What is a Nomination Committee?

A nomination committee is a select group of directors on a corporate board charged with identifying nominees for election to the board. The roles and responsibilities of the Nomination Committee is a part of the corporate governance. The committee is responsible for evaluating and recommending the candidates for the board of directors of an organization. The committee also scrutinizes the skills and characteristics required for becoming a board candidate. The other duties of the nomination committee may vary depending on the company.

What Does a Nominating Committee Do?

The nomination committee identifies the best candidates for different director positions. They may also review and amend (or propose amendment of) the corporate governance policies of an organization related to this process. The number of members in a nomination committee depends on individual organizations. Usually, the Chairperson of the Board, the Deputy Chairperson of the Board and the Chief Executive Officer hold positions in the nomination committee. The Nomination Committee plays a crucial part in a company's corporate governance. A sound corporate governance policy is necessary for maintaining a balance between the interests of different stakeholders of the company including clients, shareholders, management, suppliers, investors, government and others. Strategizing the policy of a company is an important part of corporate governance. The nomination committee facilitates a healthy development and operation of the board and its members. The nomination committee often appoints the chairperson of the board who is responsible for presiding over the meeting of the board or executive committee. The chairperson ensures the success of a meeting by negotiating to reach consensus. The position of chairperson can be an executive position (full-time) as well as a non-executive (part-time) position. The nomination committee also may get involved in finding a suitable person for the position of the Chief Executive Officer. The CEO is the top-ranked executive and is responsible for taking decisions regarding the operations of the business, managing the resources and maintaining a liaison between the board of directors and other executives. The CEO of a company is often also a member of the board. The CEO plays a very important role in running the business of a company. The roles and responsibilities of the CEO are dependent on the company's size and nature of its business. A CEO is generally a full-time position, and he or she is responsible for making all the important decisions at macro level strategic planning. The CEO devises the policies in accordance with the overall goal and vision of a company. In smaller firms, the CEO may also get involved in interviewing and hiring people for the company. In larger companies, these responsibilities are generally assigned to the managers of respective departments. The nomination committee needs to be very careful while identifying the person for the post of a CEO as his or her skill and knowledge may have a great effect on the company's business.

Related Topics

• Corporate Governance Law (Intro)
• What is Business Governance?
• Berle-Means Thesis 
• Corporate Governance Rating Definition
• Who are the members of a corporation?
• Corporate Charter
• Shareholder Register
• Common Stock
• Preferred Stock
• Par Value
• Authorized Shares
• Issued Shares of Stock
• Unissued Shares of Stock
• Outstanding Shares
• Institutional Shares
• Dual Class Shares
• What is a closely-held corporation?
• Close Corporation Plan Definition
• What is a Private Company vs a Public Company?
• What is the role and purpose of the corporation?
• What is the Agency theory of corporate governance?
• Shareholder-Centric Perspective
• Shareholder Value
• What is the Stakeholder theory of corporate governance?
  
• What is the role & rights of Shareholders in the corporation?
  
• Shareholder Democracy Definition
• Quorum Definition
• Information Circular
• Straight and Cumulative Voting
• Statutory (Straight)
  
• Cumulative Voting
• Plurality Voting
• Class Voting Shareholders
• Changing the Voting Rules
• Supermajority (Voting)
• Shareholder Sponsored Proposal 
• What are the variations on attributes of Ownership structure?
• Stock Split
• What are the fiduciary duties owed by shareholders?
• When is a shareholder personally liable for corporate obligations?
• Appraisal Rights
• Dissenter's Rights
• Say on Pay Rights
• How can shareholder enforce their rights (direct and derivative actions)?
• Amotion
• What is the process for bringing a Derivative action?
• What are corporate vote Proxies?
• Proxy Statement
• Proxy Fight or Contest Definition & Explanation 
• What is Shareholder Activism and the significance of Institutional Investors?
• Activist Investor
• Overview of Board of Directors
• Board Decision Making
• Advisory Board (Observer Directors)
• What is the role of the Board of Directors?
• Board of Trustees
• Board of Governors
• What is the composition of the board of directors?
• Chairman of the Board
• CEO as Chairman of the Board
• Inside Director
  
• Outside Director
• Outside Director or Non-Executive Director Definition
• Independent Outside Director
• Budget Committee
• Audit Committee
• Compensation Committee
• Nomination Committee (Corporate Board)
• What standards govern the actions of the board of directors?
• Duty of Candor Definition
• Duty of Care (Board of Directors)
• Duty of Loyalty (Directors) 
• Self-Dealing
• Board Evaluation Definition
• What is the Business Judgment Rule?
• What is D&O insurance?
• Codetermination (Foreign)
• What is the role of Managers of the corporation?
• What standards govern manager actions?
• Chief Executive Officer (CEO)
• Chief Financial Officer
• Chief Information Officer (CIO)
• Chief Investment Officer (CIO)
• Chief Legal Officer
• Chief Operating Officer
• Chief Risk Officer
• Chief Security Officer
• Chief Technology Officer (CTO)
• What are the primary state and federal corporate governance laws?
• What is the role of the state in corporate governance?
• What is the role of Securities Laws in corporate governance?
• What is the role of the Foreign Corrupt Practices Act in corporate governance?
• What is the Sarbanes-Oxley Act (SOX) effect on corporate governance?
• Sarbanes-Oxley Act (SOX)
• What is the Dodd-Frank Wall Street Reform and Consumer Protection Act effect on corporate governance?
• Corporate Monitors
• What industry organization standards affect corporate governance?
• How do proxy advisory firms affect corporate governance?
• What is the role of ethics in corporate governance?
• What are the major causes of corporate governance issues?
• What are the access to information issues?
• What are decision-making structure issues?
• What are the power struggle or competition issues?
• Holding Company
• What are hostile takeovers and defenses to hostile takeovers?
• Williams Act
• Staggered Board
• Shark Repellent Defenses?
• Poison Pill Defenses?
• Flip Over Poison Pill Definition
• Flip In Poison Pill Definition
  
• Voting Poison Pill Plan
• Delay-Tactic Defenses?
• Legal Lockup Defenses?
• White Knight and Pac Man Defenses?
• Jonestown Defense
• Lady Macbeth Strategy
• Macaroni Defense
• Yellow Knight
• Back-end Plan Definition
• Backflip Takeover Definition
• Dead Hand Provision Definition
• Kamikaze Defense
• Operating Company Property Company Model
• Whitemail
• Scorched Earth Policy Definition
• Revlon Rule
• What are benefit-alignment issues?
• Cadbury Rules Definition