdown of trust and communication within the family: 60%; 3. Failure to prepare heirs for roles and responsibilities: 25%; and 4. Professional errors in accounting, legal or financial advisory planning: less than 5%. Of note, less than 5% of succession plans that failed, failed due to professional negligence. Commonly implemented succession and wealth transition structures, which are primarily put in place to minimize or defer taxes and manage risk, result in a failed succession plan, not because of the structures themselves, but in spite of them. The technical skills of wealth transfer are certainly important and should in no way be diminished. That said, proficient legal and tax planning does not ensure a successful transition of wealth. Traditional succession planning only prepares the assets for the family. Continuity planning prepares the family for the assets. What follows is an overview of: 1. The nature of family business; 2. The main theoretical concepts of family business; 3. The unique importance of succession for family business; 4. The concept of transgenerational wealth; and 5. Continuity planning, its process and management.

Two decades ago, McKinsey advanced the idea that large U.S. companies are engaged in a “war for talent” and that to remain competitive they need to make a strategic effort to attract, retain, and develop the highest-performing executives. To understand the contribution of the human resources department to company strategy, we surveyed 85 CEOs and chief human resources officers at Fortune 1000 companies. In this Closer Look, we examine what these senior executives say about the contribution of HR to the strategic efforts and financial performance of their companies. We ask: • What role does HR play in the development of corporate strategy? • Does HR have an equal voice or is it junior to other members of the senior management team? • Do boards see HR and human capital as critical to corporate performance? • How do boards ascertain whether management has the right HR strategy? • How adept are companies at using data from HR systems to learn what programs work and why?

The paper is an attempt to develop ‘An Emotional Profile of Leader’ and identify the top 10 leadership competencies focusing the role of Emotional Intelligence in developing leadership competencies. This suggested framework may be instrumental in the processes of recruitment, training, succession planning, performance management and goal setting for an individual, and when used collectively it can be taken up at the organizational level. Since 1985, when Wayne coined the term ‘Emotional Intelligence’ the research work done on leadership has focusing on emotional intelligence. This paper reviews the history of these leader development programs as well as research on emotional and interpersonal competencies and suggests a profile may be instrumental in the processes of recruitment, training, succession planning, performance management and goal setting for an individual, and when used collectively it can be taken up at the organizational level. The proposed framework is based on ‘funnel approach’, from macro level to micro level. The CSF (Critical Success Factors) of an organization translate in the Key Performance Indicator for an individual and are to be assessed as the Key Result Areas of performance. The leadership competencies are broadly defined under four segments - Customer Orientation, Performance Management, People Development and Process Improvement. These four aspects of leadership competencies cut across the organization. While developing leaders for tomorrow, Emotional Maturity acts as a guideline for conducting oneself in the respective role, at organizational level, interpersonal level and for self development.

This paper analyzes changes in shareholder value and firm performance in relation to the delay (or lack thereof) in CEO succession. I find that, on average, delay in succession is associated with stronger performance after an unplanned CEO departure. However, the value effect of delay varies and not all firms benefit from long delay. Firms with higher stock price volatility and those whose CEO is hired away experience lower performance. These results suggest that delay affects frictions in the CEO labor market. The impact of delay is particularly important when firms have no succession plan in place.

The purpose of this Close Held Family Business (CHFB) case is to investigate the nature of conflicts that arise in a closely held family business. It also attempts to identify the key variables that must be fulfilled in order to ensure a smooth and successful transition from one generation to the next. The case necessitates why prevention, management and resolution of conflict is essential to carry on the bequest. The case also focuses on how succession planning is biased towards the male members of the family ignoring the capabilities and competence of females in the family. Unstructured interviews around multiple stakeholders in the family business identifying the core issues that lead to conflict in the family and organizational structure has been used. In order to reduce biases multiple sources or incumbents within the areas of conflicts were interviewed. It is observed that conflicts are inevitable within closely held family businesses, specifically when the ownership and management is in the hands of the founder manager. However, it is widely accepted that conflicts are paramount to forward progression both for the family and business when it is considered constructively. The case also highlights the negligence of female siblings in the family.The case reflects the importance of understanding the critical issues around family and business; family business together. The outcome is useful in relaying better understanding on dimensions of conflicts that plague family controlled business. However, generalization may not be plausible as this case refers to a small business in Indian context.Small businesses must relay importance of managing conflicts and bringing in earlier resolutions before they plague and destroy the entrepreneurial family based firm. The aftermath of not resolving such conflicts can be as catastrophic of destroying the family business and its wealth in the longer run.

Financial Planning is the process of channelizing one’s financial resources towards one’s financial priorities, with the aim of achieving them in most effective manner keeping uncertainties into consideration. The Sustainable Financial Planning is a comprehensive and holistic approach of managing the money available with the individuals while considering all important factors to attain stress-free and peaceful financial life. The Sustainable financial planning covers all the facets of financial planning, right from managing day-to-day expenses up to having a succession plan in place. It has been observed that from decades the financial literacy level has been very low in a country like India. Indians are always considered as great money savers, but not so great investors or planners. Current financial industry is driven more by various complex financial products and less unbiased financial advice. Hence, it becomes very difficult for an individual to take decisions without sound financial knowledge or at least a good advice. This paper studies the current need of sustainable financial planning advice to the individuals by examining the financial awareness and literacy levels with the help of personal interviews, questionnaire and other secondary data available from various sources.

