SMF13 Chair of Nominations Committee Hiring Guide

What Is the SMF13 Senior Management Function?

Senior Management Function 13 — the Chair of the Nominations Committee — is the FCA-designated accountability for the independent oversight of a UK regulated firm’s board composition, succession planning, and board diversity governance. The SMF13 holder is a Non-Executive Director who carries personal regulatory accountability, under the Senior Managers and Certification Regime (SMCR), for the effectiveness of the nominations committee’s oversight of the board’s composition, the fitness and propriety assessment process for senior appointments, and the firm’s approach to board diversity.

This guide explains the SMF13 role in depth — the regulatory framework, the nominations committee’s mandate in practice, what FCA pre-approval requires, and what the candidate profile looks like. It draws on the work Exec Capital does on regulated firm board governance appointments across financial services and adjacent sectors.

The Chair of the Nominations Committee is one of the most forward-looking governance roles in a regulated firm — responsible not just for the board and senior management that exists today but for the board and senior management capability the firm will need over the next three to five years. A nominations committee that limits itself to managing departures and replacements is providing governance maintenance; one that proactively plans board succession, identifies skills gaps, and drives diversity as a strategic governance priority is providing genuine board leadership.

The Nominations Committee’s Governance Role

The nominations committee at a UK regulated firm carries oversight accountability across four interconnected areas.

Board composition and skills assessment. The nominations committee maintains a current view of the board’s aggregate skills, experience, independence, and diversity — and identifies the gaps that future appointments should address. This is not a one-time exercise; it is an ongoing assessment that should be updated annually and informed by the board’s effectiveness review. The nominations committee’s composition assessment informs every appointment decision: rather than simply replacing like-for-like when a director departs, the committee considers what the board most needs that it does not currently have.

Director succession planning. The nominations committee maintains a succession plan for all board positions — executive and non-executive — with both an emergency succession scenario (what if the CEO leaves unexpectedly tomorrow?) and a planned succession horizon (what does the board need to look like in three years, and how do we get there?). For regulated firms, the succession plan should specifically address how SMCR-designated functions will be covered in the event of an unplanned departure, and should identify the internal or external candidates who could step into each function within the FCA’s approval timeline.

Fitness and propriety oversight. The nominations committee oversees the firm’s fit and proper assessment process for senior appointments — the governance process through which the firm satisfies itself that candidates for executive and NED roles meet the FCA’s fitness and propriety criteria. This oversight extends beyond SMF-designated roles to the certification regime population, ensuring that the firm’s approach to fitness and propriety is robust and consistently applied.

Board diversity. The nominations committee is accountable for the firm’s board diversity policy and its implementation. This includes setting diversity targets for board composition, designing board search processes that produce diverse candidate pools, and reporting on diversity outcomes in the annual report. For regulated firms, the FCA’s and PRA’s expectations on diversity and inclusion — set out in their joint discussion paper DP21/2 and subsequent policy developments — create a supervisory dimension to the nominations committee’s diversity governance.

The FCA and PRA Diversity and Inclusion Framework

The regulatory expectation on board diversity at UK regulated firms has evolved significantly. The FCA and PRA’s joint diversity and inclusion framework — developed through consultation papers and supervisory statements — sets out expectations that go well beyond the minimum legislative requirements.

The FCA’s expectations include that firms should have a board diversity policy, that this policy should be published and explained, and that the nominations committee should be responsible for its implementation and effectiveness. For listed regulated firms, the FCA’s Listing Rules disclosure requirements under LR 9.8.6R(9) create specific gender and ethnicity representation targets with comply-or-explain obligations. The nominations committee chair is the person who must explain any deviation from these targets and demonstrate what the firm is doing to address the gap. For a detailed treatment of these listing requirements, the companion Board Diversity Appointments guide provides the full regulatory framework.

The Parker Review recommendations on ethnic diversity in FTSE leadership, the FTSE Women Leaders Review targets for women in senior leadership, and the Hampton-Alexander Review framework (now superseded by the FTSE Women Leaders Review) all set expectations that the nominations committee chair at a major regulated firm is expected to demonstrate progress against. These are not legally binding targets, but proxy advisers, major institutional investors, and the FCA treat failure to demonstrate active progress as a governance concern that reflects on the nominations committee’s effectiveness.

The SMF13 Prescribed Responsibility and FCA Pre-Approval

The prescribed responsibility attached to SMF13 is oversight of the firm’s policies for the recruitment, training, assessment, and succession planning of its directors — encompassing both the board and the senior management team. This is a broad accountability that goes beyond the nominations committee’s formal work to encompass the governance of the firm’s entire approach to developing and deploying its most senior talent.

