The Hindu Business Line : India Inc lacks succession plan for top positions: Assocham

NEW DELHI: India Inc has a long way to go for putting in place a succession plan at the top level, which has a bearing on the market valuations of companies, confidence of the business associates and morale of their employees, an Assocham survey has said .

The Assocham Business Barometer (ABB) survey of 275 leading management consultants, corporate, academicians and professionals on 'Missing Link in Succession Plan' found that only select companies in India formulate and effectively implement such a plan f or key positions in the organisational structure.

This was confirmed by 75 per cent of the ABB respondents, who rated Indian companies at four on a scale of 10 in terms of grooming of successor to head a firm.

"Ninety-two per cent of those surveyed said a considerable weightage is being given to the companies, which have a hierarchy in place," the survey pointed out.

It said the leadership acts as a catalyst in building goodwill and brand valuation of an organisation. Such factors play a deciding role in determining the worth of a company on the bourses.

Eighty-nine of the management consultants and academicians said a well-placed succession plan is an important component of corporate governance. Non-existence of a second-in-command of a business entity could harm the interests of minority and widely dis persed shareholders as an element of uncertainty prevails, the survey said. - PTI

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