We present causal evidence of an important yet less explored channel for board of directors to enhance firm value, namely by building, maintaining and disclosing a CEO succession plan. Using a new dataset of 9,084 CEOs and hand-collected information of succession plans, we exploit two regulatory changes and show that better corporate governance instigates firms to disclose succession plans, which causes significantly reduction in the volatility of stock returns, the entrenchment of incumbent CEOs, and the chances of hiring less-qualified successors. Firms with better governance earn positive abnormal returns around the announcement of regulations requesting for more disclosure of CEO succession plans. Firms disclosing succession plans have higher equity returns and experience positive abnormal returns when a new CEO is announced.

Shareholders pay considerable attention to the choice of executive selected as the new CEO whenever a change in leadership takes place. However, without an inside look at the leading candidates to assume the CEO role, it is difficult for shareholders to tell whether the board has made the correct choice. In this Closer Look, we examine CEO succession events among the largest 100 companies over a ten-year period to determine what happens to the executives who were not selected (i.e., the “succession losers”) and how they perform relative to those who were selected (the “succession winners”).We ask: Are the executives selected for the CEO role really better than those passed over? What are the implications for understanding the labor market for executive talent? Are differences in performance due to operating conditions or quality of available talent? Are boards better at identifying CEO talent than other research generally suggests?The Stanford Closer Look series is a collection of short case studies through which we explore topics, issues, and controversies in corporate governance and executive leadership. In each study, we take a targeted look at a specific issue that is relevant to the current debate on governance and explain why it is so important. Larcker and Tayan are co-authors of the books “Corporate Governance Matters” and “A Real Look at Real World Corporate Governance.”

In this paper, we examine how CEO succession and succession planning affect perceptions of financial reporting risk among stakeholders who are responsible for and oversee firms’ financial reporting (e.g., auditors, management, and audit committees). Management succession introduces uncertainty about firms’ future operations, financial policies, and potential motivation for earnings management, which we predict elevates the perceived risk of financial reporting improprieties. Consistent with this prediction, we find that audit fees are higher for firms with new CEOs. Importantly, however, we note that careful CEO succession planning (i.e., promoting an “heir apparent”) attenuates perceptions of higher risk as evidenced by a lack of an audit pricing adjustment. These results are robust to several alternative specifications and analyses designed to mitigate the concern that the association between audit fees and CEO succession and succession planning is driven by factors leading to the CEO change. We also show that audit fee increases dissipate over time as the new, non-heir CEO stays longer at the firm, reinforcing the inference that audit fees increase in response to the uncertainty surrounding a new CEO. Additionally, we do not find evidence of a deterioration in audit quality with new CEOs, independent of the succession plan.

Firms’ survival and longevity have recently emerged as a new intriguing theme of business history, spreading from the initial studies on family business to all forms of business. In family business the transition to the next generation can represent a strong limit to survival, as it depends on three different longevity factors: the family members’ involvement and commitment, the preparation of an adequate succession planning and the presence of a competitive advantage. Temporal continuity has become an independent topic involving all types of business, with respect to size, ownership and sectorial diversity. The goal of the analysis was to identify the determinants of longevity. The present research moves along this second line of investigation, focusing on small‐scale businesses and taking into consideration a case study. The small and medium‐scale (SME) system examined is that of Sesto San Giovanni, one of the most important Italian Company‐town during the 20th century, considered the ‘industrial district’ of Milan. The study first verifies the evolution of the local SMEs system, highlighting its development during the century. Having defined the context, the attention shifts to the temporal survival of local businesses and its determinants. Finally, the research includes the history of several enterprise experiences to illustrate the analysis’ results.

SKOLKOVO Wealth Transformation Centre has an ongoing research project to study Russian private capital and family business. Even though the history of private capital in Russia only goes back a few decades, issues concerning wealth succession are now taking on greater prominence. Succession issues are important not only for the families of wealth possessors, but also for the employees of their companies, service providers and society as a whole. Indeed, it is not a stretch to say that succession issues may directly impact the economic stability of the country. Our research report “Russia’s Wealth Possessors Study 2015,” aims to reveal the attitudes of Russian entrepreneurs and investors towards succession issues. The data obtained by the research group – from in-depth interviews with Russia’s wealth possessors – revealed insights about the personal characteristics of wealth possessors, various strategies for wealth transfer, the main challenges associated with wealth transfer in Russia, and key factors influencing wealth transfer decisions.

The changing trends have clearly indicated that the transformation of management from regular routine recruitment process to focus towards intangible capital management. In knowledge oriented society human capital is a strategic resource in attainment of competitive advantage. Talent Management by capacity development of the employees is striking for numerous reasons as it is the best remedy to achieve the entire organizational goal with few employees who are the key players and best performers. The workforce development is necessary for upcoming challenges like again economy being hit by recession, Talent Management by capacity development of the employees makes it more enhanced wherein the worker’s potential grows manifold.Capacity development is a process of change and it is about managing transformations. People's capacities and institutional capacity and a society’s capacity change over time. My research basically focuses on the capacity development of the employee’s aspect by observational research method. Talent management is basically constituent of five elements such as attracting, selecting, engaging, developing and retaining employees and it is generally concerned with identifying the talent gaps, succession planning, retaining talented employees by variety of initiatives as well as implementing different strategies.

