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Nominating & governance committee

Defining the Nominating and Governance Committee Role

Defining the nominating and governance committee role requires broad brush strokes. Sometimes called the “nomination committee” or the “governance committee” or a combination of the two, this committee’s key responsibilities include shaping governance policies, planning for board and committee succession, recruiting and onboarding new directors, and driving board effectiveness through evaluations and education (often among many others).This may include maintaining board and company charters, influencing policies on ethics/compliance, and even taking on advancing ESG challenges.

Shareholder engagement (and the policies surrounding investors) are also increasingly falling under nominating and governance committee’s purview. Overseeing shareholder communication (whether through the proxy statement or investor proposals) is another common responsibility, especially with the heightened focus on shareholder relations as of late.

Issues the Nominating and Governance Committee Face

The issues the nominating and governance committee face are ever-expanding. Increasingly, these committees are under the gun as shareholders continue to push buttons around board effectiveness. Specifically, today’s institutional investors want to ensure that the right people are sitting around the board table, as Michelle Edkins, BlackRock’s Global Head of Investment Stewardship, explains: “It’s our key area of focus—this issue of board quality—because shareholders depend on boards to protect their interests in conversations we’re never going to be a part of…”

Indeed, as passive index investing continues to grow, the lifespan of today’s companies is shrinking. Disruptive technologies, emerging risks and new market entrants are usurping legacy companies that fail to innovate fast enough. This pace of change requires a diverse range of board skill sets and requires that boards are operating at peak performance—a challenge that begins with the nominating and governance committee.

Nominating and Governance Committee Resources

Diligent has several nominating and governance committee resources:

Board Assessments: The board assessment is a critical component of the board refreshment and succession planning process, as it allows boards to assess gaps and plan for the future. In our Board Evaluation Blog Series, we canvas topics ranging from overcoming obstacles to taking action on results.

Board Diversity and Recruitment: As companies navigate digital transformation, battle cyber threats, and market to a new generation of consumers, boards are finding that they need a diverse set of skills around the board table. Nominating and governance committees oversee the board succession planning process, typically with the help of a skills matrix to visualize alignment and gaps. We explored this topic in depth at our Directors’ Experience in Napa Valley: Board Refreshment & Resiliency: Navigating the Digital Era.

Nominating and Governance Committee Tools: The success of today’s nominating and governance committees requires having the right information at the right time. How does your board composition compare to your peers? What skill sets is the board lacking? What conflicts of interest might your investors have uncovered? Quick access to information helps board members identify governance red flags raised by shareholders and activists. Not only does Diligent Nominations put this comparative data at the board’s fingertips, but gives boards access to an extensive database of qualified board candidates.


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