The FCA pre-approval process for SMF13 follows the standard Form A framework, with a fitness and propriety assessment covering reputation, competence and capability, and financial soundness. The competence assessment for SMF13 will focus on the candidate’s experience of board governance, succession planning, and diversity leadership — specifically, evidence that the candidate can provide meaningful independent oversight of these functions rather than simply managing a compliance exercise. The regulatory reference requirement covering six years of employment history applies as to all SMF functions.

The application timeline is typically 12–16 weeks for a clean application. The firm’s Statement of Responsibility for the SMF13 holder should accurately reflect the prescribed responsibility scope and should be consistent with the Management Responsibilities Map. Legal counsel input on the SoR before it is presented to the candidate is standard. For the full application framework, the SMF Roles: A Complete Guide provides the foundational reference.

The Nominations Committee Chair and Executive Search

The nominations committee chair has a direct and important governance relationship with the executive search firms the firm uses for board and senior management appointments. This relationship is more consequential than is often appreciated: the nominations committee chair’s engagement with the search process — their ability to challenge a narrow brief, to push for a diverse longlist, and to ensure that the process is genuinely objective rather than pre-determined — is the primary governance control over the quality and diversity of senior appointments.

Best practice nominations committee governance includes: a formal policy on the use of executive search firms, specifying diversity requirements for candidate longlists; oversight of the search brief before it is issued, to ensure it does not contain unjustified constraints that limit diversity; a clear process for the nominations committee to receive and consider the full longlist before the shortlist is formed; and a formal debrief from the search firm after each appointment to review what worked and what could be improved.

Nominations committee chairs who leave the search process entirely to the board chair and CEO, receiving only the final shortlist for approval, are not exercising the independent governance oversight that the role requires. The nominations committee’s value is in the process, not just the outcome — and the Chair of the Nominations Committee is the governance officer of that process.

The SMF13 Candidate Profile

Board governance experience. The Chair of the Nominations Committee needs substantive board-level governance experience — specifically, experience of nominations committee work at a comparable regulated firm. This provides the process knowledge, the succession planning instincts, and the FCA/PRA regulatory context that the role requires. Candidates with general governance experience but limited nominations-specific background will face a learning curve in their first year that creates governance risk.

Executive search process knowledge. The nominations committee chair who understands how executive search works — the difference between a broad longlist and a tokenistic one, the validity of using networks versus open processes, the specific diversity interventions that produce candidate pool change — will provide significantly better oversight of the firm’s appointment processes than one who views executive search as a black box. Direct experience of commissioning and overseeing board searches is a genuine differentiator.

Diversity, equity and inclusion credentials. The nominations committee chair’s credibility on diversity governance depends on their own demonstrated commitment to it — in their career, their other board roles, and their approach to the nominations committee’s work. A Chair who has no track record of advancing diverse leadership in previous roles will struggle to credibly champion board diversity against the preferences of a board that is comfortable with its current composition.

Relationship with the board chair and CEO. The nominations committee chair works most closely with the board chair — who typically chairs major appointment processes — and the CEO, who has the strongest interest in the composition of the executive team. The SMF13 holder needs to maintain genuine independence from both while building the collaborative relationships that make the governance process function. Where the board chair and the nominations committee chair have a strong, trusting relationship, the nominations committee can provide effective governance without dysfunction; where the relationship is adversarial or distant, the committee’s effectiveness is significantly compromised.

Independence. As with all SMF NED functions, documented independence from management is a regulatory and governance requirement.

Running the SMF13 Search and Compensation

SMF13 searches follow the same regulatory due diligence framework as all SMF NED appointments. The specific assessment dimension is nominations governance expertise and diversity leadership credentials. The assessment should include a structured conversation about the candidate’s experience of managing board succession planning, their approach to diversity in board search processes, and their view of the firm’s current board composition and what it needs to develop.

Board chair involvement in the SMF13 assessment is particularly important — because the nominations committee chair will work most closely with the board chair on board governance and succession. The board chair’s genuine endorsement of the SMF13 appointment, rather than formal approval, is a prerequisite for the appointment’s effectiveness.

SMF13 NED fees at mid-size regulated firms typically run from £40,000 to £70,000 per annum. The nominations committee meets three to four times per year in the absence of major succession activity, with significant additional time commitment when board appointments are live. Total time commitment is typically 20–30 days per annum in a steady state, rising substantially in active appointment years.

