What Is a Nomination Committee?

A nomination committee is a committee that acts as part of an organization’s corporate governance. A nomination committee will evaluate the board of directors of its respective firm and examine the skills and characteristics needed in board candidates. Nomination committees may also have other duties, which vary from company to company.

Understanding the Nomination Committee

The nomination committee will often identify suitable candidates for various director positions. Other responsibilities may include reviewing and changing corporate governance policies. The committee is often comprised of the chairman of the board, the deputy chairman, and the chief executive officer (CEO). The exact number of members on each committee tends to differ depending on the organization.

The nomination committee is a crucial part of a company’s corporate governance. This is a system of rules and processes that direct and controls a company. Corporate governance is essential for balancing the interests of a company's many stakeholders, including but not limited to shareholders, management, customers, suppliers, financiers, government, and community of users. Corporate governance provides the framework for attaining a company's objectives.

Nomination Committee and Chairman of the Board

The nominating committee will often seek out and appoint a chairman of the board. The chairman of the board is responsible for presiding over board or executive committee meetings. The chairman ensures these meetings run smoothly and remain orderly, and supports achieving of consensus in board decisions through skilled negotiation tactics. The board position is usually separate from that of the chief executive officer (CEO). The chairman of the board position can be either a non-executive (part-time) or executive (full-time) position.

A nomination committee may also support the search for a CEO. The CEO is an organization’s highest-ranking executive, making all major corporate decisions, ranging from day-to-day operations to managing company resources, and liaising between the board of directors and other executives. Also, a CEO often has a position on the board.

While the role of the CEO depends on the size, culture, and industry of the company, it is almost always full-time, in contrast with a chairman of the board, which may be part-time. In small companies, a CEO will take on a more hands-on role, making a range of lower-level choices, such as interviewing and hiring of staff. In larger (e.g., Fortune 500) companies, the CEO typically deals with macro-level strategy and directing overall growth, delegating more tasks to other managers. CEOs set the tone and the vision for their organization; as such, it is important that the nominating committee be deliberate when considering potential candidates.