The impact of nomination commitees on new directors – SMS 2008

This research paper examines the impact of the creation of nomination committees on the characteristics of newly recruited directors. We hypothesize a positive relationship between the creation of a nomination committee and the likelihood of appointment of directors having a reputation of being “active”. We further suggest that this relationship is moderated by the composition of nomination committees (whether the CEO is a member of the committee and the percentage of non-executive directors who are members of the committee) and by board interlocks (more specifically, the number of direct and indirect network links between members of the nomination committee and newly recruited directors). Strong support for our hypotheses was drawn using a sample of 200 firms over the 2000-2005 period.