The events of 2020-2021 further highlighted the strategic importance of human capital management (HCM) issues – including those employee and supply chain health and safety issues that are critical to the company’s performance and reputation. Over the next five years, workforces are expected to be disrupted by churn, the need for reskilling, upskilling and new ways of working.

Given the risks and opportunities that will come with these changes – including labor scarcity and a continued war on talent – boards should be more engaged in the oversight and communication of HCM-related matters.

In 2022, we can expect continued scrutiny of how companies are adjusting their talent development strategies. The challenges of finding, developing, and retaining talent, amid a labor-constrained market have created a war for talent.

  • Does the board have a good understanding of the company’s talent strategy and its alignment with the company’s broader strategy and forecast needs for the short and long term?
  • Which roles throughout the organization are mission critical, and what are the challenges keeping those roles filled with engaged employees?
  • Which talent categories are in short supply, and how will the company successfully compete for this talent?
  • Does the talent strategy reflect a commitment to Diversity and Inclusion (D&I) at all levels?
  • What automation is expected and how will it impact existing and future roles and skills needed?
  • More broadly, as millennials and younger employees – who increasingly choose employers based on alignment with their own values – join the workforce in large numbers and talent pools become globally diverse, is the company positioned to attract, develop and retain top talent at all levels? Here, as with our first priority, it’s important to ensure your company has a clear, well-articulated purpose.

Pivotal to all of this is having the right CEO and board in place to drive culture and strategy, navigate risk and create long-term value for the enterprise. Succession planning is important for all organizations, though the process and implementation may differ depending on the specificities of the particular organization. This may range from having succession planning on the radar to implementing a dynamic and ongoing process to create a pipeline of potential CEO candidates (and other key executives):

  • How does the board get to know the high-potential leaders two or three levels below the C-suite – especially in a work-from-home environment when office visits and board-executive in person meetings may not be feasible?
  • How are you motivating the next generation(s) to stay engaged and informed? How are you preparing them for a role on the board?