In common with their fellow Muslim believers the Shahada, that is, belief in the unity of God and the model of divine guidance through God’s Messenger, the Prophet Muhammad, the Shi‘a maintain that for the spiritual and moral guidance of the community, God instructed the Prophet to designate a figure of authority to succeed him as leader of the Muslims. This authority was Imam ‘Ali, the Prophet’s cousin and son-in-law. According to the Shi‘a, this conception of the community’s future leadership was made public by the Prophet in the last year of his life at Ghadir Khumm, where he designated Imam ‘Ali as his successor to lead the Muslims. While both Shi‘a and Sunni sources refer to this event, it is the specific interpretation of the role of Imam ‘Ali as an authentic leader or ‘Imam of Guidance’ that distinguishes the Shi‘a interpretation of authority and leadership from that of other Muslim communities.
From an academic article at the Institute of Ismaili Studies: What is Shi‘a Islam? Dr. Farhad Daftary, Professor Azim Nanji