Evaluating the CEO

A study by the Centre for Leadership Development and Research at Stanford Graduate School of Business, reveals that boardrooms of over 160 corporates give only 5 per cent weightage to a CEO's performance in the areas of talent development and succession planning while financial performance dominates the grading metrics. Even as CEOs worldwide recognise the need to grow talent internally, only 23 per cent of business leaders say their firms are strong at developing future leaders.

According to the findings of BTI Consultants whitepaper on "Why talent management is now a top priority for CEOs", the reason behind the mismatch is that most Boards are not strong in giving feedback. "There is no clear agreement on what the CEO should actually be doing. While everyone agrees he or she should deliver a return to shareholders, the next level of detail is usually missing," says James Agrawal, managing director, BTI Consultants. The trend towards a more diverse Board composition often means few Board members have experience in the chief executive role. "It is critical that the Board sets in motion, a clear feedback mechanism," adds Agrawal.