Incumbent: Definition, Meanings in Contexts, and Examples

What Is an Incumbent?

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 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.

Understanding 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 be used to 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 be related 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 be used to 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 is a deeper insight into the needs of customers than competitors, a stronger understanding of profitability in regards to meeting those needs, and that the knowledge of their needs and the 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 changes in the market. For example, Blackberry producer Research in Motion was once considered an incumbent of the smartphone market up until Apple's iPhone replaced it as 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.

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 disapprove of the situation resulting from the incumbent's policies or actions, they may be less inclined to vote for them.

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.

Special Considerations

Certain offices in the U.S. government have term limits when an incumbent must be up for re-election. Some of these have life term limits, meaning that once the full term limit has been met, an individual cannot run for that office again.

In the U.S., the president has a term limit of four years where they can be re-elected to serve another four years. A president can serve a maximum of eight years in their lifetime.

The 22nd Amendment to the U.S. Constitution was passed in 1947 and ratified in 1951. It limits the term of the president to two terms in office for a total of eight years.

Members of Congress are split into senators and members of the House of Representatives. Senators serve six-year terms and then are up for re-election while members of the House serve two-year terms and then are up for re-election. Neither the Senate nor the House has life term limits, meaning that they can serve again and again.

The purpose of having term limits is to prevent one individual from exerting so much control over a nation over an extended period of time, as well as giving the citizens the right to change their leadership if they are no longer happy with who is elected. This is a crucial point to the democratic framework of the United States.

Many critics have argued that government representatives spend a significant portion of their time on re-election campaigns and working to get re-elected rather than on the actual responsibilities of the role—or rather, that re-election takes away time from the responsibilities. Many arguments have been made to adjust term limits, the election process, and how candidates receive donations.

Which Incumbent Presidents Lost Their Second Term?

The incumbent presidents that lost their second term are William Taft, Herbert Hoover, Gerald Ford, Jimmy Carter, George Bush Sr., Benjamin Harrison, Martin Van Buren, John Quincy Adam, John Adams, and Donald Trump.

What Advantages Does the Incumbent Candidate Have?

The advantages that an incumbent candidate has include being a known quantity. Their name is known, their personality, their beliefs, and their opinions, the knowledge of running a successful campaign, an air of success, established donors, the risk aversion of voters, and control over certain areas of the government.

Do Incumbents Win Re-Election More Often?

Yes, incumbents win re-election more often. In 2020, 93% of incumbents across the nation won re-election in general elections. In fact, the incumbent win rate was at 90% or above in all states except for California, New Hampshire, Ohio, and West Virginia.

The Bottom Line

An incumbent is an individual that holds a specific position with known responsibilities. Most commonly, an incumbent refers to a person holding a current office in politics; however, it also applies to certain positions in a corporation, relationships in business, as well as a company that is the market leader of an industry.

Article Sources
Investopedia requires writers to use primary sources to support their work. These include white papers, government data, original reporting, and interviews with industry experts. We also reference original research from other reputable publishers where appropriate. You can learn more about the standards we follow in producing accurate, unbiased content in our editorial policy.
  1. Harvard Business Review. "The Incumbent's Advantage." Accessed Oct. 7, 2021.

  2. Annenberg Classroom. "22nd Amendement." Accessed Oct. 7, 2021.

  3. USA Today. "One-Term Presidents: Trump Joins the List of Commanders-in-Chief Denied a Second Term." Accessed Oct. 7, 2021.

  4. Ballotpedia. "Election Results, 2020: Incumbent Win Rates by State." Accessed Oct. 7, 2021.

Take the Next Step to Invest
The offers that appear in this table are from partnerships from which Investopedia receives compensation. This compensation may impact how and where listings appear. Investopedia does not include all offers available in the marketplace.