How A Board Should "Talk Talent" With Its CEO

October 20, 2014

By Patrick Dailey and Charles Bishop

A lot has changed since corporate governance matters have been more responsibly practiced. The board’s focus on talent management matters is one of the most significant changes. Historically, a board’s concern ranked low. As recently as 2008, directors ranked these matters 12th or 13th in importance. Fast forward to 2013, and talent management has jumped to one of the top governance concerns.

Investors historically have operated from hunches to make the connection between adept leadership and shareholder value creation. Yet in a 2013 study of equity analysts, strength of management was ranked as the most important factor influencing investment decision making. Arguably, analysts have awakened to focus on leadership as a key differentiator between good bets vs. bad ones.