Drawing from Weber’s charismatic routinization conceptualization, the paper seeks to underscore the need for a transactional leadership style (in place of a transformational leadership style) in family-run firms once routinization of charisma has set in. To prevent complacency and to redefine firm’s vision in keeping with the dynamic firm environment, a transactional leader would be better equipped in making the firm more innovative and instilling a competitive spirit among the followers. The paper is exploratory in nature and needs empirical validation for which some research questions have been listed towards the close of the paper. It is expected that family-run businesses will be better able to appreciate the need for a transactional leader to succeed after a series of transformational successors when loss of charisma is eroding their bottomline.

Innovative and creative organizations build capacity by extending “thinking outside of the box” to literally “breaking the box.” In an effort to select the most qualified personnel, these firms often strive to bridge workforce gaps by redefining competency. Through a scoping review of workplace skills, this paper leverages innovation theory by considering Schumpeter’s (1939) economic framework and Prahalad and Hamel’s (1990) competencies associated with the firm. This paper explores empirical studies that inform workplace innovation to respond to the review question, “How do skills and competencies help build innovator capabilities within the organization?” Findings suggest a relationship between innovator competencies, such as cognitive style, technical knowledge, managing change, creativity, and innovation, innovative capabilities. Implications for management include opportunities to build innovation as a competency to address succession planning needs. Future research should focus on quantifying innovator competencies that position organizations to build a more strategic and innovative workforce.

A clear strategy and implementation plan for reasonably foreseeable industry disasters--- before they take place, helps to prevent mistakes made under conditions of severe stress. Survival-threatening disasters such as the BP Gulf of Mexico oil spill or natural disasters such as hurricanes, fires, or the March 11, 2011 Japanese earthquake and tsunami, constitute any board’s worse nightmare. I have attempted to draw upon lessons from each of these disasters and explore how they may be applied more generally across all industries when crisis strikes. While effective risk management is perhaps the topic highest on every board's agenda, it is imperative that thought be given to crisis management and what a board might expect to confront when a corporate disaster strikes. This paper proceeds as follows. First, a few thoughts about contemporary threats are offered. Second, is an examination of the board of director’s responsibility in crisis. Third, is a discussion of the necessity of commitment at the top of every enterprise if progress is to be made toward crisis preparation, mitigation, and response. Fourth, an examination of several major corporate disasters is presented: the Japanese earthquake and tsunami of 2011; Deepwater Horizon drilling rig debacle; and General Motors ignition switch crisis. Fifth, a framework for analysis is offered, followed by some thoughts about what to do when crisis hits. Sixth, I discuss what to do in those situations where management is implicated, use of special committees of the board, and emergence of the role for special counsel. Workplace and data security issues are then discussed with emphasis on Toyota’s 2010 social media recall strategy, and the Target, Sony, and U.S. Office of Personnel Management data breaches. Next, the following enterprise nightmare scenarios are presented: supply chain disruptions; Foreign Corrupt Practices Act (FCPA) violations; internet failure, or data loss from virus or hacker attack; nationalization of assets; natural disasters; adverse political developments; pandemics such as the 2014-15 ebola scare; prolonged power disruption; strikes and labor actions; and war. Succession planning is the next topic discussed having corporate crisis implications. And last, I conclude.

Many believe that the selection of the CEO is the single most important decision that a board of directors can make. In recent years, several high profile transitions at major corporations have cast a spotlight on succession and called into question the reliability of the process that companies use to identify and develop future leaders. In this Closer Look, we examine seven common myths relating to CEO succession. These myths include the beliefs that:1. Companies Know Who the Next CEO Will Be2. There is One Best Model for Succession3. The CEO Should Pick a Successor4. Succession is Primarily a “Risk Management” Exercise5. Boards Know How to Evaluate CEO Talent6. Boards Prefer Internal Candidates 7. Boards Want a Female or Minority CEOWe examine each of these myths and explain why they do not always hold true. We ask:• Why aren’t more companies prepared for a change at the top?• Would directors make better hiring decisions if they had better knowledge of the senior management team?• Would they be more likely to hire a CEO from within?• Would they be more likely to hire a female or minority candidate?• How many succession should a director participate in before he or she is considered “qualified” to lead one?Topics, Issues and Controversies in Corporate Governance. The Closer Look series is a collection of short case studies through which we explore topics, issues, and controversies in corporate governance. In each study, we take a targeted look at a specific issue that is relevant to the current debate on governance and explain why it is so important. Larcker and Tayan are co-authors of the books Corporate Governance Matters and A Real Look at Real World Corporate Governance.

The current model in corporate governance theory is predicated on management by CEO and a team of executives, with directors in charge of oversight and monitoring. Corporate law endorses this model by authorizing directors to supervise management, rather than manage corporations by themselves. This article surveys board oversight at Nortel Networks, the failed Canadian technology giant, to assess the adequacy of the prescription about monitoring in governance theory. The hypothesis about boards and their functions are evaluated with reference to the following events at Nortel: Churn in CEOs and succession planning; Business acquisitions strategy; Accounting restatements and investigation; Business oversight and bankruptcy filing.Insufficient attention to board engagement with business and strategy is identified as a shortcoming in current theory. Boards would be the last line of defence in troubled companies. The Nortel experience suggests that boards that are mostly independent and the bare monitoring function might not be adequate as universal principles, particularly in troubled, under-performing companies. The issue with independent directors and their function as monitors would be especially acute in a corporation facing leadership instability and business challenges, and is in need of re-strategizing for the medium and long term. Situations of this nature illustrate how boards can better serve corporations and their stakeholders through greater engagement with business strategy and being more proactive as necessary.The article proposes the creation of a new board committee to deal with business and strategy. This committee will constantly monitor the business of the corporate enterprise and participate in strategy development. By doing so, boards can contribute to assuring a profitable enterprise that is commercially sound and sustainable. The proposal is based on the current system of board committees and it addresses board responsibility for business and strategy – an issue that receives limited attention in the prevailing framework.

