SMF13 Chair of Nominations Committee Hiring Guide

What Is the SMF13 Senior Management Function?

Senior Management Function 13 (SMF13), the Chair of the Nomination Committee, is the Senior Managers and Certification Regime (SMCR) function held by the non-executive director who chairs a regulated firm’s nominations committee. The holder is responsible for leading the committee’s oversight of board composition, director succession, the process by which senior appointments are made and the firm’s approach to board diversity. Because it is a Senior Manager Function, the person in the chair is approved by the regulator, carries a Statement of Responsibilities and is subject to the Senior Manager Conduct Rules in the same way as an executive Senior Manager.

One point is often misunderstood. At dual-regulated firms (banks, building societies, insurers and the larger investment firms supervised by both the PRA and the FCA), SMF13 is one of the functions the FCA designates and approves on its own. It is not a PRA function, unlike the Chair (SMF9) or the chairs of the risk, audit and remuneration committees (SMF10 to SMF12), which the PRA approves at those firms. That distinction matters when a firm is planning an appointment timetable, preparing the application and deciding which regulator it will be dealing with.

This guide explains the SMF13 role in depth: the regulatory framework, the changes made to the SMCR in April 2026 and the further reforms now out for consultation, the nominations committee’s mandate in practice, what regulatory approval involves and what the candidate profile looks like. It draws on the work Exec Capital does on nomination committee chair recruitment and wider board governance appointments across financial services.

The Chair of the Nominations Committee is one of the most forward-looking governance roles in a regulated firm. The holder is responsible not just for the board and senior management that exist today but for the 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 plans board succession ahead of need, identifies skills gaps before they bite and treats diversity of thought and background as a board-effectiveness question is providing genuine board leadership.

The role is also the governance position most directly connected to the quality of executive search. A nominations committee chair who is passive about how board searches are run, who accepts an overly narrow candidate pool, or who lets the board chair’s personal preferences override objective succession criteria will tend to produce a board that is less capable and less varied than the firm’s long-term interests require. Getting this appointment right shapes every board appointment that follows it.

Which Firms Need an SMF13?

Not every regulated firm has to appoint an SMF13, and the question of whether a firm has one is driven by its regulatory category rather than by whether it happens to have a nominations committee. Many smaller firms run a nominations committee, or handle nominations at full-board level, without the chair of that committee being a Senior Manager.

The function applies where the firm is required, or chooses within the scope of the rules, to have a nomination committee and falls into a category to which the SMF13 designation applies. In practice that means dual-regulated firms, where the FCA approves the role, and the largest solo-regulated firms within the enhanced tier of the regime, which carry a wider set of Senior Manager Functions than core or limited scope firms. The detailed rules sit in the FCA Handbook at SUP 10C, and a firm’s compliance function or legal adviser should confirm the position against the firm’s own permissions and category before an appointment is planned.

The thresholds for the enhanced tier were raised as part of the Phase 1 reforms, with the higher thresholds taking effect from July 2026. Firms that were close to the old thresholds should check whether they have moved out of the enhanced category, because that can change which board roles need approval. Equally, a firm that is growing quickly, launching new permissions or joining a group with a dual-regulated entity may find that a nominations chair who was previously an ordinary NED now needs to be approved as SMF13.

Where a firm does not need an SMF13, the governance questions in this guide still apply. Board composition, succession and the quality of appointment processes matter to every regulated firm, and the FCA’s fitness and propriety expectations apply to every Senior Manager the committee helps appoint. The difference is whether the person chairing that work holds personal regulatory accountability for it as a Senior Manager.

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 combined 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 refreshed at least annually and informed by the board’s performance review. The committee’s composition assessment informs every appointment decision: rather than replacing like for like when a director departs, the committee considers what the board most needs that it does not already have.

Director succession planning. The nominations committee maintains a succession plan for all board positions, executive and non-executive, covering both an emergency scenario (what happens 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 each Senior Manager Function 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 regulatory approval process.

