| The NC comprises at least three directors, the majority of whom, including the NC Chairman, are independent. The lead independent director (Lead ID), if any, is a member of the NC. |
A. Explanation
This Provision describes the composition of the NC.
The composition of the NC is as follows:
- A minimum of three directors.
- The majority of members including the NC Chairman should be independent.
- The Lead ID should be a member of the NC.
It is important that the majority of NC members are independent because its function is to ensure the independence and objectivity of individual directors and the Board collectively.
The Lead ID should also be a member of the NC as he would be active in matters relating to directorships. As a best practice, the Board should consider appointing the Lead ID to chair the NC.
B. Practice Guidance
C. Related Rules and Regulations
- Nil.
D. CG Guides
- NC Guide 1.1: Introduction [NC Composition].
- NC Guide 1.2: Structure and Authority [NC Composition].
- NC Guide 1.3: Terms of Reference [NC Composition].
- NC Guide 1.4: Independence and Objectivity [NC Composition].
- NC Guide 1.5: Role of NC in NC Appointments [NC Composition].
- NC Guide 1.6: Selection of NC Members [NC Composition].
- NC Guide 1.7: Selection of NC Chairman [NC Composition].
- NC Guide 1.8: Tenure of the NC members [NC Composition].
- NC Guide Appendix 1C: Sample NC Terms of Reference [NC Composition].
- NC Guide 3.4: Board Composition [Nomination and Appointment Process].
- NC Guide 4.6: The Lead Independent Director [Director Independence].
E. Related Articles
- “A good nominating committee can save a company” by Junie Foo. (73KB)
- “The nominating committee and its role in identifying directors for renewal and new appointments” by Kala Anandarajah. (112KB)
- “Best practice guide for nominating committees” by SID. (1.1MB)