This paper contains the coding protocol for the paper "Diffusion of Regulatory Innovations: The Case of Corporate Governance Codes". The provisions of 106 corporate governance codes from 23 jurisdictions are analysed and coded along six dimensions: (1) the proportion of non-executive to executive directors on the board; (2) the number of independent directors; (3) the definition of independence; (4) the separation of the two central roles on the board, that of chairman and CEO; (5) the period of time the CEO has to wait after the end of their tenure before becoming chairman of the board (“cooling-off period”); and (6) the delegation of sensitive issues involving particularly pronounced conflicts of interest to independent committees, namely succession planning, responsibility for the review of internal control procedures and the appointment of the external auditor, and remuneration decisions.The paper "Diffusion of Regulatory Innovations: The Case of Corporate Governance Codes" to which these Appendices apply is available at the following URL: http://ssrn.com/abstract=2346673

Family business is considered to be the oldest form of an enterprise, existing globally. Family is emotions and business is economics. There are some possibilities that some family members may not be the owners but then they must be involved in the operations of the family business. Family businesses are taken care of by generations to generations. The best may combine values, ethics, dedication and discrete potential of each family member. The worst is when hostile family members have to work together, where self-interest is first. The case becomes challenging when the business transfers from generation to generation for example Tata, Bajaj, GVK, Birla, Hero, Wipro, Reliance group etc etc. Similar to large family businesses, even smaller family firms like Microlit, DK Exports, Metal Seam, PAL etc based at Lucknow, capital of state of Uttar Pradesh, India, exhibit typical characteristics within a family owned and family run business.A closely held family business is a business where one or more members within a family are owners of the business. In a closely held family business, the owners are the members of one family only. The decisions are taken by the owners but the operations of the business may involve the outsiders such as manager, staff, etc. The linkage between the family and business has a mutual influence on the firm’s working and on its objectives and interest of the family.Conflicts are very obvious phenomenon within family businesses. They are endogenous by nature. In family business, conflicts arise when there is a disagreement on certain decisions such as succession planning, personality differences, differences in interests, in laws, etc. Conflict is inevitable in any business and often it is constructive. Conflict management is the process of limiting the negative aspects of conflict, while increasing the positive aspect of it.Conflicts can be resolved either by self or by the concern of others. Conflict resolution is necessary for any family business to leverage growth and sustainability. At times, unsolved conflicts in a family business are not professional conflicts rather they become personal conflicts leading to bigger unresolved issues such as personal issues within the family members, loss in business, finally leading to closure of family business, etc.Family business is a business governed and/or managed with the intention to shape and pursue the vision of the business held by the dominant coalition controlled by members of the same family or a small number of families in a manner that is potentially sustainable across generations of the family or families (Chua, Chrisman & Sharma, 1999). Rosenblatt, et al (1985, pp.4) define a family business as any business in which majority ownership or control lies within a single family and in which two or more family members are or at some time were directly involved in the business.There are 3 overlapping systems in a family business: the family, the business and the ownership/governance systems (Federer, 2012). To lead a family business successfully, it mandates managing the different systems of the family and business. Balancing the family business interests and the business interests is of paramount importance. Thus conflict management is must.

There is widespread concern that corporate boards do not sufficiently punish chief executive officers (CEOs) for poor performance. Board effectiveness in ousting CEOs may be affected by chief executives who also chair the board or influence the succession planning process. This article explores how chair independence and succession planning influence CEO turnover. I address endogeneity issues using a trinomial probit regression system of CEO turnover that models chair independence and succession planning endogenously. I find that succession planning has a larger positive effect on CEO turnover than suggested by previous research. I also find that chair independence actually reduces the probability of succession planning because it creates a friction with the common relay succession model. There is a negative overall effect of chair independence on CEO turnover.

Objectives - This exploratory study draws attention to "sibling" as opposed to the traditional familial orientations that have pervaded the discourse in family business research. The paper poses three key questions revolving around the current trend in family business research: (i) how does sibling rivalry enhance our understanding of the dynamics of family business? (ii) Is sibling rivalry a building or stumbling block in copreneurship? (iii) What lessons can be learnt for the future direction of family business research?Prior work - Family business research has been predominantly skewed towards succession planning discourse with trajectories enunciating succession from either Father to Daughter (e.g. the Hiltons, Osbornes, Sumner & Shari Redstone); or Father to Son e.g. Rupert & James Murdoch, Lakshmi & Aditya Mittal. Not much consideration has been given to sibling family business let alone rivalry in such businesses.Approach - The study is conceptual, based on a qualitative enquiry drawing upon case illustrations of "copreneurship" amongst siblings (i.e. brothers, sisters or a combination of these). This is also backed by additional insight from a CNBC profiling of "famous family business feuds."Results - Entrepreneurship is fast-transcending the familiar family business orientations towards "sibling" collaborations and/or rivalries as in the case of Indian giants (such as the Tata brothers; Ambanis, and Hinduja brothers etc) and Arab conglomerates (e.g. the Arab world siblings such as the Al Futtaim brothers in the UAE).Implications - While most of the examples outlined in this study are based on sibling rivalry and/or collaboration, from notable family businesses with a South Asia pedigree, there are still implications for future research into the subject of family business. For example, a comparative study of sibling copreneurship versus couple (husband and wife) copreneurship may yet reveal some unanticipated results that would enhance the development of family business research.Value - This exploratory study provides a pioneering attempt to establish whether success or failure of sibling business differs from what is arguably the status quo in family business research - i.e. instances of succession. As a consequence, the study provides fresh insights into potential "new realities" confronting family business research taken from the purview of the concept of "sibling rivalry."