Fitness and propriety oversight. The nominations committee oversees the firm’s assessment process for senior appointments: the governance through which the firm satisfies itself that candidates for executive and NED roles meet the regulators’ fitness and propriety criteria. This oversight usually extends beyond SMF-designated roles to the firm’s general approach to fitness and propriety for certified staff, so that the standard is consistent and well documented across the senior population.

Board diversity. The nominations committee is accountable for the firm’s board diversity policy and how it is put into practice. This includes setting objectives for board composition, designing search processes that produce varied candidate pools, and reporting on outcomes in the annual report. For listed firms there are formal disclosure requirements, and for all regulated firms the regulators treat board effectiveness, challenge and the avoidance of groupthink as supervisory matters, even though dedicated diversity and inclusion rules for regulated firms were not taken forward (see the next section).

In most firms, the nominations committee also has a hand in wider people governance at the top of the organisation: talent pipelines below board level, the development of internal candidates for executive roles, and the board’s own induction and training. The scope should be set out in the committee’s terms of reference and reflected in the SMF13 holder’s Statement of Responsibilities, so that there is no gap between what the committee is expected to do and what its chair is accountable for.

The FCA and PRA Diversity and Inclusion Framework

The regulatory position on diversity at UK regulated firms has moved several times in recent years, and nominations committee chairs need an accurate picture of where it stands now rather than where it was heading in 2023.

The FCA, PRA and Bank of England published a joint discussion paper, DP21/2, in 2021, followed in 2023 by parallel consultations (FCA CP23/20 and PRA CP18/23) proposing rules and expectations on diversity and inclusion in regulated firms, including data reporting and target-setting. In March 2025 both regulators confirmed they would not take those proposals further, citing the range of feedback, expected legislative developments and a wish to avoid adding burden. There is therefore no standalone FCA or PRA diversity and inclusion rulebook for regulated firms that the SMF13 holder must apply.

That does not make diversity a matter of choice for the nominations committee. Three sources of expectation remain. First, the regulators continue to treat a board’s ability to challenge management, its range of skills and its culture as part of governance supervision; a board that is narrow in background and experience is more exposed to groupthink, and that is a prudential and conduct risk in its own right. Second, for companies with listed equity, the UK Listing Rules require a comply-or-explain statement in the annual report against targets on women on the board, women in senior board positions and directors from an ethnic minority background, together with standardised tables of board and executive management data. These replaced the equivalent disclosures in the old Listing Rules when the new UK Listing Rules came into force in 2024. The nominations committee chair is usually the person who must explain any shortfall and what the board is doing about it. For a detailed treatment, the companion Board Diversity Appointments guide sets out the listing framework.

Third, the UK Corporate Governance Code 2024, which applies on a comply-or-explain basis to companies with equity shares in the commercial companies listing category and is used as a benchmark by many unlisted regulated firms, requires appointments and succession plans to be based on merit and objective criteria and, within that context, to promote diversity. The Code expects the annual report to describe the work of the nomination committee, including its approach to succession and the board’s diversity and inclusion policy, how it links to strategy and how it has been put into practice. The 2024 revision widened the language on diversity beyond gender and ethnicity and put more emphasis on reporting outcomes rather than describing policies.

Alongside the formal requirements, the FTSE Women Leaders Review and the Parker Review set voluntary targets for FTSE companies on women in leadership and ethnic diversity respectively. These are not legally binding, but proxy advisers and major institutional investors use them, and a nominations committee chair at a listed regulated firm will be expected to show progress or explain the gap.

The SMF13 Prescribed Responsibility and FCA Pre-Approval

SMF13 is defined by the job it describes: chairing the nomination committee. The scope of what the holder is accountable for is set out in their Statement of Responsibilities, which should reflect the committee’s terms of reference and be consistent with the firm’s Management Responsibilities Map where the firm is required to maintain one. Where a firm allocates any prescribed responsibilities to the SMF13 holder, those must be recorded in the Statement of Responsibilities too. Because the SMF13 holder is a non-executive, the allocation should be limited to oversight responsibilities that are consistent with the role, rather than executive accountabilities that properly belong with management.

