More than a third (39%) of UK finance directors surveyed cited "lack of existing internal talent" as the primary reason preventing them identifying a successor. One in four cite "lack of time to develop and mentor" as the primary factor, followed by "lack of time to identify their successor (15%), "lack of exposure to senior-level initiatives for employees" (12%) and "lack of professional development opportunities for employees" (8%).
When the respondents were asked how they would foresee a successor being identified for their role, they mentioned external permanent hire (40%), local internal promotion (26%), international transfer/internal promotion (23%) and using an interim professional until permanent hire is selected (11%).
Speaking to HR magazine, Simon Nash, HR director at law firm Carey Olsen, said of the research: "Talent succession is a critical component of every manager's own role.
"All of the financial directors in the survey must presumably have a team of people working for them. Are they saying that they have failed to recruit, develop, train, guide and inspire a single member of their own team to be able to step up into their shoes, if, for example, they were promoted to the CEO's chair?
"I think this lack of management of the organisational risk of attrition probably shows they wouldn't have been a good CEO pick anyway."
Nash added: "HR can bring a toolkit of assessment, development and talent management methodologies that can make the managerial task of mitigating risk much easier and also far more scientifically robust.
"None of this, in my view, detracts from the key management responsibility upon the incumbent manager to be managing for the future as well as the present."
Phil Sheridan, managing director, Robert Half UK said: "With a raft of high profile senior resignations over the past year, it is surprising to see such a large proportion of financial directors without a chosen successor, or indeed the pool to choose from. As a result, the future continuity and performance of those businesses is at risk."
Sheridan added: "It's a common misperception that succession planning is only for large companies.
"However, it is essential that businesses of all sizes prepare selected employees to later assume specific senior roles in the firm. In addition to implementing formal succession plans, employers should look at ways to help manage the process further, whether it's offering managers with executive potential more training and development or bringing in interim employees until a permanent hire is selected."