Common Hiring Mistakes

1. Treating the nominations committee as a process function rather than a governance leadership role. A nominations committee chair who sees the role as managing the replacement of departing directors is missing the succession planning, skills assessment, and diversity leadership dimensions that constitute the majority of the role’s governance value.

2. Appointing a candidate with no personal diversity track record. The nominations committee chair’s credibility on diversity is directly related to their own demonstrated commitment. A Chair who has never proactively advanced diverse leadership in their own career will not credibly govern the firm’s diversity approach.

3. Allowing the board chair to dominate the nominations process. Where the board chair has strong personal preferences on appointments and the nominations committee chair defers to them, the independence of the nominations governance is compromised. The roles should be complementary but genuinely separate, with the nominations committee providing objective oversight of the process rather than ratifying the board chair’s choices.

4. Neglecting FCA/PRA regulatory diversity expectations. Regulated firms face specific supervisory expectations on diversity governance that go beyond the UK Corporate Governance Code’s requirements. The SMF13 holder needs to understand these regulatory expectations and to ensure the nominations committee’s work demonstrates active compliance.

How Exec Capital Approaches SMF13 Appointments

Exec Capital runs SMF13 searches with regulatory due diligence, nominations governance assessment, and diversity track record review built into the process. The SMF13 appointment sits within our regulated firm board governance practice alongside the SMF9 Chair, SMF11 Chair of Audit Committee, and SMF12 Chair of Remuneration Committee. For firms building out a full board committee governance structure, the Board Construction Guide provides the framework for how these roles fit together.

The Nominations Committee and SMF Appointment Process Management

One of the most specifically regulated functions of the nominations committee at an FCA-regulated firm is the management of the SMF appointment process — the governance that ensures every Senior Manager Function holder appointment is made through a process that meets the FCA’s expectations on fitness and propriety assessment, regulatory reference checking, and Statement of Responsibility preparation.

The nominations committee chair at a regulated firm should maintain a formal protocol for SMF appointments that covers: the skills and experience criteria for each SMF function, the due diligence process for assessing candidates’ regulatory history, the regulatory reference request and review process, the Statement of Responsibility drafting and review process, and the FCA Form A submission and management process. Where this protocol is documented and consistently followed, the FCA pre-approval process is typically smoother and the firm’s governance around SMF appointments is demonstrably robust.

Where the nominations committee chair also has to manage a departure from an SMF function — whether through resignation, removal, or retirement — the committee should ensure that the departure process is managed in a way that preserves governance continuity. This includes assessing whether an interim SMF holder needs to be appointed while the permanent replacement search runs, managing the FCA notification requirements around departures, and updating the firm’s Management Responsibilities Map and the departing SMF holder’s Statement of Responsibilities to reflect the transition period.

Board Induction and Development Programmes

The nominations committee chair has governance responsibility for the quality of the board’s development programme — not just the initial induction of new directors but the ongoing learning and development of the board as a collective governance body. High-performing trustee and NED boards invest in their own development as seriously as they expect the management team to invest in theirs.

A well-structured board induction programme for a new NED at a regulated firm should cover: the firm’s strategic plan, its business model, and its competitive context; the regulatory framework, its specific obligations, and the FCA/PRA supervisory relationship; the SMCR accountability structure and the individual director’s prescribed responsibilities; the board and committee governance processes; the firm’s risk profile, its risk appetite framework, and the most significant current risks; and the key relationships — with the CEO, the CFO, the CRO, the external auditor, and the relevant regulators — that the NED will need to navigate. This induction should be structured over the first three to four board meetings rather than delivered in a single overwhelming session.

Ongoing board development activities — sessions on emerging regulatory topics, presentations by sector experts on market trends, visits to the firm’s operational sites, and engagement with the firm’s beneficiaries or customers — maintain the board’s contextual knowledge and governance engagement at the level required for effective oversight. The nominations committee chair should include board development planning as a standard agenda item in the annual governance cycle.

The Chair Succession Planning Question

Succession planning for the Board Chair is the nominations committee’s most sensitive governance responsibility. The incumbent Chair cannot lead their own succession planning — the process is inherently a conflict of interest — and the nominations committee must manage it independently, typically under the leadership of the Senior Independent Director.

Best practice for Chair succession planning at a regulated firm includes: maintaining a standing assessment of internal NED candidates who have the potential to serve as Chair; periodically scanning the external market for Chair-calibre candidates to understand the available pool; engaging with the Senior Independent Director and major shareholders (at listed firms) or the PE house (at PE-backed firms) on their views on the Chair’s performance and the succession horizon; and establishing a clear timeline for the transition that gives both the outgoing Chair and the incoming Chair adequate notice to manage the handover well.

