So meticulous has been the forward planning by Christopher Oughtred that he will soon have eased himself out of his dual role of chairman and managing director of the family business - food manufacturer William Jackson & Son.

He has already found his successor as chairman, Nicholas Oughtred, who takes over in January 2007, and set in motion the final stages of the process of appointing an external candidate to replace him as MD.

The company, which sold its convenience stores business to Sainsbury in 2004, is particularly well versed in handling such issues as it is now passing into its sixth generation of ownership. "My view is that you should get succession done early as you can then do it in a positive frame of mind. Most family businesses are very poor at this - the family leader is reluctant to let go and the older they get the worse they get," says Oughtred.

Although Morrisons is a quoted company, the scenario painted by Oughtred is exactly what has happened with Morrisons and the untidy handling of both Sir Ken's and Bob Stott's successions.

In contrast, Oughtred has ensured a smooth succession by first talking about the issue within the company years ago (he is still only 54 years old) and then putting procedures in place. The formal process began in February 2005 when an external facilitator was brought in to assess the four family members who had been shortlisted to be chairman. Since no family members had put themselves forward for the MD role, a recruitment company was appointed to find a non-family member for the job.

The open manner in which the succession issue has been handled helps avoid any in-fighting. "You can be sure that if there are ructions in a family business then it will be over the succession period. In a family firm you need to take longer over succession because there are emotions involved that you don't get with public companies," he says.

Peter Leach, chairman of the BDO Stoy Hayward centre for family business, ­which has advised William Jackson & Son on its family governance, understands how egos can creep in - especially when the family name is above the door, as in Morrisons' case. He suggests that companies can suffer from the "fatal flaw" of the succession becoming an event, rather than an orderly process that should be carefully handled over a generous timeframe.

Succession planning in the food industry is typically "pretty sensible," says Leach. Within the manufacturers it has to be. "If you supply the multiples then you have to be sharp and well-focused as you'll be up against the best of the best. You therefore need the best structures and people." As far as the retailers go, Tesco has set the bar high for succession planning with the promotion of Sir Terry Leahy to replace Lord MacLaurin still cited as a textbook example of how the process should be handled. Lord MacLaurin worked on the principle that you should promote from inside unless the business is failing.

Jeremy Hamer, chairman of Glisten and a non-executive director at Inter Link Foods, says the one problem here is that as a company gets bigger then the number of people capable of being its CEO narrows hugely. "Although you still see people stepping up that are home-grown, such as Sir Terry, it is less likely in big companies."

Mark Freebairn, head of the practice at search company Odgers Ray & Berndtson tasked with finding key financial staff, suggests that even if a company has a rich pool of talent consideration has to be given to people outside the business. "It's not that Tesco doesn't have somebody good enough internally,­ but they have to get the best person globally. Therefore, they will still go through the process of going outside so they cover all options," he says.

Today, large organisations are likely to go through this process for governance reasons and to ensure that if their internal appointee fails, the board has covered itself by having considered all potential candidates for the post. Companies of all sizes should be looking to benchmark their proposed candidate against potential external candidates, according to Freebairn, so that they can confirm that the best person is being appointed.

Although Sarah Grünewald, head of corporate at Directorbank, says that many companies now undertake benchmarking, she has a problem with the fact that it is often not part of a planned succession programme. "Not only is it done at the last minute but it can be detrimental to the internal candidate whose CV might not be as flashy as the external candidates'," she explains.

She says that internal candidates are frequently overlooked during this benchmarking process and that money gets wasted by appointing an external candidate who can often put the business at risk.

Grünewald recommends a five-year succession plan that begins with identifying the best five people within the company and then kick-starts a programme of investing

in these people. If there is nobody in the ranks she suggests a more junior individual should be hired from outside and coached during this period. "This is so much better than the costly exercise of bringing somebody in from outside at the last minute."

Within larger organisations, the nomination committee, ­ consisting of a company's chairman and non-executives, ­ is responsible for drawing up procedures. But Grünewald says that this panel often only "meets once a year to rubberstamp a decision already taken" when it should take on responsibility for a five-year succession plan.

Hamer advocates having a 'paper' in the drawer that provides the company with options for scenarios such as a the CEO falling ill or senior people unexpectedly leaving, and that this should be revisited as key personnel change.

Suzzane Wood, senior partner at executive recruitment firm Heidrick & Struggles, agrees that there is insufficient formal succession planning in most companies. "It's not enough to say that John will step up if something happens to the CEO. That's disaster recovery."

However, she believes that this is changing due to corporate governance issues and an increasing number of large firms are looking to "leadership assessment services". These are provided by some of the leading search companies and involve finding out the strengths and weaknesses of a board, as well as assessing how it is handling succession planning issues.

No one is pretending that lining up the right person for the job is always easy. With corporate governance continuing to rise up the agenda, and shareholders in family and public companies ­proving increasingly demanding, it's a job that needs to be taken seriously. nwho'll follow sir terry?

The question of who would succeed Lord MacLaurin may have been brilliantly answered with the appointment of Sir Terry Leahy. But attention is now turning to who will succeed the successor. There are four serious contenders in the frame as far as in-house talent goes:

Tim Mason group marketing director and chief executive, Tesco USA

Richard Brasher commercial and trading director

Philip Clarke international and IT director

Andrew Higginson finance and strategy director