Three criteria to succeed: Talent, talent, talent

N R Narayana Murthy deserves credit for his admission that he was 'completely wrong' in not allowing Infosys' founders' children to take up active roles in the company he co-founded. He said that the move, had it been allowed, would have eased the succession process. It turns the spotlight on the leadership and succession planning challenges faced by Indian promoters. The predominant view that professional managers are somehow more successful than family members in running a business is misplaced. Likewise, the notion that letting family members take up top jobs may degrade the level of commitment and the sense of ownership among employees and lead to higher attrition rates is baseless. Of course, no undeserving candidate should be inducted in an organisation simply because of family ties. Talent should not be barred just because of genes, but checks must be in place that weed out any nepotism.

Competency holds the key for hiring the best talent that offers itself to fill top positions. This is where sound methods of selection by an independent board count. Candidates who would best address the interests of the company and the shareholders, rather than just the promoters', should make the cut. An independent board must also have the willingness to rock the boat in pursuit of management accountability to shareholders.

It is equally important for a selected family member to earn the respect of employees and let them know that she or he has the requisite skills to keep running and growing the business. Many of India's biggest companies have grown through competencies enhanced within the family tree. Succession planning is key to businesses, and shareholders do see value in accepting their promoters' influence across generations.