A committee of subject matter experts (SMEs), who are typically recognized experts in the field, discusses the qualifications of a minimally competent candidate (MCC) that is just barely qualified. An MCC is a person who has met the basic prerequisites and training, and is capable of performing the job sufficiently enough to be hired, but is far from an expert. As the goal for a certification is to determine which candidates are competent, this provides a conceptually appealing baseline.
Competence-based exams such as professional certification and licensure exams rely on criterion-referenced cutscores (passing scores) to make pass-fail decisions, identifying examinees that have achieved a certain level of competence. These cutscores must be derived from psychometrically advanced methods to be legally defensible; to become accredited and defensible, you can’t pick a nice round number like 70% for your cutscore! The most common of these sounds, recognized methods is the modified Angoff method.