CFA Level I · CFA Level I Exam · Corporate Governance: Conflicts, Mechanisms, Risks, and Benefits
Which of the following board committees is most likely responsible for recommending candidates for board vacancies and assessing the board's overall composition?
The nominations committee is responsible for recommending director candidates and reviewing board composition. It evaluates the skills, independence and diversity needed on the board. The audit committee focuses on financial reporting and audit oversight, and the remuneration committee focuses on executive pay.
- AAudit committee
- BNominations committeeCorrect
- CRemuneration committee
Explanation
The nominations (governance) committee identifies and recommends director candidates and reviews board size, skills and diversity. The audit committee oversees financial reporting and the external auditor. The remuneration committee sets executive and director pay.
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