Design Nominating Governance Committee Charter

---
name: design-nominating-governance-committee-charter
description: Use when a public company is establishing or reviewing its nominating and corporate governance committee — the body responsible for board candidate identification, board composition planning, and oversight of the company's overall governance practices — writing a formal charter that separates this function from the audit and compensation committees rather than leaving governance oversight informally absorbed into another committee's mandate.
source: NYSE Listed Company Manual Section 303A.04; NACD (National Association of Corporate Directors) nominating and governance committee guidance
tags: [law, corporate, nominating-committee, governance-committee, board-composition, corporate-governance]
related: [design-board-independence-standard, design-audit-committee-charter, design-committee-charter-framework]
---

# Design Nominating/Governance Committee Charter

Establish a nominating and corporate governance committee with a formal charter separating board candidate identification and overall governance oversight from the audit and compensation committees' mandates — rather than leaving governance oversight informally absorbed into another committee.

## Why This Is Best Practice

**Adopted by:** The NYSE Listed Company Manual (Section 303A.04) requires listed companies to maintain a nominating/corporate governance committee composed entirely of independent directors with a written charter, and the National Association of Corporate Directors documents this committee as the standard third pillar of board committee structure alongside audit and compensation committees.
**Impact:** Boards without a dedicated nominating/governance committee are documented to experience less disciplined board composition planning and succession — board candidate identification tends to happen reactively, driven by whichever director departs, rather than through the proactive skills-gap analysis a dedicated committee is positioned to maintain on an ongoing basis.
**Why best:** Folding governance oversight and board candidate identification into the audit or compensation committee's already full agenda means neither function receives dedicated, ongoing attention — a separate committee with its own charter and meeting cadence is what ensures board composition planning and governance policy oversight actually happen proactively rather than being crowded out by other committees' primary responsibilities.

Sources: NYSE Listed Company Manual, Section 303A.04; National Association of Corporate Directors (NACD), nominating and governance committee guidance

## Steps

### Step 1: Confirm independence composition requirements

Confirm the committee is composed entirely of independent directors per the applicable listing standard, consistent with the board's general independence framework (see `design-board-independence-standard`).

### Step 2: Define the committee's board composition planning responsibility

Define the committee's ongoing responsibility for board composition planning — maintaining a skills matrix identifying gaps in the current board's expertise, and proactively identifying candidates to fill those gaps before a vacancy forces a reactive search.

### Step 3: Define the committee's governance policy oversight responsibility

Define the committee's responsibility for overseeing the company's overall governance policies and practices — corporate governance guidelines, director orientation and continuing education, and periodic board self-assessment — distinct from the audit committee's financial-reporting-specific mandate.

### Step 4: Define the committee's role in the director nomination process

Define the committee's specific role in identifying, vetting, and recommending director candidates to the full board for nomination, including its authority (or lack thereof) to engage external search firms independently.

### Step 5: Document the charter and review it periodically

Document all of the above in a formal, written charter, and review the charter periodically to confirm it remains aligned with the committee's actual operating practice, consistent with the general committee charter discipline described in `design-committee-charter-framework`.

## Rules

- Compose the committee entirely of independent directors, consistent with applicable listing standards.
- Give the committee explicit, ongoing responsibility for proactive board composition planning — not only reactive vacancy-filling.
- Separate governance policy oversight from the audit committee's financial-reporting-specific mandate.
- Document the charter formally and review it periodically for continued alignment with actual practice.

## Examples

**Proactive composition planning preventing a reactive scramble:** A nominating/governance committee's ongoing skills-matrix analysis identifies a gap in cybersecurity expertise well before any current director's term is expiring, allowing the committee to source and vet qualified candidates methodically rather than under the time pressure of an unexpected departure.

**Governance oversight properly separated from audit committee:** A company's governance guidelines review (board self-assessment process, director orientation program) is handled by the nominating/governance committee rather than added to the audit committee's already-full financial-reporting agenda, ensuring both functions receive dedicated attention.

## Common Mistakes

- **Folding governance oversight into the audit or compensation committee's agenda rather than establishing a dedicated committee** — this tends to crowd out proactive attention to either function.
- **Limiting the committee's board composition role to reactive vacancy-filling** — proactive skills-gap analysis and candidate identification ahead of an actual vacancy produces a stronger, more deliberate board composition process.
- **Leaving the committee's charter undocumented or unreviewed** — an undocumented mandate tends to drift or be interpreted inconsistently as committee membership changes over time.

## When NOT to Use

- For a "controlled company" under applicable listing standards, which may qualify for exemption from the independent nominating/governance committee requirement.
- For a private company with no public listing — the practice's underlying principle (dedicated, proactive board composition oversight) may still be valuable, but the specific listing-standard requirement doesn't apply.
- As a substitute for the board's own independence and diversity policy work — this committee typically executes that policy; see `design-board-independence-standard` and `design-board-diversity-policy` for the underlying substantive standards.

> **Legal disclaimer:** This skill encodes professional best practices for educational purposes. It is not legal advice. Board committee structure requirements vary by exchange listing and jurisdiction — consult licensed securities counsel before finalizing committee charters.