The recent unedifying spectacle involving our most admired Chief Executive, at one of our most admired companies, has concentrated minds on the issue of succession planning and retirements. How can other companies avoid falling into the same trap?

First of all, they need to be aware that retirements can be particularly challenging. There have been several cases of Chief Executives who are to retire at sixty, beginning to slow down at fifty eight, with undesirable consequences. On the other hand, there have been examples such as Sir Richard Greenbury, who having done an excellent job, became rather apprehensive as the retirement date approached and tried to extend their tenure. Most followers of Marks and Spencer would agree that it would have been much better for the company’s investors and indeed for Sir Richard, had he retired at sixty. He would have been remembered for his sterling performance over many years rather than the debacle right at the end.

The Board of BP, therefore, was correct in demanding that the Chief Executive retire in 2008. It is better not just for BP but also for Lord Browne himself, as he will bow out whilst still at the top. What a tragedy it would have been to see him performing below his best before finally retiring. It is not purely about chronological age but a combination of length of tenure and age. Thirteen years is a pretty good innings for any Chief Executive, and Lord Browne will continue to make an enormous contribution to business, in the next phase of his career.

The second essential aspect of good succession planning is to ensure that there is a suitable gap between the departures of the Chairman and the Chief Executive. The Board of BP has been less good at this. Come 2008, the Chief Executive will have served for thirteen years and the Chairman will have been in situ for eleven years. Having stayed for an eternity, both will depart within twelve months of each other. For a company as large and complex as BP, this is far from ideal. A much better solution would have been for the Chairman to be replaced, after a six year tenure, in 2005. The new Chairman would then have had three years to familiarise him/herself with the company and the potential successors to Lord Browne. He/She would then have had a full second term, to settle the new Chief Executive into the role.

The third important element is to appoint a consultant who will give good, independent and objective advice even if, at first sight, it is not what the client would like it to be. Had the Chairman of BP retired, with an unblemished record, in 2005, he would have been engulfed with offers from other leading multinationals. Now, he will always be remembered for a public squabble. It is a high price to pay for staying on until 2009.

Samuel Johar is Chairman of Buchanan Harvey & Co., Boardroom Consultants.