According to the study of 23,000 senior leaders, from member-based advisory firm CEB, boards do not have confidence that "incumbent leaders" are "competent" to deal with new working practices.
The report said employers want their executives to have the ability to build strong networks within their business based on autonomy, empowerment and collaboration, as well as the traditional skills of organising and directing employees and driving change where needed.
However, it found only 7% of leaders have all the skills required to be successful in today's demanding work environment.
Irrelevant skills
The study also found 74% of leaders admit the number of stakeholders they interact with on a regular basis, both internal and external, has significantly increased, yet at the same time 70% do not feel equipped to create and lead these networks effectively.
The study said senior leaders have been slow to catch up with the increasingly connected way that companies are working today. As a result, companies around the world are facing a serious shortage of leadership talent as directors find that their skill-set and working approach are no longer relevant.
To ensure they maintain their pipelines of future management talent, companies must re-assess the skills they look for and develop in their leaders, the study stated.
Tomorrow's leader
It found that today's work environment means traditional skills need to be supplemented by the ability to influence wide networks, while those who rely on top-down control are unlikely to be the ones to drive high-performance.
Global Research Officer at CEB, Conrad Schmidt, said in today's environment developing a business strategy is going to be a lot more variable than in the past.
"Organisational performance is going to depend upon having effective network leadership. Work is done differently now. If you're going to achieve higher growth, maintain your company's edge and differentiate yourself from the competition, your leaders are going to have to be driving the organisation onto a whole new playing field.
He added: "Moving forward, network leadership is going to be a leading driver to staying competitive in today's work environment."
