Nomination Committee Defined
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.
A Little More on the Nominating Committee
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.