In practice, the responsibilities that sit naturally with a nominations chair are oversight of board composition and the skills matrix, the succession plan for the board and senior management, the process for recruiting and assessing directors, board induction and development, and the board’s diversity policy. Drafting the Statement of Responsibilities carefully, and early, prevents later disputes about what the role does and does not cover. The guide to Statements of Responsibilities for board appointments covers what boards should settle before an SMF candidate is approached.

Approval for SMF13 follows the standard Senior Manager application process. The firm submits the application with the Statement of Responsibilities, and the regulator assesses the candidate against the fit and proper test: honesty, integrity and reputation; competence and capability; and financial soundness. For SMF13, the competence assessment will focus on the candidate’s experience of board governance, succession planning and appointment processes, and on evidence that they can provide meaningful independent oversight rather than simply administering a process. The FCA may interview candidates, particularly for first-time Senior Managers or where the firm’s circumstances are complex.

Regulatory references covering the previous six years are required, along with a criminal records check. Following the April 2026 reforms, a criminal records check for a Senior Manager candidate stays valid for longer before the application is submitted, and checks are no longer required for internal and intragroup moves; the FCA has also tightened its guidance on how quickly firms should respond to reference requests. Time taken for approval varies with the quality of the application, the candidate’s history and the regulator’s workload, and incomplete applications are the most common cause of delay. Firms should plan the appointment timetable around approval rather than assume a start date. For the wider application framework, SMF Roles: A Complete Guide provides the foundational reference.

SMCR Reform: What Has Changed and What Is Proposed

The SMCR is in the middle of the most significant review since it was introduced, and anyone planning an SMF13 appointment should understand both what has already changed and what is still only a proposal.

Phase 1: now in force

The FCA’s policy statement PS26/6 and the PRA’s companion policy statement PS12/26 set out the first package of changes, most of which took effect on 24 April 2026, with further elements following in July and September 2026. The changes that matter most for board appointments include:

• The 12-week rule. Where a Senior Manager leaves unexpectedly, the firm now has 12 weeks to submit an application for a replacement, rather than needing approval within that period, and a person covering the role can remain in post until the regulator decides. Anyone covering a Senior Manager role on this basis is subject to the Senior Manager Conduct Rules.
• Criminal records checks. A check for an SMF candidate now remains valid for longer before submission, and checks are not needed for internal or intragroup moves.
• Regulatory references. Revised guidance on response times and on the content of references, including that firms should not include adverse information based on unproven allegations.
• Statements of Responsibilities and Management Responsibilities Maps. Firms can submit changes to the FCA periodically in batches rather than each time, although they must still keep the documents up to date internally.
• Enhanced tier thresholds. Higher thresholds for the enhanced category, which can move some solo-regulated firms out of it.

For nominations committee chairs, the practical effect is more room to manage an unplanned departure properly. The committee can appoint a credible interim cover, run a proper search and submit a complete application without the old pressure to obtain approval inside the 12-week window.

Phase 2: proposed, not in force

On 22 October 2026 the FCA published CP26/37, its Phase 2 consultation, alongside a PRA consultation. Among other things, the FCA proposes moving a number of Senior Manager Functions from pre-approval to a notification model, under which the firm would assess and appoint the individual and notify the regulator rather than wait for approval. The functions the FCA proposes to treat this way include SMF5 and SMF10 to SMF15, which covers SMF13. The consultation closes on 22 January 2027, and parts of the package depend on legislation that was still going through Parliament when the consultation was published.

Until final rules are made and come into force, SMF13 remains a pre-approval function and firms must not let a candidate perform the role before approval, other than within the existing temporary cover arrangements. If a notification model is adopted, the regulatory burden of the appointment would shift further onto the firm. The committee would need to be confident in its own fitness and propriety assessment, its referencing and its documentation, because there would be no regulator approval step to catch weaknesses. A well-documented appointment process, of the kind described later in this guide, would become more important, not less.