The FCA’s governance expectations on Chair succession at regulated firms are implicit in the broader fitness and propriety framework — the incoming Chair must meet the SMF9 criteria — but the process by which the succession is managed is a governance quality signal that the FCA and institutional investors observe closely. A Chair succession that is managed through a structured, transparent, and well-documented process demonstrates governance maturity; one that produces an outcome without a visible process does not.

Nominations Committee Interaction with Investors and Governance Bodies

At listed regulated firms, the nominations committee chair is increasingly an active participant in investor engagement — particularly on the topics of board composition, diversity, and succession planning. Major institutional investors have specific views on board composition adequacy and diversity targets, and they engage directly with the nominations committee chair to understand the governance rationale for specific appointments and the firm’s medium-term board succession strategy.

The Investment Association’s Principles of Remuneration (for executive pay governance) have been accompanied by growing expectations on board composition governance from the same investor base. The IVIS (Investment Association’s Institutional Voting Information Service) guidance on board composition provides the investor community’s specific expectations on independence, diversity, and overboarding (the governance risk of individual NEDs holding too many board appointments simultaneously to be effective).

The nominations committee chair should maintain an active engagement programme with the firm’s major investors — not waiting for AGM season to have the board composition conversation but engaging proactively on succession plans, diversity progress, and the governance rationale for specific appointments throughout the year. Investors who are informed about the nominations committee’s work before the AGM are consistently more supportive in their voting than those who receive the governance narrative for the first time in the annual report.

Onboarding the SMF13 Chair of Nominations Committee

The incoming Chair of the Nominations Committee needs structured access to the full board governance picture before they can be effective. The pre-boarding briefing should include: the current board skills matrix and a candid assessment of the gaps; the tenure schedule — when each current trustee’s or NED’s term expires, and the succession planning status for each position; the current SMF holder roster and the fitness and propriety assessment status for each; the most recent board effectiveness review report; the firm’s diversity reporting data and its progress against targets; and the key governance relationships — with the FCA/regulators, with major shareholders, and with the proxy advisers — that the nominations committee chair will need to manage.

The first 30 days should include individual meetings with every current NED and executive director to understand their individual governance contributions, their development needs, and their views on the board’s most significant composition gaps. These meetings are not just relationship-building — they are a governance audit that informs the incoming Chair’s first priority-setting conversations with the board chair and CEO.

The nominations committee chair should also meet early with the firm’s legal counsel to understand the SMCR appointment process in detail — the Form A submission requirements, the regulatory reference obligations, the SoR and MRM documentation, and the FCA approval timeline. This regulatory governance knowledge is the foundation of the nominations committee’s most consequential ongoing work: ensuring that SMF appointments meet the FCA’s standards at every stage.

Working with Executive Search Firms

The nominations committee chair manages the relationship with the external search firms used for NED and executive director appointments. This relationship requires governance discipline: the search firm works for the nominations committee, not for the CEO or the executive team, and the nominations committee chair must maintain that independence throughout the search process.

Effective governance of the external search relationship includes: approving the search brief before outreach begins (not after a longlist has been developed); receiving the full longlist rather than a curated shortlist; ensuring the assessment criteria are applied consistently across all candidates and not adjusted during the process; and maintaining direct, unmediated access to the search firm throughout — not routing all communications through the CEO’s office.

The choice of search firm matters for diversity outcomes, as discussed in the Board Diversity Appointments Guide. The nominations committee chair should specifically assess the diversity of the search firm’s candidate networks when selecting a partner for NED appointments, and should require evidence — not just assurance — that the longlist construction process reaches genuinely diverse candidate communities.

Board Succession Planning in Practice

Board succession planning is the nominations committee’s most strategically important work and the most frequently underdeveloped. Many nominations committees manage succession reactively — responding to departures and vacancies rather than anticipating them — with the result that the board’s composition evolves through a series of emergency replacements rather than deliberate development.

Effective succession planning requires maintaining a current view of three planning horizons simultaneously. The immediate horizon — the next six months — should identify any board members approaching their term limits, any anticipated retirements or departures, and the planned completion of any searches currently underway. The medium-term horizon — one to three years — should map the term expiry dates of all board members, the skills and diversity implications of those departures, and the pipeline of candidates being developed for future appointments. The strategic horizon — three to five years — should consider what the firm’s strategic direction implies for the board’s future composition: what expertise will the board need as the firm’s commercial environment evolves?

Emergency succession scenarios — what happens if the CEO, Chair, or a named SMF holder leaves suddenly — should be documented and reviewed annually. For regulated firms, the emergency succession plan should specifically address the SMF coverage question: which executive or NED could provide temporary or interim coverage of each SMF function while a replacement is appointed and FCA-approved? The FCA’s expectations on succession planning include that firms have considered this question and have a credible answer.

