As we all know, ILA has set up, for a certain
number of years now, more than 20 working committees that are designed to help
members keep up with regulations, hot topics on governance matters as well as
upcoming trends. There are to date +200 ILA members involved in these working
Among these, the Nomination & Remuneration Committee and the Board Composition Committee, although coordinated centrally at ILA level, have been functioning in a rather parallel manner over the past few years.
The Nomination & Remuneration Committee has been focusing its work mainly on (i) the evolution of the roles, prerogatives and duties of nomination & remuneration committees, (ii) the evolution of regulations and recommendations issued by local and EU regulatory bodies, in both the FS and non-FS sectors, for both listed and non-listed companies and (iii) remuneration practices, benchmarks and analyses.
The ILA Effective Governance Guide on Remuneration and Nomination Committees (2021), the Interactive Terms of Reference (2021), or the 4th edition of the Report on the remuneration of non-executive directors (2022) were some of the deliverables produced by the Committee.
The scope of the Board Composition Committee has been built on two central elements: (i) raise awareness among boards of the benefits generated by a balanced board composition (in terms of experience, backgrounds, expertise, ideas, age, gender, etc.) and (ii) identify, prepare, mentor high-potential individuals as future board candidates beyond the typical field of view.
The Aspiring Directors Programme (ADP), a Partnership with INSEAD and the INSEAD Corporate Governance Centre to help high potential professionals prepare for their first mandate or the ILA Mentoring Programme, a 6-month formal journey pairing a group of Mentees with a group of highly experienced and well-reputed ILA member Mentors, were some of the outputs of the Committee.
While each committee has been so far quite successful in their work, deliverables and achievements, the close connection of the subjects that are being addressed on both sides calls today for closer collaboration and enhanced synergies.
Indeed, inasmuch as the Nomination & Remuneration Committee addresses, among others, challenges and issues linked with “nominations” within boards and specialized committees of the boards, the work of the Board Composition Committee seems here intrinsically like the other side of the same coin. Be it Nomination or Composition, it does come down to ensuring that today’s and tomorrow’s boards’ needs in terms of skills and experience (e.g. digital, sustainability, etc.) are being identified and met. And of course, in direct connection with this, the notion of diversity in its broader meaning lies at the very center of the conversation.
As a result, the ILA Executive Committee, in collaboration with each Committee Chair, has made the decision to merge both committees in order to foster a stronger focus and alignment. The Executive Committee has also decided to appoint two Co-Chairs, each one coming from one of the committees. Jean-Pascal Nepper, formerly Partner, Head of Banking and Head of HR Advisory at KPMG Luxembourg, has to date been appointed as one of the Co-Chairs.
Going forward, the joint committee members will hold their first physical meeting somewhere in June in order to get to know each other and identify and prioritize the subjects which will be further deployed, among these, to name just a few: definition of ESG metrics in the framework of the performance assessment process of executives, best practice on disclosures on remuneration policies for financial institutions, the gender pay gap, the notion of age limits for board directors, skills matrices for boards, potential collaboration with European Women on Boards (EWOB), local implementation of the EU directive on gender balance on boards, etc.
This first working session will also be the chance to appoint a second Co-Chair and make up the right name for this newly created committee.
Look out for upcoming news and updates!
Jean Pascal Nepper