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A scarce product, whose worth is hard to assess and for which buyers will pay enormous, seemingly irrational prices. The market for highly paid chief executives looks a bit like the market for Modiglianis. And, like works of art, executives are mostly traded through go-betweens — high-end headhunters who source, vet and prepare candidates for senior corporate office.

But the parallel, while tempting, is inexact. Chief executives are no oil paintings. Good ones may be rare but, as a breed, they are not as scarce or as valuable as they think. Similarly, the people who search for them are not quite as useful or expert as they pretend.

As one headhunter said of chief executives: “Obviously they have to be reasonably intelligent and affable and sensible and so on [but] it’s not like they’re one in a million . . . they’re like us, yes, exactly like us.” Here is another executive search consultant on the people who, indirectly, pay his wages: “I think there are an awful lot of FTSE 100 CEOs who are pretty mediocre and . . . there’s a lot more luck there in terms of how they got it [and] there’s so many other people that could have got that [position].”

So there it is. To quote the London School of Economics researchers who extracted these and many other deliciously unguarded comments from London-based headhunters: “There is luck in being a candidate, luck in being chosen and luck in the choice turning out to be better than ‘mediocre’.”

When I warned a few years ago that a combination of new rivals, structural change and online data — notably LinkedIn — could sweep away headhunters if they did not shape up, I drew fierce fire from some of the searchers. “Do you actually believe we are getting by on smoke and mirrors?” fumed one.

Well, the research goes further in suggesting they are. It strips away the notion that anyone can accurately appraise the performance of potential chief executives, or that headhunters make much of an effort to appraise it, leaving the industry almost as naked as Modigliani’s “Nu couché”.

Do you keep a database tracking the success of people you appoint, the researchers asked one consultant. “We don’t because there’s an awful lot of data going around.” Do you assess candidates’ recent performance, they asked another. “We don’t do that in any sort of formal way. I mean, you know, obviously we will, when we place somebody, hopefully then they become clients or, you know, you stay in touch with them.”

“Staying in touch” is one of the few fundamental skills for a headhunter, in particular, staying in touch with potential candidates and with boards that may offer follow-on fees. It explains the circular way that search firms assess and justify the value of their work: by counting repeat business. The study, which appears in the Journal of General Management, also exposes the conservatism of the process (which probably contributes to lack of diversity on boards), and the weight it places on personal chemistry between searchers and sought.

Oddly, it is the very difficulty of linking corporate success to executive skill that provides headhunters with some protection against the bots and algorithms transforming the lower end of the recruitment industry. A few “affable and sensible” humans are still needed to mediate between directors and candidates. CEOs’ reputations “are acquired and lost as a result of anecdote and perceived performance — it isn’t a science”, one experienced headhunter explained to me. Some experts will always be needed to collect and interpret the all-important references, remove the spin, flattery and lies, and complete the picture presented to the board.

As chairman, there is something to be said, too, for having an adviser at your side during the succession process, but one I talked to said he would always follow up references in person, not trusting a headhunter to “read the silences”.

Headhunting is becoming more objective and less informal. But the middling quality of many chief executives is a sign that plenty is still wrong. Some of those in the new study voiced their distaste at the high level of executive pay. The hunters, however, play a vital part in a selection process that they admit is sometimes arbitrary, where inclusion in the shortlist is often based on luck, and the impact of candidates almost impossible to measure. If CEOs are highly paid and lowly rated, the people who help pick them must share part of the blame.

andrew.hill@ft.com

Twitter: @andrewtghill

Letters in response to this column:

Headhunters not solely to blame for failings / From Adrian Danson

Headhunters have to follow a rigorous process / From Jonathan Farn

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