British boardrooms are guilty of a long-term failure to invest sufficient time and money in talent management, new research has suggested, and this complacency is potentially costing businesses and shareholders dear.
The study by talent management specialists Jackson Samuel scrutinised the boardrooms of the UK's top companies and discussed the issue of talent with 58 of the country's most influential HR directors.
It concluded that companies in which the identification and promotion of talent was fixed within the organisational culture outperformed those where it was not by more than two thirds, when comparing total shareholder return over a five-year period.
Talent management is a key area of the Higgs Combined Code on Corporate Governance, as it relates closely to the code's provisions on board size and balance, director appointments and succession planning and board member performance evaluation, argued Jackson Samuel.
Yet, for many UK boardrooms talent management remained an aspiration or something carried out elsewhere within the business, said Lesley Uren, Jackson Samuel chief executive.
"This report suggests that many chief executives are simply devolving their responsibilities when it comes to senior level appointments," she said.
"We compared total shareholder return across the 58 companies and it is crystal clear that those companies where the CEO is taking a lead in terms of managing talent are returning significantly better value to shareholders," she added.
Chief executives who assumed that when talent left their business a replacement would be quick and easy to find needed to take a long, hard look at the marketplace.
"We are calling on the City and large shareholders to start asking more searching questions of companies," she continued.
Questions that needed to be asked included: how many internal promotions had been made at a senior level over the past year and how much time did the chief executive and operating board actually spend each year on talent management? "Two of the key solutions are to keep talent management strategies simple and transparent," added Uren.