The study primarily aimed to provide a framework through benchmarking on existing early retirement programs (ERPs) for the hotel industry in the Philippines. To answer the objectives of this study, the researcher used a combination of descriptive and quantitative research as research designs. The research was conducted only within the Metro Manila area where most of the de luxe class hotels are located. The target subjects of the study are the de luxe class hotels. The choice of samples for the respondents is based on their knowledge level about the subject matter and the accessibility of the available personnel in the target samples. As per overall response of the key informants of this study, the implementation of the Management Initiated Early Retirement Program (MI-ERP) is at its strongest in terms of eligibility criteria while the implementation of the MI-ERP is at its weakest in terms of program offerings. Moreover, the hindrance in the implementation of the MI-ERP is at its strongest in terms of employees’ attitude. Evidence reveals that the implemented best practices in terms of early retirement date & processes, program offerings, and administration of the retirement plan have a significant relationship with the problems encountered in the implementation of the MI-ERP in terms of employees’ attitude. After consideration of all the findings of this study, the researcher proposes a spectrum of conditions of practices governing the management initiated early retirement program (MI-ERP). In case hotels will put up a management initiated early retirement program (MI-ERP), the spectrum will be useful in correctly positioning their ERPs. Analysis of the spectrum further indicates a chance of higher probability of availment of targeted employees whenever a company applies a higher spectrum. Finally, the researcher made the following conclusions:1. There is lack of set of guidelines in place for the implementation of the best practices of the MI-ERP. 2. Years of service is the best criteria for eligibility in order to create a broad range of targeted employees. Critical factors which should be emphasized for further improvement involve: careful succession planning with a well-crafted succession plan in place; career counseling to encourage low performers to accept and the high performers to decline; swift processing of the retirement benefits; and capacity to offer the MI-ERP all year round. In terms of program offerings, the same must not only involve monetary (lump sum benefits, healthcare benefits, insurance) but also non-monetary benefits (e.g. send-off gatherings and outplacement seminars). Legitimacy, support, financing and governance are factors for successful implementation. 3. Employees’ attitudes of the targeted population are critical factors that hinder implementation of the best practices of the MI-ERP. Since financial factors are not problems for the implementation of the MI-ERP, employers of the hotel industry are financially capable of allocating a budget for the improvement in the implementation of the MI-ERP. 4. Employees’ attitude can cause a potential problem in the implementation of the best practices of the MI-ERP in terms of early retirement date & process, program offerings, and administration of the retirement plan. This means that employees’ attitude will be a triggering factor for the successful or unsuccessful implementation of the MI-ERP in terms of early retirement date & process, program offerings, and administration of the retirement plan. In this regard, money can be an extrinsic motivator for influencing employees’ attitude. 5. Any hotel organization can develop its own MI-ERP for its employees and the quality of the program may depend on a spectrum of choices based on eligibility criteria, early retirement date & process, program offerings and administration of the retirement plan. Oftentimes, the best practice spectrum may entail investment and fund appropriation, but would result to the ultimate success of the program. On the other hand, the poorly managed MI-ERP would always face numerous challenges such as delays in release of retirement funds to beneficiaries, non-availment of targeted low performers, and others resulting in an overall failure of the program.

Human resource planning is an important aspect of human resources management that combines three important activities: identifying and acquiring the right number of people with the proper skills, motivating them to achieve high performance and creating interactive links between business objectives and people planning activities (Mills, 2003). A cross sectional survey research design was employed to determine human resource planning practices in faith based hospitals in Kenya. The findings indicated that in order to address the staffing gaps and ongoing workforce shortages in the health sector and faith based hospitals, there was need to deliberately focus on sound human resource practices as health workers are a key human resource required to save lives. Without proper planning of this key resource, our health care systems will deteriote and this may cause great losses to the Kenyan economy as quality health care is a key goal in the Kenya Vision 2030, Millennium development Goals and other national priorities. Faith based hospitals therefore need to continue to enhance human resource planning practices.

CEO Succession Practices: 2012 Edition documents and analyzes succession events of chief executive officers (CEOs) of SP Part II-CEO Succession Practices (2011): Includes two sections, “Board Practices in CEO Succession Planning” and “Communication Practices in CEO Succession”; Part III-Notable Cases of CEO Succession (2011): Summaries of 10 episodes of CEO succession that made headlines in 2011 (Advanced Micro Devices; The AES Corporation; Apple; First Solar; Gannett Co.; Hewlett-Packard; HR Newell Rubbermaid; PGE and Yahoo); Part IV-Shareholder Activism on CEO Succession Planning (2011): Discusses a critical policy reversal by the U.S. Securities and Exchange Commission on the excludability of shareholder proposals in CEO succession policies (Hewlett-Packard; Kohl's; News Corp; Red Robin Gourmet Burgers; United Natural Foods).Concluding the report is an appendix of The Conference Board Roadmap to CEO Succession Planning, which outlines a series of steps intended to help directors organize succession planning, integrate it with existing board responsibilities, make it transparent to all stakeholders, and ultimately define it as an ongoing element of business strategy.

