FCA Info Memo - Nominating Committee Brochures

Informational Memorandum
Subject:	Nominating Committee Brochures
Date of Memorandum:	11/09/2010
Expiration Date:
Office:	Chairman/CEO
Signed By:	Strom, Leland
FCA Contact Person:	Dalton, Thomas
Contact Phone:	703-883-4460
List of Attachments:	The Role of the Farm Credit System Nominating Committees; The Director's Role

Printer-friendly version =>

November 9, 2010

To: Chief Executive Officer
All Farm Credit System Institutions

From: Leland A. Strom
Chairman and Chief Executive Officer

Subject: Nominating Committee Brochures

The purpose of this Informational Memorandum (IM) is to remind Farm Credit System (FCS) institutions of the importance of nominating committees in election of boards of directors. FCS institutions are established as farmer-owned cooperatives, and the cooperative structure relies on the control and participation of stockholders.

As part of that control, each FCS bank and association is required to have a nominating committee. The nominating committee is a committee of voting stockholders—and not a committee of the board. It is responsible for identifying, evaluating, and nominating at least two willing and suitable candidates for each director position up for election. The nominating committee helps ensure that director candidates have sufficient skills and experience to provide sound guidance and leadership to the institution.

The nominating committee may use several tools to fulfill its role. Each FCS institution is required to provide the committee with a written policy identifying desirable director qualifications. In addition, to help identify candidates who would strengthen the current board, the nominating committee may request a confidential summary of the current board’s self-evaluation. The institution is also required to provide the committee with reasonable access to administrative resources. Details regarding these administrative resources are outlined in the enclosed brochure. In addition to those identified in the brochure, administrative resources may include assistance from your bank or association staff with logistical, clerical, and administrative support. In carrying out its responsibilities, the nominating committee may also seek the advice of, or training from, professional search or personnel firms (e.g., human resources firms) to equip committee members with additional skills in locating director candidates. The institution’s guiding principle should be to ensure that the committee has whatever it needs to identify high-quality candidates so that the election can produce a board that is fully capable of governing the institution.

Service as a member of his or her institution’s nominating committee is one of the most important contributions that an FCS bank or association stockholder can render. It is through this service that member-owners influence the institution’s commitment to good governance and ensure that elected directors represent the interests and concerns of all the institution's owner-borrowers.

To help ensure that nominating committee members are fully informed of their rights and obligations as they perform this important service to their cooperative, as well as to aid FCS institutions in their search for nominating committee members, the Farm Credit Administration (FCA) has updated its brochure on nominating committees.

Enclosed please find 20 copies of the updated FCA brochure, “The Role of Farm Credit System Nominating Committees.” The brochure provides valuable information for stockholders considering service on a nominating committee, as well as for those already serving on an institution’s nominating committee. The brochure outlines the purpose and responsibilities of nominating committees and provides guidance on selecting a slate of candidates for all open stockholder-elected director positions. We encourage each FCS institution to place these brochures in areas easily accessible to its membership.

Also enclosed is a copy of “The Director’s Role,” which describes the responsibilities of FCS board members. We encourage you to make this publication available to your board.

Both publications are also posted on the FCA website at www.fca.gov. Under the heading Reports & Publications, select Resources for the FCS. Scroll to the bottom of the page to find links to the PDFs of these publications. Additional printed copies of both publications are available from FCA’s Office of Congressional and Public Affairs, at (703) 883-4056 or Info-Line@fca.gov.

If you have any questions about this IM, please call Thomas Dalton, at (703) 883-4460, or e-mail Tom at daltont@fca.gov.

Enclosures

cc: Chairman, Board of Directors
All Farm Credit System Institutions