Full Definition
The Nominating and Governance Committee (often called the Nom/Gov Committee or NGC) is a standing board committee—typically entirely independent directors for public companies—responsible for identifying, evaluating, and recommending candidates for the board of directors, overseeing the company's corporate governance practices and policies, leading board and director evaluation processes, and managing CEO succession planning oversight. Public company listing standards require a nominating committee (or similar governance function) composed entirely of independent directors, with a charter specifying its responsibilities. For PE-backed companies, a nominating committee is less formalized but the governance functions it performs—director selection, board evaluation, CEO succession—are performed by the independent directors collectively or by the board chair. The committee's board candidate identification and evaluation process is particularly important as board composition becomes a governance differentiator. Board composition assessment involves analyzing current board capabilities against the company's strategic requirements—identifying skill gaps (a technology company without a cybersecurity or technology director), diversity gaps (insufficiently representative board across gender, ethnicity, and functional background), or tenure issues (directors who have served so long they may have become too embedded in current management thinking to provide fresh governance perspective). Candidate identification uses a variety of channels: governance-focused search firms, network referrals from existing directors, investor-suggested candidates, and directly identified candidates from industry research. Board evaluation is an increasingly prominent governance responsibility—most corporate governance guidelines now recommend annual board evaluations assessing the overall board's effectiveness, the contribution of individual directors, and specific governance process improvements. Well-run board evaluations use a combination of written questionnaires, structured peer interviews, and committee discussions to identify what the board does well and where governance improvements would benefit the company. The most effective evaluations are followed by specific improvement actions—not simply filed as documentation of process compliance.
FAQs
How is board diversity considered in director recruitment?
Board diversity—broadly defined to include gender, ethnicity, professional background, industry experience, functional expertise, and cognitive diversity—has become a significant priority in board composition, driven by investor pressure (large institutional investors like BlackRock, Vanguard, and State Street have explicit diversity expectations for portfolio company boards), regulatory requirements (SEC disclosure requirements for director diversity), and evidence that diverse boards make better decisions. The Nominating Committee's role is to define the skill matrix the board needs, identify candidates who fill specific gaps, and build a board that combines the right expertise with meaningful diversity.
What is a director 'skills matrix' and how is it used in board recruitment?
A skills matrix is a table mapping current board members against the capabilities the board needs to provide effective oversight and strategic guidance—typically including industry expertise, financial expertise, technology/digital expertise, operations experience, public company governance experience, international experience, and specific functional depth (HR, marketing, legal) relevant to the company's strategy. The matrix reveals gaps: skills the company needs at the board level that are not currently represented. These gaps define the requirements for the next director recruit. Skills matrices are increasingly included in annual proxy statements as part of board composition disclosure.
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