Rupert Murdoch’s long, imperious reign has left News Corporation without a designated successor but with the likelihood of high-profile, internecine power struggles among family members and shareholder factions to choose a new leader.

Deutsche Bank was locked in a bitter kerfuffle between the supervisory board chairman and the chief executive before announcing in late July a dual-management structure.

While on leave for health reasons, Apple’s chief Steve Jobs dismissed as “hogwash” reports that some board directors had contacted search firms and possible chief executive candidates.

These crises demonstrate the lack of preparation by major companies to have transparent, orderly and visionary succession plans in place.

Apple’s arrogant handling of Mr Jobs’s health issue shows that rumours earn front-page coverage, investor uncertainty escalates, and steely “no comments” from public relations officers only compound the sense of impending doom.

Worldwide, many prominent companies are confronting succession challenges.

Succession planning is tough for any company, particularly those where one person for so long has been the brand, the genius, and the patriarch.

But the consequences of poor or non-existent succession planning include reduced performance, higher turnover of senior management, market share loss to more aggressive and focused competitors, irreparable reputational damage, and scepticism among institutional investors. All of these undermine share valuations, studies show.

Boards with long-term horizons, ongoing monitoring of both their leadership teams and future candidates (internal and external), and well-connected directors whose networks provide good intelligence on CEO recruitment are signs of well-governed companies with promising outlooks for orderly transition, according to one researcher.*

These findings underscore why investors need to include a rigorous review of succession plans as part of their due diligence in assessing whether a company is a good or bad investment opportunity.

Too often, this seems a low priority compared to the headline issues of “say for pay”, “proxy access” and “independent directors”.

When companies post strong profits, complacency and grateful deference reign.

Should disputes arise over succession within a board, it is unlikely they will have dispute resolution policies and practices in place to channel hostilities into solutions rather than fuelling the destructive dissensions.

Chairmen and chief executives dislike succession schemes because history is replete with examples of how “heirs apparent” dilute authority and their off-stage presence fuels paranoia that backroom deals may lead to an expedient dismissal.

Problems in succession planning abound. Poor governance practices generally may mean a rudderless, inept board. Directors may go through the motions, thinking the likelihood of their current leader turning over the reins to be a distant concern.

Boards may be at a loss as to what the company needs in a leader, reverting to the highly personalised traits, skills and vision of the current leader (“we need another Elizabeth”). Merit may succumb to politics, force, personal agendas and corruption.

Succession planning for the top position tends to be pursued independent of a company’s recruitment and human resources policies. Best practice demands that companies cultivate and elevate those from within.

For those boards that do develop a model succession plan, the effort may succumb the way gardens left untended invariably do.

The pace of change necessitates a frequent review of succession plans in concert with a company’s strategic review.

Cash flow analysis may be the critical tool that investors use to guide their choices; much-ignored succession planning should be equally analysed.