The Nomination Committee has long been viewed as the poorer relation of the Audit and Remuneration Committee. Peter Swabey, policy and research director at the ICSA: The Governance Institute, even calls it the “Cinderella Committee”. But now the tide appears to be turning, according to a recent report from EY and the ICSA.
The nomination committee – coming out of the shadows shows some “encouraging trends”, says Mala Shah-Coulon, an executive director in EY’s corporate governance team. “We found NomCos are looking deeper at identifying talent and future leaders, looking not just at board appointments but sometimes up to three levels below,” she says. “These committees are increasingly looking for interaction with talent, via things like board dinners and asking high-potentials to present on a topic.”
“Where the NomCo used to meet once a year, that is no longer the case,” she adds. “They are having to look further ahead and think about the skills needed to execute the strategy. They have to be linked to the strategy discussions. What does the strategy mean in terms of being able to deliver it at board and executive level?”
Helen Pitcher, chairman of Advanced Boardroom Excellence, agrees that she has also noticed nomination committees “moving to a much more mainstream and full-on role… It’s no longer the ad hoc committee that meets when board selection is required, but a more regular and central focus on the board across a range of key issues.”
This means that HR directors may well expect to see chairman and non-executive directors taking a more active interest in talent throughout the organisation, something Swabey says they should welcome. “A good-quality HR director would be welcoming the interest of the board in the executive pipeline and people development,” he says. “HRDs should be working closely with the company secretariat to ensure those seen as high-fliers get board exposure.”
The HR director should be pushing themselves into these important people-related conversations. “The NomCo is right in the wheelhouse of HR,” says Celia Baxter, former group HR director at outsourcing company Bunzl, who sits on two boards as an NED, including chairing nomination and remuneration committees. “Just as you wouldn’t expect the audit committee to go on without the head of internal audit or the FD, you shouldn’t expect NomCo or RemCo to go ahead without the HRD.”
However, Shah-Coulon says some board members still have a rather negative view of what HR can offer. “Some people we spoke to said they didn’t want to involve HR,” she says. “There needs to be a mindset shift in what HR offers and how HR interacts.”
