Recession has 'downgraded' internal succession priority

The recession has contributed to a decline in internal succession planning, according to a business consultant.

Ron Bush, principal at Brightwork Partners, explained that companies looking for a new chief executive tend to hire from within when times are good as senior executives have often earned the right to promotion.

However, Mr Bush claims that this trend is drastically altered during periods of financial uncertainty.

Speaking to the Financial Times, he said: "It's a completely different scenario when the company is under severe stress or has recently gone through a troubling time."

Mr Bush added that under normal circumstances, chief executives of organisations are expected to prioritise succession planning strategies, but that this concern can be lost when companies are struggling to gather revenues of maintain their market position.

Earlier this year, the Investment Management Association suggested that a transparent succession plan should be included in the Combined Code on Corporate Governance.