SINGAPORE  - Corporate boardrooms could learn a thing or two from Singapore. The ruling party has set in motion the process to pick its next prime minister, years in advance of a handover. Careful succession planning is often lacking at companies. More diversity, though, would benefit both international industry and the Lion City.

The selection of the country’s likely fourth leader - after Lee Hsien Loong, the son of Singapore’s founder Lee Kwan Yew - has been predictably choreographed. The People's Action Party, after all, rules in part because of its capacity for renewal.

In the end, the so-called “fourth generation” of politicians brushed aside health concerns and elevated Heng Swee Keat, the finance minister and former central banker. He is known for waking up after a 2016 stroke and demanding his cabinet papers, dedication that has earned him admiration.

Directors can take a leaf from this meticulous playbook. Even with an election ahead, continuity is nearly assured for management of the $320 billion economy. By contrast, companies such as advertising conglomerate WPP WPP.L , dominated by Martin Sorrell until his abrupt departure this year, lay bare the risks of poor planning. Others, including Walt Disney, keep delaying the transition.

There are shortcomings in Singapore’s system, too. A change led by insiders will be familiar to clubby boardrooms. The top three premier candidates had nearly identical backgrounds. All are men, all from Singapore's ethnic Chinese majority. If Heng gets the top job, he will be the third leader to have attended the same elite school.

All of this carries a risk of group-think. Shareholders wrestle with something similar. Women, for example, account for just 15 percent of directors globally, according to the International Finance Corporation, part of the World Bank. Diversity of thought matters when developing a strategy or seeking growth. One way to broaden the pool in Singapore, at least, would be to encourage more business leaders to enter politics.

For now, a trade war between the United States and China threatens one of the world's most open economies, one attempting to morph into a financial technology hub. A debate over inequality is also getting noisier. Succession planning is good, but having candidates with a variety of perspectives is better.

On Twitter https://twitter.com/claramarquesrtr

 

CONTEXT NEWS

- Singapore’s ruling People’s Action Party on Nov. 23 named Finance Minister Heng Swee Keat to first assistant secretary general, putting him in line to take over as prime minister when current leader Lee Hsien Loong steps down. Singapore has been governed by the People’s Action Party since independence in 1965.

- Heng was one of three senior figures tipped to succeed Lee, but his health had been a concern after he suffered a stroke during a cabinet meeting in 2016. He is now expected to be named deputy prime minister next year.

- Lee has pledged to step down in the coming years. A general election is due any time before January 2021, when the current five-year parliamentary term ends, and could be held as early as next year.

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(Editing by Jeffrey Goldfarb and Katrina Hamlin) ((clara.ferreira-marques@thomsonreuters.com; Reuters Messaging: clara.ferreira-marques.thomsonreuters.com@reuters.net))