Professor Gary Becker, University of Chicago, Graduate School of Business (“GSB”) and winner of the 1992 Nobel Prize in Economics stated in GSB Magazine, February 2008, “Businesses now appreciate the fact that, by far, their most important assets are their employees, and how they invest in their employees, how they treat their employees, how they raise the skill level of their employees are the dominant factors that determines whether they are going to succeed.” Transnational Security, Ltd (“Company” or “TSL”) is a global security company doing business in North America, Europe, Asia-Pacific (“APAC”) and the Middle East. TSL headquarters in Toronto, Canada and is experiencing difficulties implementing a global Human Resource Manager (“HRM”) strategy. As the senior consultant at Thani’s Global Consulting (“TGC”) I have outlined below a systematic approach for TSL to best overcome multicultural management difficulties, as this is the core deficiency for the Company. This research paper will:1) Outline the key historic changes that have led to the current employment situation. 2) Discuss the groups making up the current workforce and the ramifications for the Company.3) Outline how to create an assessment program to quantify the skill sets and deficits of current workers.4) Discuss the creation of an overall talent management program, from recruitment to succession planning.

HR transformation is a process of realigning an HR function to the strategy and goals of the organization so that HR can become a true partner in success. The goal of HR transformation is not simply to improve the efficiency of processes within the HR function, but to improve the function‟s effectiveness. It addresses all elements of the HR organization, including how it is structured, how people are deployed, how technology is used, how processes are designed and how services are delivered. "Human capital" is sometimes used synonymously with human resources, although human capital typically refers to a more narrow view; i.e., the knowledge the individuals embody and can contribute to an organization. Likewise, other terms sometimes used include "manpower", "talent", "labor" or simply "people". HR is a product of the human relations movement of the early 20th century, when researchers began documenting ways of creating business value through the strategic management of the workforce. The function was initially dominated by transactional work such as payroll and benefits administration, but due to globalization, company consolidation, technological advancement, and further research, HR now focuses on strategic initiatives like mergers and acquisitions, talent management, succession planning, industrial and labor relations, and diversity and inclusion.

Contrary to popular belief, succession planning is not a new phenomenon. Companies have been wrestling with ways to identify, develop and retain their talent for decades. So why is succession planning suddenly popping up on every company’s radar screen? Today’s organizations are facing higher demands in a global market with the retirement of baby boomers and the widening talent gap. The home-grown and paper based succession planning is no longer meeting the needs of today’s workforce. Companies need to upgrade and redefine their succession planning initiatives to ensure that their process will benefit both the individual and the over all strategy of the company. This case study will help you: Identify and develop sources of information used for executive selection; Learn the various factors that must be taken into account in designing an executive job; Identify how organizations gain a sustainable competitive advantage through human capital strategies; and Identify the frame work for planning and scoping a project for a client.

The environment of competition in all the fields of life has made demands for more number of successful managers in organizations. In this article an empirical attempt has been made to establish some of the antecedents as the background factors for attaining managerial success. A questionnaire comprised over 30 items were administered on the 280 working managers at various levels in different organizations located in Punjab, Pakistan. Confirmatory factor analysis (CFA) was applied and a structural model was developed on the antecedents of managerial success. The results of hypotheses testing were in expected direction and all the studied antecedents had significant impacts on managerial success. The top management of the organizations can comprehend the basic individual characteristics, demographic background, various contextual factors, and the importance of achieving organizational results that make the managers professionally successful. It has got implications in areas related to selection, training and development, performance appraisal, and succession planning of managerial personnel in organizations. The present study has explored only a few antecedents of managerial success, and did not consider the other important factors like salary and status, cognitive ability, and job performance. Through identifying and empirically establishing a few selected antecedents of managerial success, this study helps to understand the contributory attributes of managerial success in Pakistani context.

Resource dependency theory is one of the two resource based perspectives in Strategic management which have contributed significantly to its literature. It explains the impact of environment on a firm in terms of resources and how firms can use tactics to manage this impact. This perspective has always looked at organisation or firms as the unit of analysis, maintained an external perspective and therefore tried to fathom the inter-organisational actions of a firm in terms of mergers, acquisitions, vertical integration, board interlocks and succession planning. However, this perspective faces the problem of poor empirical support and inappropriate operationalisation of its key concept. This paper takes the view that this perspective has been plagued by the field’s reluctance to go for processual research and emphasize research on implementation. This has led to use of cross sectional studies, non use of intervening outcome variables and poor linkage of the key concept of resource to its utility. The key question the field needs to answer is how do the qualities of resource make it valuable and therefore confer power or necessitate the control of such a resource. This paper takes a Penrosian view that all resources are bundles of services. It proposes that VRIN like qualities of a resource stem from the utility it serves and the criticality of such a utility. This defines the degree of dependence, a firm will experience and therefore the firm actions are towards the management of such a dependency. It treats Power and dependencies as distinct concepts and links them by defining Power as the exercise of influence to leverage control over Critical resources for the advantage of parent firm in an exchange. It also states that management of dependencies need not always involve use of power. Thus it rejuvenates the resource dependency perspective by linking it to implementation and takes an internal perspective of a firm. It thus extends the concept of resource dependency to implementation, actions which need not involve exercise of power.

