Succession planning is crucial for the success of a company. Selecting the right successor is one of the important responsibilities of an incumbent CEO. This article explains some of the fundamental aspects of succession planning.

Charles Prince, a lawyer by trade, has run Citigroup's investment-banking operations. His appointment as the CEO is believed to be a part of the company's efforts to clean up Citigroup's image after scandals in . This succession is widely perceived to be an under the table affair, than a straightforward succession. Robert Willumstad, head of Citigroup's consumer operations, had been the most experienced internal candidate for the job. Expected reorganization at Citigroup will inevitably end up in Willumstad running most main business lines at Citigroup. Think once what will be the repercussions? Prince's positional power and Willumstad's real power might collide. Where will this end? With what consequences?

Succession is a concern in many of the Asian publicly traded companies as well. They are in majority cases controlled by a single shareholder, often the founder. This is one reason why in many Asian corporations the organizational structures differentiate much between ownership and control. Professional managements are accountable to the board in only a few cases, and many family members hold senior managerial positions without having either the ability or the motivation to increase shareholder value.

No surprise then, the best of Asian organizations are brimming with aged CEOs. These are often family run, and the founders are in their 70s and 80s. Though some of their children have business degrees from US B-schools they are hardly groomed to takeover the mantle. The result: Investors, business partners, and employees continue to be paranoid about the future of such organizations.

Succession planning, incumbent CEO, fundamental aspects, Charles Prince, Citigroup's investment-banking operations, Wall Street, straightforward succession, consumer operations, Expected reorganization, business lines, repercussions, consequences, traded companies, shareholder, Asian corporations, organizational structures, ownership and control, Professional managements, Investors, business partners.