“We have an existing Nomination Committee comprising the Chairman, SID, CEO and a NED. We have 3 other NEDs but several years ago decided that we wouldn’t have all the NEDs on the NomCom in an effort to spread workloads.
Now that the topic of Chairman succession is being discussed, the SID is suggesting convening a separate nomination-type committee to deal with the fact that he’s suggesting the CEO could be considered partially conflicted and that would leave the SID and one NED to be the “committee”
This answer (given above)states the position correctly in my view:
“The election of a Chairman to the board is ultimately the responsibility of the whole Board. The purpose of a Nominations Committee is not to make board appointments it is to recommend candidates for consideration and approval by the full board. Anyone currently on the Noms committee who might be conflicted in this search needs to either recuse themselves from the process or an alternate should be appointed to act for them. You need to just check the terms of reference of the Noms committee and also the articles to see if there is anything in there which addresses such points.”
If you change members of the noms co, presumably you have to announce the changes in director responsibilities? We had all NEDs on the committee, and as this included candidates for the Ch role, they stepped out of the meeting where Ch was being discussed. That way they remain on the noms co, and are shown as attending the meetings, but were reported as not taking any part in relevant discussions.
Incidentally we also allowed EDs to participate in the Noms co debate by being in attendance.
Noms co makes the recommendation to full board, which ultimately decides. This process also allows the board to contro the timing of the decision and therefore the announcement.
The election of a Chairman to the board is ultimately the responsibility of the whole Board. The purpose of a Nominations Committee is not to make board appointments it is to recommend candidates for consideration and approval by the full board. Anyone currently on the Noms committee who might be conflicted in this search needs to either recuse themselves from the process or an alternate should be appointed to act for them. You need to just check the terms of reference of the Noms committee and also the articles to see if there is anything in there which addresses such points.
We were facing a similar issue many years ago and amended the constitution of the nominations committee to include all the NEDs.
How many directors are needed for the NC to be quorate, surely more than one? I don’t think it needs a separate Committee. Identify any internal candidates and they should step down from the NC. SID or another independent NED should chair the NC when the successor to the Chair of the Board is being considered. Decide on membership of the NC to deal with this appointment of Chair of the Board, i.e add extra NEDs. Board and commitee membership would no doubt be reviewed on the appointment of a new Chair of the Board and extra NEDs can step back then. In practice, when we last appointed a chair, the SID chaired the Committee. The NC used a head hunter and other names thrown into a long list. NC whittled down to a short list and then a final three. Execs and the old Chair met with the final three before NC recommendation made to the Board.
I would favour using the Nomination Committee and making changes to its composition if required. The first step should be to identify who the internal candidates might be – if any are on the Nom Comm they should stand down during this process.
We have recently been through the process of appointing a new Chairman. Neither the SID nor the other NED on the Nomination Committee wished to be considered as a candidate so the process was conducted by the Nom Comm, which for this purpose was chaired by the SID and we appointed 2 other NEDs to the Committee to support the process.