Once reserved for the upper echelons of senior management, and often viewed - erroneously so - as replacement planning to mitigate risk (e.g., a catastrophe befalls company leaders), today's succession planning is being redefined. The discipline has broadened in both breadth and scope to become a central component of strategic human capital management (HCM). Defined as the process of identifying, preparing, and tracking high potential employees for promotion and advancement, several dynamics are driving the evolution of succession planning today.

Research shows that an engaged workforce impacts business performance, and ultimately, shareholder value. Companies with more engaged employees have better financial performance, higher customer satisfaction, higher employee retention and more productive employees. Companies with higher percentages of engaged employees perform better than their industry peers. Download the whitepaper to find out how.

The accounting profession has attracted students for decades and copious studies have been conducted on the topic of career choice and the factors that influence the decision to pursue a career in the field of accounting. All firms across industries need accountants whether on staff or partially outsourced, and each firm is faced with the challenging task of recruitment, retention, and succession planning of accountants. The task encompasses finding the right candidate for the job, with proper qualification and motivation who can support the long-term growth and prosperity of the firm. Educational institutions are challenged in enrolling, and retaining students who choose the major and a career in accounting however a rather high attrition rate concerns all stakeholders. While many students complete their degree and continue their career in accounting, others choose otherwise. This study investigates the determining factors that influence a student to pursue a study and a career in accounting seen from different angles: from the accounting students’ point of view, from the practitioners in the field, and from the educators’ perspective. The results offer the stakeholders a fresh view by taking into consideration all environmental factors both intrinsic and extrinsic that influence a person in the decision making whether to pursue a career in accounting. Not surprisingly monetary reward is not the top influential factor instead: career advancement opportunity, prestige, fulfillment of psychological needs, social status, job security, higher earning potential, low variability of income ease of access to job opportunity, choice to work for large or small companies, job are available across industries and in desired geographic location are among the chief factors that have a significant influence in the career choice of a student pursuing a career in accounting. The results of the study will benefit all stakeholders in the recruitment, retention, and succession planning strategy of accountants.

Succession planning systems manage business risk and ensure leadership and critical role continuity across all levels of an organization. This field guide will explore five critical steps to ensure that you get the most out of your succession planning investments.

The 2011 Chairmanship report published by Yale’s Millstein Center for Corporate Governance and Performance examines the question of how the non-executive Chair and the CEO, both important roles in the corporate governance, can work together effectively toward the corporate best interest. Based on interviews with dozens of CEOs, non-executive Chairs, and stakeholders, the report paints a picture of how the effective relationship works.The report identifies three major areas that characterize an effective working relationship: chemistry, a clear framework, and a supportive context. Most commonly mentioned in interviews was good Chair-CEO chemistry – that is, the direct interpersonal relationship between the two. Expanding on the chemistry concept, Chairs and CEOs identified effective communications as underlying factor. Effective communications included frequent contact, open, ongoing dialogue, and a mix of formal and informal venues. Also supporting good chemistry was reciprocity and consideration – keeping each other well informed, avoiding surprises, and assuming good intent.Communications should be purposeful – and while the relationship might be close, it should not become a personal friendship. Chairs and CEOs alike felt their good communications created an overall environment conducive to sharing, learning, and confidence.Other areas, such as a clear framework and a supportive context were also identified. A clear framework also meant having the right processes, usually around key areas of board responsibilities such as managing the board agenda, material financial decisions, major transactions such as acquisitions, compensation, C-suite personnel, and succession planning. Three elements of board context also effected the Chair-CEO relationship – a talented executive team, a strong supportive board and a culture of transparency promoted an effective working relationship between the Chair and CEO.As this leadership structure becomes more prevalent, these insights and guidelines should be useful to those working together in these interdependent roles. Effective working Chair-CEO relationships may create value for shareholders in ways that neither leader could do alone.

