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Corporate governance has evolved well beyond a once-a-year discussion about director nominations. In a recent episode of the Public Company Series Podcast, host Doug Chia explores how the nominating and corporate governance committee has become one of the most active and influential committees in today’s boardroom.
Podcast guests Lillian Tsu, a partner in Cleary Gottlieb Steen & Hamilton’s New York office, and Natalia Rezai, an associate in its San Francisco office, join the conversation. They discuss their chapter in Board Structure and Composition, published by the New York Stock Exchange and JPMorgan, and explain how the nominating and corporate governance committee has expanded its responsibilities and become central to building effective boards.
As Chia frames it, what was once simply the “nominating committee” now sits at the center of board composition, governance strategy, shareholder engagement, and oversight of emerging risks.
Core Requirements Start With Structure and Independence
At its foundation, the nominating and corporate governance committee operates under a written charter. That charter defines its responsibilities, authority, and scope, including one of its most visible duties: identifying and recommending director candidates.
“Increasingly, what we’ve seen the nominating and corporate governance committee do is really lead in board refreshment,” Tsu says. She emphasizes how introducing new members with diverse perspectives and expertise “really is a hallmark of a high-functioning board.”
Director independence remains another essential requirement. Rezai notes that while the committee doesn’t face the heightened independence standards applied to audit or compensation committees, boards must still affirm members have no material relationships with the company.
“You want to make sure you have unbiased directors,” Rezai explains, “that are really able to steer the committee and help steer the board in a way that’s fully aligned with the interests of shareholders.”
From Nominating to Governance: Why the Role Expanded
Over time, regulatory scrutiny and investor expectations have pushed the committee’s mandate well beyond nominations. As governance issues became more prominent after the passing of the Sarbanes-Oxley Act in 2002, exchanges formally expanded the committee’s remit to include corporate governance oversight.
“That expansion reflects a view that this is the right committee to really take the lead on corporate governance,” Tsu says. Shareholders increasingly see strong governance as “a hallmark of a well-functioning board and a well-functioning company.”
Rezai adds that shareholder engagement now sits squarely within the committee’s responsibilities. As activism rises, nominating and corporate governance committee members often participate directly in meetings with investors, particularly when those investors want board-level involvement.
“The committee has sort of assumed the role of helping companies steer in the shareholder engagement space,” Rezai says, especially when feedback points to concerns about board tenure, missing skill sets, or governance practices.
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ESG Oversight and a Growing List of Responsibilities
Environmental, social, and governance oversight has also landed with many nominating and corporate governance committees, particularly at companies without a standalone ESG committee.
“We’ve seen the committee take on a lot of ESG responsibilities,” Tsu notes, especially across governance issues and broader environmental and social topics. In many cases, the committee does the analytical work, meets with advisors, and brings recommendations to the full board.
As ESG becomes more sensitive and more scrutinized, this structure helps boards move efficiently. “It really assists the board in making those decisions because the committee has done all of the legwork,” Tsu says.
Onboarding, Skills Matrices, and Board Evolution
The committee’s influence begins even before a director joins the board. With nearly 30 percent of new S&P 500 directors in 2024 serving as first-time public company directors, onboarding is more critical than ever.
“The obvious first step is director onboarding,” Rezai says.
Committees now work closely with management to design onboarding programs that include briefings, site visits, and access to the right tools and information from day one.
At the same time, committees increasingly use skills matrices to assess existing board capabilities and identify gaps. “We need a board that will help us innovate,” Tsu says, noting how many companies are thinking about how to evolve from “Company 1.0” to “Company 2.0.”
That evolution increasingly includes technology and AI expertise, an area where many boards acknowledge gaps today.
Evaluations, Transparency, and Continuous Improvement
Board and committee evaluations have become another major focus. What once involved simple written questionnaires has evolved into more robust, and sometimes interview-based, assessments.
“Evaluations of the board and committees is 100 percent within the purview of the nominating and corporate governance committee,” Rezai says.
While written evaluations remain common, some boards now alternate with in-depth interviews conducted by internal teams or outside advisors to elicit more candid feedback.
Investors are paying close attention. Large institutional shareholders now expect boards not only to conduct evaluations, but also to disclose their processes and objectives.
A Committee as Busy as Any Other
One of the clearest takeaways from the discussion is how dramatically the committee’s role has evolved. Where nominating committees once met sparingly, today they meet as frequently as audit and compensation committees.
“They’re doing more than just nominating directors once a year,” Tsu says. “It really is a much more robust committee than it was 20 years ago.”
From board composition and succession planning to ESG oversight, shareholder engagement, and evaluations, the nominating and corporate governance committee now shapes how boards function, and how effectively they govern in a rapidly changing environment.
For boards looking to stay agile and resilient, that evolution isn’t optional. It’s essential.
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About The Author
- Ashley Merder is the Senior Manager of Brand Marketing at OnBoard, where she leads brand strategy, content, social presence, and creative direction. With over a decade of experience working alongside a nonprofit board, she brings a mission-driven perspective to B2B SaaS. Her work focuses on making strategy visible using clarity, discipline, and design to shape how the brand is understood, trusted, and experienced.
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