Roles of nomination committees - FAB/P1

Nomination committees have a number of roles which mainly involve dealing with the board. Gaps, diversity, balance, succession planning and size of board could be the key words to remember.

Gaps
They identify the gaps in current board's skills and ensure that such gaps are filled.

Diversity
They should ensure that the board members are well-diversified, for example in terms of background, age, gender and so on. This will be helpful in the way that more different ideas could be generated in deciding on a strategy.

Balance
They should ensure that executive and independent non-executive directors (excluding chairman) are balanced. Therefore, the number and types of NEDs are determined by the nomination committees.

Succession planning
They should have a plan for continuity of the retiring directors, ie. there should be someone prepared to replace the retiring directors.

Size of board
They determine the optimal size of the board for the company, taking into account the complexity of the strategies to be undertaken.

You can add one more role. Nomination committees will also recommend on the re-appointment of the directors who are due for re-election. They would take into account the contributions made by the directors to arrive at a conclusion.