The recent Volkswagen (VW) scandal has highlighted the importance of corporate planning, whilst also raising moral questions. In the midst of the scandal VW’s Chairman resigned and so the company had to make some quick, unplanned, and quite frankly risky decisions; they recalled thousands of vehicles , dealt with reputational damage, and attempted to minimise the damage done to the company’s share value and home town . In short, VW should have had a plan in place for a substitute Chairman, to allow for a smooth transition following the departure of the incumbent.
VW’s experience can be contrasted to Ralph Lauren’s, who’s Chairman, Ralph Lauren, had planned for the smooth transition following his departure .
However, and you may be asking, how does this relate to me?
In a similar way to VW, we, as individuals, collect assets (property, cars, and cash) during our lifetime. When we die these assets are still held by the individual who first purchased them (us), and so, without adequate planning, a few unlucky relatives may have to make difficult decisions on our behalf – do we sell the property, can we avoid claims on the estate etc.
Therefore, the best way that we, as individuals, can plan for a ‘smooth transition’ is to make a will. That way we can nominate an executor – a person that deals with our estate – and provide them with our post-death wishes.