Directors of North American companies were asked by Stanford University to identify the top weaknesses of CEOs. The two weaknesses that tied for top place were mentoring skills and board engagement. Some of those surveyed were CEOs themselves so there’s an element of self-criticism here. The primary concern that this raises is the ability or willingness of CEOs to nurture the talent that will follow them.
Thankfully for CEOs, these “non-financial” areas are not given huge weighting in the boardroom. They’re identified as being a minus for many CEOs – but not a big minus. Talent development and succession planning got only a 5% weighting and employee satisfaction chalked up a measly 2.5% weighting.
CEOs were rated high in decision making and low in people management. As for “listening” and “conflict management” – they barely registered a blip among the directors surveyed. The same can be said for areas like customer service and innovation. What counted above all else were the financial performance metrics with non-financial qualities hardly valued.
Professor David Larcker at Stanford warns companies that this could store up problems in the future:
Amid growing calls for integrating reporting and corporate social responsibility, companies are still behind the times when it comes to developing reliable and valid measures of nonfinancial performance metrics
To get full details of the report – click HERE