- Posted by Intersect International
- On March 3, 2016
- Board, Strategy, Talent
In this blog post, Dr. Vandana Vaidyanathan, Associate Partner at Intersect International, writes about a very pertinent and often over looked area within business – the case for an expanded Board role in talent strategy.
“Over the last year, we have spent significant time with Boards working on CEO succession. Several Board Directors from different Boards have commented that over the years they’ve become better at engaging with C-Suite executives and their development – with a view to be better prepared for CEO succession. However, beyond the senior management team, the talent in the organization remains unknown. The value of Board involvement in talent strategy is clear, especially the importance of Board engagement in talent review beyond the C-suite.
Ask yourself: What is your Board’s involvement in talent strategy? Is it merely an annual item of review in your board meetings? Is it focused mostly on the C-Suite? Is CEO succession the principal catalyst that stimulates extensive Board discussion on your internal talent?
A recent publication by the National Association of Corporate Directors (NACD), as part of the Director Dialogue series speaks to this issue. The paper is based on a series of roundtables conducted by NACD and also draws upon the NACD Blue Ribbon Commission Report on the Board and Long Term Value Creation published in 2015.
The paper identifies three key areas for Board Directors in ensuring a meaningful oversight of talent strategy.
- Set clear expectations about the Board’s requirements for a human-capital strategy. In order to set the tone at the top Boards need to take an organization-wide view. Use a long term horizon and make human capital a recurring topic on the Board’s meeting agenda.
- Use incentives to reinforce management’s focus on talent development. A key mechanism to ensure that talent continues to remain a top priority for the organization is adding talent development metrics to the goals for senior management. Some examples of other metrics are:
- Number of designated successors for key positions who are considered to be “ready now” and “ready in two to three years”
- Number and percentage of employees in high growth-potential and high performance categories, along with their rates of retention
- Changes in employee turnover (including regretted and unregretted departures), vacancy rates, and median recruitment time for key positions
- Seek opportunities for Director participation in talent development efforts beyond the C-Suite. Most Boards have established practices where Directors meet with members of the C-Suite informally over breakfast or dinner meetings. The argument is made that Board Directors need to be extending these interactions with Executives/high potentials at two or even three levels below the C-Suite. Such practices not only give the Directors visibility into a much deeper talent pool, but also insights into the company culture, while contributing to employee engagement.
The NACD paper asserts that the so-called “war for talent” shows no sign of abating and a strategic approach to developing talent is necessary to win this war. We agree. And the Board has an opportunity to help.”
Time to ask: Is your Board armed with practices and mechanisms that allow it to engage with talent beyond the C-Suite and participate in the talent strategy on a consistent basis? Share your experiences and thoughts in the comment section below.