What is an ‘Incumbent’?
An incumbent is an individual who is responsible for a specific office within a corporation or government position; this person has an obligation to the position or office she holds. All incumbents of an organization, such as directors and officers, are listed on an incumbency certificate.
BREAKING DOWN ‘Incumbent’
Incumbent may also refer to the obligation itself, or the sense of duty surrounding the accomplishment of a particular task or objective. The term incumbent is also used to refer to a company that is powerful and has a large market share. Most commonly, the term incumbent is used to describe a person who currently holds a particular position or office although it can also be related to the duties that individual is required to perform or an obligation that must be satisfied. Further, the term incumbent can be related to various business standings and relationships.
Incumbents in Politics
When referring to a position in politics, the incumbent is the individual who currently holds the office or position. While the term applies to the person holding the position at all times, it is more commonly used during elections as a way to differentiate two candidates in cases where the current position holder is running for a second term. The person running against the incumbent is often referred to as the challenger.
Holding the incumbent position may be seen as advantageous depending on the current sentiment of the associated constituents. If the constituents feel current circumstances are acceptable, there may be a higher inclination to vote for the incumbent. If the constituents are disapproving of the situation, they may be less inclined to vote for the incumbent.
Incumbents are not required to attempt to maintain the position they currently hold, though they do maintain the title until the day they step down from office. If a new position is created, and no one has stepped into the position prior to the first election, there is no incumbent for the position.
Incumbents in Business
An incumbent in business most commonly refers to a leader in the industry being discussed. The company may possess the largest market share, or may have additional sway within the industry. Incumbents in an industry may change in response to changes in the market. For example, Research in Motion Limited, the producer of the Blackberry, may have been considered an incumbent of the smartphone market in 2007. During the fourth quarter of 2014, Apple, the producer of the iPhone, would likely have been considered the incumbent based on worldwide sales.
An incumbent can also refer to business relationships, such as those between a supplier providing materials to a different business. The supplier currently in use is considered the incumbent due to the associations of the supplier holding the position. If a new supplier wants to take over the duties of the current supplier, the new supplier is a challenger to the current supplier’s incumbency.