There should be a nomination committee which should lead the process for board appointments and make recommendations to the board. The committee could comprise the whole Board.
A majority of members of the committee should be independent non-executive directors. The chairman or an independent non-executive director should chair the committee, but the chairman should not chair the nomination committee when it is dealing with the appointment of a successor to the chairmanship.
The committee should:
- Be responsible for identifying and nominating for the approval of the board, candidates to fill board vacancies as and when they arise, save that appointments as chairman or chief executive should be matters for the whole board;
- Before making an appointment, evaluate the balance of skills, knowledge and experience on the board and, in the light of this evaluation, prepare a description of the role and capabilities required for a particular appointment;
- Review annually the time required from a non-executive director and assess whether the non-executive director is spending enough time to fulfil their duties;
- Consider candidates from a wide range of backgrounds;
- Give full consideration to succession planning in the course of its work, taking into account the challenges and opportunities facing the company and the skills and expertise needed on the board, reporting to the board regularly;
- Regularly review the structure, size and composition (including the skills, knowledge and experience) of the board and make recommendations to the board with regard to any changes;
- Keep under review the leadership needs of the organisation, both executive and non-executive, with a view to ensuring the continued ability of the organisation to compete effectively in the marketplace;
- Make a statement in the annual report about its activities; the process used for appointments and explain if external advice or open advertising has not been used; the membership of the committee, number of committee meetings and attendance over the course of the year; and
- Ensure that on appointment to the board, non-executive directors receive a formal letter or appointment setting out clearly what is expected of them in terms of time commitment, committee service and involvement outside board meetings
- Consider and make recommendations to the board about the re-appointment of any non-executive director at the conclusion of their specified term of office or retiring in accordance to the board on any matter relating to the continuation in office of any director at any time
This guidance has been based on that in the Combined Code. The Combined Code states that ICSA has agreed to produce updated guidance on its website www.icsa.org.uk in the future.
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