Nominations Committees Play a Crucial Role

Cape Times (South Africa), October 9, 2019 | Go to article overview

Nominations Committees Play a Crucial Role


NOMINATIONS committees play a key role in ensuring a board has the right skills, now and in the future.

There's a growing belief that their role will expand.

If talent is any organisation's greatest asset, and if the tone is set at the top, then who sits on the governing body of the organisation is clearly a matter of great importance.

That is why governance codes - and the King IV report on Corporate Governance for South Africa is no exception - recommend that a dedicated committee be put in place to oversee this critical function.

King IV recommends that all the members of the nominations committee should be non-executive members of the governing body, with the majority being independent.

King IV also suggests that the chairperson should be a member of the nominations committee.

The code furthermore recommends the following focus oversight areas for this committee: The process for nominating, electing and appointing members of the governing body; succession planning in respect of governing body members; and evaluation of the performance of the governing body.

It's perhaps worth remembering here that the principle of proportionality should be used to adapt these recommendations to a particular organisation's circumstances. Thus, the role of the nominations committee could be fulfilled by the board as a whole, or another of its subcommittees - the important thing is that the desired outcomes are achieved.

In line with King IV's general approach, it recommends that the process for election of non-executive directors should be both formal and transparent, and that nominations should be approved by the board as a whole.

An important part of this process is a rigorous due diligence process to ascertain that prospective governing body members have the skills the board as a whole needs at that particular point in time.

It is also vital that candidates undertake the same exercise to ensure the organisation is sound and ethical, and that its aims resonate with them.

When looking at the skills needed, nominations committees should not focus solely on the technical or professional skills required. …

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