Succession planning for the CEO. CEO succession is typically the most sensitive item on the nominations committee’s agenda. The nominations committee’s role in CEO succession — assessing internal candidates, providing governance oversight of the succession process, and ultimately recommending the appointment to the full board — is one of the most consequential governance activities the committee performs. Many nominations committees handle CEO succession poorly: either by leaving the decision entirely to the outgoing CEO, by running a process that is publicly acknowledged to be internal but privately pre-determined, or by failing to maintain an adequate internal pipeline that would give the board a genuine internal option.

Best practice CEO succession planning includes: a regular discussion of internal candidates’ development and readiness (at least annually, without the CEO present); an honest assessment of whether there is a credible internal candidate for a planned succession; and a clear timeline for when an external search should be initiated if the internal candidate is not ready in time. Nominations committees that delay this assessment until the current CEO’s departure is imminent consistently find themselves making a forced, rushed appointment from a position of weakness.

Onboarding the SMF13 Chair

The Chair of the Nominations Committee’s onboarding should begin with a thorough review of the board’s current composition, term dates, and succession plan status. The pre-appointment briefing should include: a skills matrix for the current board; the term expiry dates for all current NEDs; any board searches currently underway or planned; the nominations committee’s terms of reference; the firm’s board diversity policy; and any outstanding FCA or PRA supervisory comments on board composition or succession planning.

The incoming Chair should also meet individually with each current board member — not just the board chair and CEO, but each NED — to understand their perspective on the board’s composition needs, the culture of the board, and any succession concerns they are aware of. These conversations will give the incoming Chair a textured view of the board’s dynamics that cannot be obtained from documents alone.

Early engagement with the firm’s preferred executive search partners for board appointments is valuable: understanding which firms have been used, what their track record has been on diversity, and whether there are search relationships that should be reviewed or refreshed. The nominations committee chair has governance authority over the selection and engagement of executive search firms for board appointments, and exercising this authority actively — rather than simply ratifying the arrangements the board chair has established — is part of the role’s independent oversight function.

The SMF13 Chair and Board Effectiveness Reviews

The UK Corporate Governance Code requires listed companies to conduct an annual board effectiveness review, with an external review at least every three years. For FCA-regulated firms, equivalent expectations are set out in FCA supervisory guidance. The nominations committee chair typically plays a significant role in the board effectiveness review — either commissioning and overseeing an external review, or managing the internal review process.

The board effectiveness review provides a governance input directly relevant to the nominations committee’s succession planning work: it identifies the skills gaps, behavioural dynamics, and composition issues that the nominations committee should prioritise in future appointments. A nominations committee chair who treats the board effectiveness review as a separate governance process rather than as an integral input to succession planning is missing one of the most valuable governance tools available to them. For context on how board effectiveness reviews work in practice, the companion guide on Board Effectiveness Reviews provides the relevant framework.

Further Reading and Authoritative Sources

The FCA and PRA’s Discussion Paper DP21/2 on Diversity and Inclusion in the Financial Sector sets out the regulators’ expectations on board and senior management diversity at regulated firms. The subsequent policy developments — including the FCA’s Policy Statement PS23/10 — provide the current regulatory framework for nominations committee diversity governance.

The FTSE Women Leaders Review publishes annual data on women in senior leadership at FTSE 350 companies, including nominations committee-specific data on how boards are approaching succession planning and diversity in their appointment processes. The Parker Review annual update provides equivalent data on ethnic diversity in FTSE board leadership.

The UK Corporate Governance Code Principle J and its supporting provisions set out the governance code requirements for nominations committees. The FRC’s Guidance on Board Effectiveness provides practical guidance on board composition assessment and succession planning that the nominations committee chair should use as a reference framework.

On board succession planning specifically, the Non-Executive Directors’ Association (NEDA) and the Institute of Directors Board Development programmes provide professional development resources for nominations committee chairs building board succession frameworks. The Gateway to the Boardroom programme and similar initiatives develop diverse NED candidates who are approaching their first board appointment — a pipeline that nominations committee chairs should be aware of and draw from in their longlist construction. The Women on Corporate Boards network provides connection to senior women executives available for NED appointments across sectors.

Related Exec Capital guides: SMF Roles: A Complete Guide · SMF11 Chair of Audit Committee · SMF12 Chair of Remuneration Committee · Board Diversity Appointments · Board Construction Guide · Financial Services Executive Hiring