The Nominations Committee Chair and Executive Search

The nominations committee chair has a direct governance relationship with the executive search firms used for board and senior management appointments. This relationship is more consequential than is often appreciated. The chair’s engagement with the search process, including the ability to challenge a narrow brief, to push for a broad longlist and to make sure the process is genuinely objective rather than pre-determined, is the main governance control over the quality and diversity of senior appointments.

Good nominations committee governance includes: a formal policy on the use of executive search firms, setting out expectations on the breadth of candidate longlists; review of the search brief before it is issued, so that it does not contain unjustified constraints; a clear process for the 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 oversight the role requires. The committee’s value is in the process as well as the outcome, and the Chair of the Nominations Committee is the governance owner of that process. Where the committee is appointing to a regulated role, the chair should also satisfy themselves that the search firm understands the regulatory dimension: the Senior Manager Function involved, the referencing and approval steps and what the Statement of Responsibilities will contain. Specialist board of directors recruitment for regulated firms is a different discipline from generalist board search for that reason.

The SMF13 Candidate Profile

Board governance experience. The Chair of the Nominations Committee needs substantial board-level governance experience, and ideally experience of nominations committee work at a comparable regulated firm. That provides the process knowledge, the succession planning instincts and the regulatory context the role requires. Candidates with general governance experience but limited nominations background will face a learning curve in their first year, which creates governance risk at exactly the moment the board is relying on them.

Executive search process knowledge. A nominations committee chair who understands how executive search works, including the difference between a genuinely broad longlist and a token one, when networks help and when an open process is better, and which interventions actually change the candidate pool, will provide much better oversight of appointment processes than one who treats executive search as a black box. Direct experience of commissioning and overseeing board searches is a genuine differentiator.

A credible record on diversity and inclusion. The chair’s credibility on diversity depends on their own record: in their executive career, their other board roles and their approach to the committee’s work. A chair with no track record of developing and appointing leaders from varied backgrounds will struggle to lead a board that is comfortable with its current composition towards a different one.

Relationship with the board chair and CEO. The nominations committee chair works most closely with the board chair, who typically leads major appointment processes, and the CEO, who has the strongest interest in the composition of the executive team. In many firms the board chair also chairs the nominations committee, and where that is the case the Code expects them not to chair it when it is dealing with their own succession. Where the roles are separate, the SMF13 holder needs to keep genuine independence from both while building the working relationships that make the process function. Where the relationship with the board chair is strong and trusting, the committee can provide effective governance without friction; where it is adversarial or distant, the committee’s effectiveness suffers.

Regulatory literacy. The SMF13 holder will oversee appointments to other Senior Manager Functions, so they need a working knowledge of the SMCR: which roles require approval, how Statements of Responsibilities and Management Responsibilities Maps fit together, what regulatory references involve and how the fit and proper test is applied. They do not need to be a regulatory specialist, but they must be able to ask the right questions of the company secretary, compliance and legal advisers.

Independence. As with all non-executive Senior Manager Functions, documented independence from management is a regulatory and governance requirement. The Code also expects a majority of the nomination committee to be independent non-executive directors, which in turn shapes who can chair it.

The general principles of NED selection apply as well. The guide on how to hire a non-executive director covers time commitment, overboarding, conflicts and the interview process in more detail.

Running the SMF13 Search and Compensation

SMF13 searches follow the same regulatory due diligence framework as other non-executive SMF appointments. The specific assessment areas are nominations governance experience and the candidate’s record on building balanced boards. The assessment should include a structured conversation about the candidate’s experience of managing board succession, their approach to the breadth of candidate pools in board searches, and their view of the firm’s current board composition and how it needs to develop.

