SECTION 1: NC COMPOSITION

2 | Nominating Committee Guide 1.1 Introduction 1.1.1 Establishing a Nominating Committee (NC) is a key element of good corporate governance. An NC helps the Board to determine the size, structure, composition, requisite skills, membership and performance of the Board, as well as the appointment, independence, development and evaluation of the performance of its directors. To discharge this complex role efficiently, the Board must ensure that the NC is objective and effective. 1.1.2 This section covers the main requirements and leading practices relating to the composition of the NC as follows: • The NC structure, composition and authority. • The Terms of Reference (TOR) for the NC. • The independence and objectivity requirements of the NC. • The role of the NC in NC appointments. • The selection of NC members and NC Chairman. • The tenure of NC members. 1.2 Structure and Authority 1.2.1 The Board should establish an NC to make recommendations to the Board on matters such as director appointments; Board succession plans; process of evaluating the performance of the Board, its Committees and individual directors; training and development programmes for the Board; and determining the independence of directors 1 . 1.2.2 A stand-alone NC ensures that relevant issues receive due and adequate attention. Where companies are not large or complex and the Boards are small, the functions of the NC may be combined with those of another Committee, such as the Remuneration Committee (RC). If the Board decides to combine the functions of two or more Committees, it should ensure that the focus of the 1 MR 210(5)(f) and CR 406(3)(f). 1A-1