The global financial crisis has prompted debate once again on how to improve the effectiveness of the board of directors at listed companies. Despite considerable reforms over the past two decades, boards – particularly at financial institutions – have been criticized recently for failing to properly guide strategy, oversee risk management, structure executive pay, manage succession planning, and carry out other essential tasks.This article argues that the lack of attention to behavioral and functional considerations – such as director mindset, board operating context, and evolving human dynamics – has hampered the board’s effectiveness.To reach their potential, the article recommends that – alongside establishing core building blocks such as appropriate board size, well-functioning committees, proficient company secretarial support, and professionally-administered board evaluation – boards and their members focus on the following:1. Think like an owner – as boards represent the interests of owners, directors should adopt an ownership mindset. However, non-executive directors, while generally hard-working and earnest, often have a limited conception of their roles. An ownership mindset can be instilled by, among other things, recruiting directors who exhibit energy, a proactive attitude, and an independent mind, involving them meaningfully in substantive board work, strengthening their emotional bonds to the company, and employing long-term financial tools.2. Know their companies – for a board to add value, individual directors must possess a strong understanding of the company and its industry. However, getting outside directors to be functional is challenging in practice. Boards can build in-depth knowledge and expertise by, among other things, emphasizing interactive, experiential modes of information acquisition, inviting "dissenting" opinions from the outside, and ensuring that a meaningful proportion of non-executive directors possess sector expertise.3. Be prepared to “roll up their sleeves” – there is broad acceptance that listed company boards should operate on the basis of “noses in, fingers out.” However, to properly discharge their stewardship responsibilities, boards must engage intensively in such critical areas as strategy development and risk management. On matters where management faces severe conflicts of interest, such as CEO succession planning and executive remuneration, boards must "roll up their sleeves" and drive the work.4. Take charge of their priorities – the board’s responsibilities have broadened over the years, including following the global financial crisis. As most boards still meet only 8-10 times a year, they need to prioritize their activities and manage their time efficiently. Because the board and management may not always hold the same view on priority issues, boards should decide their top priorities rather than rely solely on management to determine the board's agenda. Operationally, boards should limit the time spent on routine and "backward-looking" matters and ensure they are not rushed on important decisions.5. Hire a collaborative CEO – boards are highly reliant on management to provide them with information on the company and must therefore ensure a collaborative CEO is in place. This can be accomplished by looking for collaborative traits when selecting a new CEO, incorporating collaboration with the board into the CEO’s job description, and providing regular feedback. In turn, boards can enhance management's willingness to cooperate by demonstrating an ability to add value and not micro-managing the executive team.6. Protect their authority and independence – to be effective, the board must possess adequate authority and independence from management. However, board authority ebbs and flows and independence of mind is likely to erode over time. Boards can protect their standing and objectivity by separating the roles of chairman and CEO, keeping on top of succession planning and leadership development, paying attention to the relative status of people in the boardroom, and putting in place term limits for directors and the CEO.Note: Condensed versions of this article have been published in the McKinsey Quarterly (available at http://ssrn.com/abstract=1872324) and Butterworths Journal of International Banking and Financial Law (available at http://ssrn.com/abstract=1886004).

In this paper, I develop a search-matching model which predicts that new CEOs who are better matches to the firms will stay longer, perform better, and require less initial compensation. Using comprehensive EXECUCOMP dataset merged with unique data on CEO succession plans, I find significant benefits to firms that adopt a CEO succession plan: insider successors in such firms have 1) 30% lower hazard rate of early turnover, 2) 10% higher productivity of effort, and 3) $1,000,000 less initial compensation. I also find that more independent boards (measured by the percentage of outside directors) and boards with larger social networks (measured by the average outside directorships of each director) pick CEOs with higher match qualities. All the findings suggest that the time boards spend on screening candidates and the size of boards’ social network play a role in CEO succession. My results also provide support and policy implications for a legal notice from SEC, dated October 27th 2009, which signaled increased concern about CEO succession planning among corporate boards and for the first time allows shareholders to request more disclosure from companies’ CEO succession plans.

Prosperity and welfare of a country depends on the efficiency and effectiveness of the economic activities of the economic units of all sizes and microeconomic objectives. Scholars from the West and the East have long suggested ways to improve the efficiency and effectiveness of an organization. It is unanimously agreed by all scholars that leadership of the organization plays a critical role besides better management practices in determining the efficiency of all the human resources and thereby the other resources and ultimately that of the whole organization. Also it has been widely believed in India that works such as the Mahabharata and Ramayana, as a single big case themselves, deals with many problems of various types and prescribes guidelines thereof. It is also generally believed that the case method of teaching and learning was pioneered by the Harvard Law School and popularized by the Harvard Business School. However it is common knowledge in India that Ramayana and Mahabharata, Panchatantra, etc has pioneered the case method of teaching and learning thousands of years before the recent rediscovery of the case method. This paper attempts to analyze only a part or module of the case of Ramayana for its varied implications (including legal issues, succession issues, conflicts, manipulation by the top-management, etc.) prescribing leaders and managers for their organizational excellence in the modern times. These implications seem to be not only consistent with the modern concepts but also very relevant even today!

This study investigates the relationship between retirement planning and succession planning in the family businesses in India across gender. Data was collected from 80 i.e. 40 female and 40 male CEOs of small and medium sized family businesses in India with help of a structured self administered questionnaire. Confirmatory factor analysis (CFA) in LISREL (8.70) was done to check the validity of the scale. Results of the study strongly suggest that though there were certain visible differences across gender, succession planning in Indian family businesses is typically an unplanned affair. The relationship between succession planning and retirement planning varies across gender. Therefore, indicating that the dimensions of strategy planning and implementation need to change according to gender. The results of the study highlight the patriarchal nature of the Indian family businesses even the ones run by female CEOs. The results indicated that top ranking dimension across gender for CEOs is relationship with family after retirement but the rating across the dimensions changes between male and female CEOs. The results indicated that the planning for retirement needs was unique across gender in Indian Family Businesses. Analysis highlighted that there was significant difference in the variables of retirement which influenced succession planning across gender. In case of males succession planning was strongly correlated to retiree well being and development, continuity and viability of the enterprise and ownership and succession planning. While for females it was strongly correlated to one variable i.e. ownership and succession planning. Regression analysis indicated that for males well being dimension of retirement influences succession planning most strongly i.e. increasing well being one unit will increase chances of successful succession planning by 8.223. As for females results indicated that ownership dimension of retirement influenced succession planning strongly i.e. increasing ownership by one unit will increase chances of successful succession planning by 3.513. Because of different problems faced by genders in running their businesses Indian female entrepreneurs were found to be more concerned about ownership transfer of their enterprise than other variables of their retired life. The study will help the family business owner/managers, advisors, consultants and/or researchers in developing a proactive succession planning strategy formulation and implementation. The research will also contributes to the growing body of knowledge establishing links between the retirement and succession planning.