’Develop board talent earlier’: IA

’Develop board talent earlier’: IA

Companies need to work earlier on developing talent which can be promoted to the boardroom, according to a report by The Investment Association and EY.

The 20-page report, called Board Effectiveness: Continuing the Journey, said investors are increasingly interested in what talent exists several levels below board level.

Helena Morrissey, chairman of The Investment Association, said: “Investors have a pivotal role in working with companies to improve board effectiveness.

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“Effective boards are essential to the long-term success and sustainability of companies and ultimately of the economy as a whole.

“This report provides practical discussion points to companies and investors to help them enhance their capacity to ensure that boards are effective and always open to improvement.”

The report also recommends having regular discussions about the chief executive’s tenure and setting expectations around length of tenure at the time of appointment.

It also recommends involving investors in defining the attributes to be sought in new board appointments.

Adviser view

Greg Heath, managing director of Lancashire-based Derbyshire Booth, said: “This sounds like a bit of tidying-up surrounding governance rather than root and branch reform, and that’s never a bad thing.

“I don’t think there’s anything fundamentally wrong with board effectiveness.”