High Performance Boards

CHAPTER 24The Talent Pipeline

Talent has become a critical resource and an integral component of a company's overall business strategy. The governance discussion has therefore also shifted to focus on human capital, and on talent oversight as part of strategic planning. In particular, a company's ability to build its pipeline of effective leaders has become a strategic consideration. This is often referred to as leadership ‘bench strength’ – the capabilities and readiness of potential successors to move into key professional and leadership positions.

Although issues of human capital and capabilities are not new to board agendas, a board's oversight mandate has often been seen primarily in terms of risk governance, ethics, and corporate responsibility rather than talent. And when boards did play a part in issues related to talent, their involvement typically focused on appointing, mentoring, and monitoring the performance of the CEO, alongside board composition, tenure, and appointments.

The Board's Responsibility for Talent Management

Now that corporations have universally recognised talent as the key ingredient in their success, and acknowledged that the ‘war for talent’ rages on unabated, where does that leave the board? What is the board's responsibility in terms of the organisation's talent management?

Depending on the specific issue, boards get involved at different levels. At the basic operational level, many boards are doing more of what they have been doing for years: ...