A sound search usually runs through a sequence of steps: agreeing the brief and the Statement of Responsibilities in draft; mapping the market for candidates with relevant nominations and regulated board experience; an initial assessment against the brief; deeper interviews with the board chair, the senior independent director and other committee members; regulatory due diligence, including referencing and checks on the candidate’s regulatory history; and then the application itself. Each step should be documented, both because good governance requires it and because the regulator may ask how the firm satisfied itself that the candidate was fit and proper.

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 appointment, rather than formal approval, is a precondition for the appointment working.

On compensation, SMF13 is normally remunerated through a NED base fee plus a committee chair fee, set within the firm’s policy for non-executive fees and benchmarked against comparable firms by size, sector and regulatory complexity. The time commitment is driven by the board cycle and by appointment activity: a committee that meets a few times a year in a steady state can need considerably more of its chair’s time in a year with a CEO or Chair succession, and the letter of appointment should reflect that realistically. For benchmarking approaches, the guide to non-executive director fees in the UK sets out how fee structures are typically built.

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 misses the succession planning, skills assessment and diversity dimensions that make up most of the role’s value.

2. Appointing a candidate with no personal record on diversity. The chair’s credibility on board composition is directly related to their own record. A chair who has never actively developed or appointed leaders from varied backgrounds will not credibly lead the firm’s approach.

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

4. Working from out-of-date regulatory assumptions. The regulatory position has changed: the proposed regulated-firm diversity rules were dropped in 2025, the Phase 1 SMCR reforms took effect in April 2026 and further changes are under consultation. A candidate, or a firm, still working from the position as it stood a few years ago will make poor decisions about timetables, documentation and disclosure.

5. Leaving the Statement of Responsibilities until the end. Drafting the Statement of Responsibilities after the preferred candidate has been chosen often reveals disagreements about scope that should have been settled at the brief stage. It can also delay the application.

How Exec Capital Approaches SMF13 Appointments

Exec Capital runs SMF13 searches with regulatory due diligence, nominations governance assessment and a review of each candidate’s board-building record built into the process. Our specialist team handles the search, with Adrian Lawrence FCA overseeing each mandate, and we work with the firm’s company secretary and compliance function on the Statement of Responsibilities and the application so that the regulatory steps run alongside the search rather than after it.

The SMF13 appointment sits within our regulated board governance practice alongside the SMF9 Chair, SMF11 Chair of Audit Committee, SMF12 Chair of Remuneration Committee and SMF14 Senior Independent Director appointments. For firms building out a full board committee structure, the Board Construction Guide explains how these roles fit together, and our nominations committee chair search service sets out how we run the appointment itself.

The Nominations Committee and SMF Appointment Process Management

One of the most specifically regulated parts of the nominations committee’s work at an FCA-regulated firm is the management of the SMF appointment process: the governance that makes sure every Senior Manager appointment is made through a process that meets the regulators’ expectations on fitness and propriety assessment, regulatory references and Statement of Responsibilities preparation.

The nominations committee chair should maintain a formal protocol for SMF appointments that covers: the skills and experience criteria for each function; the due diligence process for assessing candidates’ regulatory history; the regulatory reference request and review process; the drafting and review of the Statement of Responsibilities; and the preparation and management of the application to the regulator. Where this protocol is documented and followed consistently, the approval process tends to run more smoothly and the firm can show the regulator how each decision was reached. If the proposals in CP26/37 are adopted, a protocol of this kind will be the main evidence that the firm has done its own assessment properly.

The committee also needs a clear approach to departures from Senior Manager roles, whether through resignation, removal or retirement. That includes deciding whether someone needs to provide temporary cover under the 12-week rule while the permanent replacement search runs, managing the regulatory notifications for the departure, providing regulatory references for the departing individual, and updating the Management Responsibilities Map and the relevant Statements of Responsibilities to reflect the transition. The guide to what the Senior Managers Regime means when recruiting at board level covers these steps from the board’s perspective.

