The term “incumbent” refers to an individual who currently holds a set of responsibilities within a specific office as part of a corporation or within a branch of the government. As the incumbent, this person has an obligation to the position or office they hold. All incumbents of an organization such as directors and officers are listed on an incumbency certificate. An incumbent may also refer to the obligation itself or to the sense of duty surrounding the accomplishment of a particular task or objective.
Key Takeaways
- The term incumbent has many different meanings, though it normally refers to an individual who currently holds responsibilities within a corporation or a branch of the government.
- In business, an incumbent may also refer to a leader, specifically the leader of a company or a company that holds a large portion of the industry’s market share.
- Incumbents also refer to business relationships, and in politics, the incumbent is an individual who currently holds office.
- Companies list their leaders on an incumbency certificate. These leaders include current directors, officers, and may also include main shareholders.
- In political elections, incumbents most often win re-election rather than the challenger winning the position.
Comprehensive Understanding of Incumbents
The word “incumbent” has several different meanings depending on the context in which it’s used. It most commonly refers to a person with a position in a specific office whether they are part of a company or an elected official. This person has certain responsibilities that come with their position. Business leaders such as chief executive officers (CEOs) are incumbents of a company, while a senator is a political incumbent.
The term “incumbent” can also describe the duties a particular individual is required to perform or the obligation they must satisfy. It can also refer to a company that is powerful with a large portion of its industry’s market share. Further, the term incumbent can relate to various business standings and relationships.
As noted above, companies list their leaders on an incumbency certificate. These leaders include current directors, officers, and may also include main shareholders. This certificate is considered an official company act just like an annual report. As such, third parties including shareholders are able to rely on it being accurate.
Examples of Incumbents
In Business
An incumbent in business most commonly refers to a leader in the industry. While it may normally refer to a person, that isn’t always the case. It can also describe a company or a product as well. A company may, for instance, possess the largest market share or may have additional sway within the industry.
In business, market-leading companies should have the “incumbent’s advantage,” which includes deeper insights into customer needs than competitors, a stronger understanding of profitability concerning meeting those needs, and that the knowledge of those needs and profitability is less open to imitation than the uniqueness of their product or service.
As such, incumbents in an industry may change in response to market shifts. For example, Blackberry producer Research in Motion was once an incumbent of the smartphone market until Apple’s iPhone replaced it 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 its existing associations. 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.
In Politics
When referring to a political position, the incumbent is the individual who currently holds the office. While the term applies to the person holding the position at all times, it is more commonly used during elections to differentiate two candidates when the current officeholder is running for re-election. 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 constituents. If the constituents feel current circumstances are acceptable, there may be a higher inclination to vote for the incumbent. If they disapprove of the incumbent’s policies or actions, they may be less inclined to support them.
Incumbents are not required to maintain their position, though they do keep the title until they step down from office. If a new position is created, and no one has previously held it, there is no incumbent for the position.
Special Considerations
Certain offices in the U.S. government have term limits that require incumbents to run for re-election. Some have life term limits, meaning that once the limit is met, an individual cannot run for that office again.
In the U.S., the president has a term limit of four years and may be re-elected for another four years, serving a maximum of eight years in a lifetime. The 22nd Amendment to the U.S. Constitution, passed in 1947 and ratified in 1951, limits the president to two terms, totaling eight years.
Members of Congress are divided into senators and members of the House of Representatives. Senators serve six-year terms before re-election, while House members serve two-year terms. Neither the Senate nor the House has life term limits, allowing continuous re-election.
The purpose of term limits is to prevent individuals from exerting prolonged control over the nation and give citizens the right to change leadership if dissatisfied. This is crucial for the democratic framework of the United States.
Critics argue that government representatives spend significant time on re-election campaigns rather than their actual responsibilities, suggesting that re-election efforts detract from serving the role’s duties. Suggestions have been made to adjust term limits, the election process, and candidate donation guidelines.
A Brief History of Incumbent Presidents Who Lost Re-Election
Several incumbent presidents have lost their bid for a second term, including John Adams, John Quincy Adams, Martin Van Buren, Franklin Pierce, Benjamin Harrison, William Taft, Herbert Hoover, Jimmy Carter, George Bush Sr., and Donald Trump.
The Incumbent Advantage in Elections
The advantages of an incumbent candidate include being a known quantity—voters are familiar with their name, personality, beliefs, and opinions. Additionally, incumbents have experience running successful campaigns, established donors, an air of success, and control over certain government areas.
Success Rates of Incumbents in Re-Elections
Incumbents generally win re-election more often than challengers. In 2023, 94% of incumbents nationwide won re-election in general elections, with the incumbent win rate exceeding 90% in all states except Colorado, Connecticut, Georgia, Kansas, Minnesota, New Hampshire, and Ohio.
The Takeaway
An incumbent is an individual holding a specific position with established responsibilities. Typically, the term refers to a person holding a political office. However, it also applies to certain corporate positions, business relationships, and even market-leading companies.
Related Terms: Director, CEO, Senator, Shareholder, Re-election.
References
- Thomson Reuters Practical Law. “Incumbency Certificate”.
- Harvard Business Review. “The Strategic Advantage of Incumbency”.
- The New Yorker. “How BlackBerry Fell”.
- Ballotpedia. “Incumbent”.
- Constitution Annotated. “ArtII.S1.C1.9 Term of the President”.
- Constitution Annotated. “Amdt22.1 Overview of Twenty-Second Amendment, Presidential Term Limits”.
- Constitution Annotated. “Amdt20.S1.1 Presidential and Congressional Terms”.
- Washington Post. “Trump Just Joined History’s Club of One-Term Presidents, Rejected by the Americans They Led”.
- Ballotpedia. “Election Results, 2023: Incumbent Win Rates by State”.