Board Induction and Development Programmes

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

A well-structured induction programme for a new NED at a regulated firm should cover: the firm’s strategy, business model and competitive position; the regulatory framework, the firm’s specific obligations and its relationship with its supervisors; the SMCR accountability structure and the director’s own responsibilities; the board and committee governance processes; the firm’s risk profile, risk appetite framework and most significant current risks; and the key relationships the NED will need to build, with the CEO, CFO, CRO, the heads of compliance and internal audit, the external auditor and the regulators. This induction is better spread over the first few board cycles than delivered in a single overwhelming session.

Ongoing development, such as sessions on emerging regulatory topics, briefings from sector specialists, visits to operational sites and direct engagement with customers, keeps the board’s knowledge current and its oversight informed. The current SMCR reforms are a good example: a board that has not been briefed on what changed in April 2026 and what is proposed for 2027 is poorly placed to oversee its own Senior Manager appointments. The nominations committee chair should include board development planning as a standing item in the annual governance cycle and link it to the gaps identified in the board review.

The Chair Succession Planning Question

Succession planning for the board Chair is the nominations committee’s most sensitive responsibility. The incumbent Chair cannot lead their own succession, because the process is an inherent conflict of interest, and the Code expects the Chair not to chair the nomination committee when it is dealing with the appointment of their successor. In practice the process is usually led by the Senior Independent Director or by the SMF13 holder where the two roles are separate.

Good practice for Chair succession at a regulated firm includes: maintaining a standing assessment of internal NEDs who could serve as Chair; periodically reviewing 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 private equity owner (at PE-backed firms) on the Chair’s performance and the succession horizon; and setting a clear transition timetable that gives both the outgoing and incoming Chair adequate notice to manage the handover. The Code’s guidance on Chair tenure, which expects a Chair not to remain in post beyond nine years from first appointment to the board except for a limited period to support succession, should also be factored into the plan.

At dual-regulated firms the incoming Chair will need PRA approval as SMF9, with FCA consent, and the timing of that approval needs to be built into the plan. The way a Chair succession is managed is also a governance quality signal that regulators and institutional investors notice. A succession run 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 board composition, diversity and succession planning. Major institutional investors have clear views on board composition and on how firms report against the diversity targets in the Listing Rules, and they engage with the nominations committee chair to understand the rationale for specific appointments and the firm’s medium-term succession strategy.

The Investment Association’s Institutional Voting Information Service (IVIS) and the main proxy advisers publish voting guidance that covers board independence, diversity and overboarding, the risk that individual NEDs hold too many board roles to be effective. Investors and proxy advisers use that guidance when deciding how to vote on director elections, and the nominations committee chair may find their own re-election used as the vehicle for investor concerns about board composition.

The nominations committee chair should maintain a planned engagement programme with the firm’s major investors, rather than waiting for AGM season to have the board composition conversation. Engaging during the year on succession plans, diversity progress and the rationale for appointments gives investors context before they read the annual report, and gives the committee early warning of concerns. At PE-backed and mutual firms, the equivalent conversations are with the owner or with members’ representatives, but the principle is the same: those with a stake in the board’s composition should not be hearing about succession for the first time when it happens.

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-appointment briefing should include: the current board skills matrix and a candid assessment of the gaps; the tenure schedule, showing when each NED’s term expires and the succession status for each position; the current Senior Manager roster, with the Statements of Responsibilities and the Management Responsibilities Map; the most recent board review report; the firm’s diversity data and its progress against any targets; and the key external relationships the chair will need to manage, with the regulators, major shareholders and proxy advisers.

The first month should include individual meetings with every NED and executive director to understand their contributions, their development needs and their views on the board’s most significant composition gaps. These meetings are not only about building relationships. They are a form of governance audit that informs the incoming chair’s first priority-setting conversations with the board chair and CEO.

The new chair should also meet early with the company secretary, the head of compliance and the firm’s legal advisers to understand the SMCR appointment process in detail: the application requirements, regulatory reference obligations, Statement of Responsibilities and Management Responsibilities Map documentation and the realistic approval timetable. A briefing on the April 2026 changes and on the CP26/37 proposals should be part of this. This regulatory knowledge underpins the committee’s most consequential ongoing work, which is making sure that Senior Manager appointments meet the regulators’ 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 discipline: for board appointments the search firm works for the nominations committee, not for the CEO or the executive team, and the chair must maintain that independence throughout the search.

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 keeping direct, unmediated access to the search firm throughout, rather than routing all communications through the CEO’s office. The Code expects the annual report to explain the use of any external search consultancy and whether it has any connection with the company or individual directors, so the chair also needs a clear view of any conflicts.

The choice of search firm matters for the breadth of the candidate pool, as discussed in the Board Diversity Appointments guide. The nominations committee chair should assess the reach of a search firm’s candidate networks when selecting a partner for NED appointments, and ask for evidence, not just assurance, that the longlist process reaches beyond the usual networks. For regulated appointments, the chair should also ask how the search firm handles regulatory due diligence, how it identifies issues in a candidate’s history early, and how it works with the firm on the Statement of Responsibilities.

Board Succession Planning in Practice

Board succession planning is the nominations committee’s most strategically important work and the area most often underdeveloped. Many 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 urgent replacements rather than deliberate development.

Effective succession planning means keeping three horizons in view at once. The immediate horizon, the next six months, should identify any board members approaching the end of their term, any expected retirements or departures, and the planned completion of any searches already 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. The strategic horizon, three to five years, should consider what the firm’s strategy implies for the board’s future composition: what expertise will the board need as the firm’s markets, products and regulatory environment change?

Emergency succession scenarios, covering what happens if the CEO, Chair or a named Senior Manager leaves suddenly, should be documented and reviewed annually. For regulated firms, the emergency plan should answer the SMF coverage question directly: which executive or NED could provide temporary cover for each Senior Manager Function under the 12-week rule while a replacement is found and approved? Regulators expect firms to have considered this question and to have a credible answer. The guide to SMCR board succession planning covers how to build that plan.

Succession planning for the CEO. CEO succession is usually the most sensitive item on the committee’s agenda. The committee’s role, assessing internal candidates, overseeing the process and ultimately recommending the appointment to the full board, is one of the most consequential things it does. Many committees handle it poorly: by leaving the decision to the outgoing CEO, by running a process that is publicly open but privately pre-determined, or by failing to build an internal pipeline that would give the board a genuine internal option.

Good CEO succession planning includes: a regular discussion of internal candidates’ development and readiness, at least annually and without the CEO present; an honest assessment of whether there is a credible internal candidate for a planned succession; and a clear point at which an external search will start if the internal candidate will not be ready in time. Committees that delay this assessment until the CEO’s departure is imminent tend to find themselves making a rushed appointment from a position of weakness, often with an interim arrangement and an approval process running at the same time.

Onboarding the SMF13 Chair

Beyond the initial briefing, the Chair of the Nominations Committee’s first year should begin with a thorough review of the board’s current composition, term dates and succession plan status. The working pack should include: a skills matrix for the current board; term expiry dates for all current NEDs; any board searches underway or planned; the committee’s terms of reference; the firm’s board diversity policy; and any outstanding supervisory feedback on board composition, governance or succession planning.

The incoming chair should test whether the terms of reference, the Statement of Responsibilities and the committee’s actual work match. Gaps are common: a committee whose terms of reference refer to senior management succession but which only ever discusses the board, or a Statement of Responsibilities that describes oversight the committee has never exercised. Closing those gaps early protects both the firm and the chair personally, since the chair is accountable under the Senior Manager Conduct Rules for taking reasonable steps within their area of responsibility.

Early engagement with the firm’s search partners for board appointments is valuable: understanding which firms have been used, how well their longlists have performed and whether any relationships should be reviewed. The nominations committee chair has authority over the selection and engagement of search firms for board appointments, and exercising it actively, rather than ratifying the arrangements the board chair has made, is part of the role’s independent oversight. By the end of the first year, the chair should have presented the board with a refreshed skills matrix, an updated succession plan and a view on the committee’s priorities for the following year.

The SMF13 Chair and Board Effectiveness Reviews

The UK Corporate Governance Code expects an annual formal and rigorous review of the performance of the board, its committees, the Chair and individual directors, with FTSE 350 companies expected to have an externally facilitated review at least every three years. Many unlisted regulated firms follow the same approach as good practice, and supervisors take an interest in how boards assess their own effectiveness. The nominations committee chair typically plays a significant part, either commissioning and overseeing an external review or running the internal process.

The board review is a direct input to the committee’s succession planning. It identifies the skills gaps, behaviours and composition issues that future appointments should address. A nominations committee chair who treats the review as a separate exercise rather than an integral part of succession planning is missing one of the most useful tools available. The findings should be turned into specific actions: a change to the skills matrix, a brief for the next NED search, a development plan for an individual director, or a change to how the board runs its meetings. For how reviews work in practice, the companion guide on Board Effectiveness Reviews provides the relevant framework.

Further Reading and Authoritative Sources

The FCA’s page on the Senior Managers Regime lists the Senior Manager Functions, including those the FCA alone approves at dual-regulated firms, and links to the application forms and the rules in SUP 10C. The FCA’s PS26/6 and the PRA’s PS12/26 set out the Phase 1 changes that took effect from 24 April 2026.

The FCA’s Phase 2 consultation, CP26/37, sets out the proposals to move a number of functions, including SMF13, to a notification model. It is a consultation, not final rules, and firms should watch for the policy statement that follows.

The UK Corporate Governance Code 2024, Principle J and its supporting provisions, set out the Code’s expectations on appointments, succession and the nomination committee, and the FRC’s accompanying guidance covers board composition, succession planning and board reviews in practical terms. The FTSE Women Leaders Review and the Parker Review publish annual reports on women in leadership and ethnic diversity at FTSE companies, which nominations committee chairs at listed firms will be expected to know.

Professional bodies, including the Institute of Directors and the Chartered Governance Institute, run development programmes and publish guidance for committee chairs, and programmes that develop first-time NED candidates from under-represented groups are a useful source of longlist candidates for committees looking to widen their pipeline.

Frequently asked questions

Is SMF13 an FCA or a PRA function?

At dual-regulated firms, SMF13 is designated and approved by the FCA alone. The PRA approves the Chair (SMF9) and the chairs of the risk, audit and remuneration committees at those firms, but not the nominations committee chair.

Does every regulated firm need an SMF13?

No. It applies to dual-regulated firms and to solo-regulated firms in the enhanced tier of the SMCR. Core and limited scope firms can have a nominations committee without its chair being a Senior Manager. Firms should confirm their position against SUP 10C.

Has SMF13 become a notification-only role?

Not yet. The FCA’s CP26/37, published on 22 October 2026 and closing on 22 January 2027, proposes moving SMF13 and several other functions to a notification model. Until final rules are made and in force, SMF13 still requires pre-approval.

What changed for board appointments under the Phase 1 reforms?

The Phase 1 reforms (FCA PS26/6 and PRA PS12/26) changed the 12-week rule so that firms must submit, rather than obtain approval for, a replacement application within 12 weeks, relaxed criminal records check requirements, updated regulatory reference guidance and allowed batched submission of Statement of Responsibilities changes to the FCA.

Are there FCA or PRA diversity rules the nominations committee must follow?

The regulators decided in March 2025 not to proceed with their proposed diversity and inclusion rules for regulated firms. Listed firms still have Listing Rules diversity disclosures, and the UK Corporate Governance Code 2024 expects appointments to promote diversity and the annual report to explain the nomination committee’s approach.

Can the board Chair also chair the nominations committee?

Yes, and many do, but the Code expects the Chair not to chair the committee when it is dealing with the appointment of their own successor. Where the roles are combined, the firm should check which individual holds the SMF13 designation.