1. Membership and Constitution
- 1.1 The Committee shall comprise at least three directors. A majority of the members of the Committee shall be independent.
- 1.2 Only members of the Committee have the right to attend Committee meetings. Non members may be invited to attend all or part of any meeting, as and when appropriate and necessary.
- 1.3 Committee members shall be appointed by the Board of the Company (the Board), on the recommendation of the Committee, in consultation with the Committee Chairman.
- 1.4 Appointments to the Committee shall be made for a period of up to three years, which may be extended for further periods up to three years, provided that the director still meets the criteria for membership of the Committee.
- 1.5 The Company Secretary, or his or her nominee, shall act as the secretary for the meeting.
- 1.6 The quorum necessary for the transaction of business shall be two.
- 1.7 Committee meetings shall be called by the secretary at the request of the Committee Chairman. Notice of each meeting confirming the venue, time and date together with an agenda and papers shall be circulated to the Committee members and attendees where possible no later than five working days before the date of the meeting.
- 1.8 The Committee shall meet at least twice a year and otherwise as required.
- 1.9 The Secretary shall minute the proceedings and resolutions of all Committee meetings, including the names of those present and in attendance.
- 1.10 These Terms of Reference may only be amended with the consent of the Board.
The Committee is established as a committee of the Board and is authorised to carry out the duties as set out in these Terms of Reference. In fulfilling its duties, the Committee is further authorised to:
- 2.1 Regularly review the structure, size and composition (including the skills, knowledge, experience and diversity) of the Board and make recommendations to the Board with regard to any changes.
- 2.2 Give full consideration to succession planning for directors and other senior executives in the course of its work, taking into account the challenges and opportunities facing the Company, and the skills and expertise needed on the Board in the future.
- 2.3 Keep under review the leadership needs of the organisation, both executive and non-executive, with a view to ensure the continued ability of the organisation to compete effectively in the marketplace.
- 2.4 Be responsible for identifying and nominating for the approval of the Board, candidates to fill Board vacancies as and when they arise.
- 2.5 Before any appointment is made by the Board, evaluate the balance of skills, knowledge, experience and diversity on the Board, and, in the light of this evaluation, prepare a description of the role and capabilities required for a particular appointment.
In identifying suitable the Committee shall:
- use open advertising or the services of external advisers to facilitate the search;
- consider candidates from a wide range of backgrounds, including educational and professional backgrounds;
- consider candidates on merit and against objective criteria and with due regard for the benefits of diversity on the Board, including gender and age, taking care that appointees have enough time available to devote to the position.
- 2.6 Ensure that on appointment to the Board, non-executive directors receive a formal letter of appointment setting out clearly what is expected of them in terms of time commitment, Committee service and involvement outside Board meetings.
- 2.7 Review annually the time required from non-executive directors. The performance evaluation should be used to assess whether the non-executive directors are spending enough time to fulfil their duties.
- 2.8 Work and liaise as necessary with all other Board Committees.
- 2.9 Formulate plans for succession for both executive and non-executive directors and in particular for the key roles of Chairman and Chief Executive.
- 2.10 Make recommendations to the any other Board Committee as appropriate, in consultation with the chairmen of those committees.
- 2.11 Make recommendations to the Board concerning the re-appointment of any non-executive director at the conclusion of their specified term of office having due regard to their performance and ability to continue to contribute to the Board in the light of knowledge, skills and experience required.
- 2.12 Make recommendations to the Board concerning the re-election by shareholders of the directors under the annual re-election provision of the UK Governance 2016 Code or the retirement by rotation provisions in the Company’s articles of association, having due regard to their performance and ability to continue to contribute to the Board in the light of the knowledge, skills and experience required and the need for progressive refreshing of the Board (particularly in relation to directors being reelected for a term beyond six years).
- 2.13 Make recommendations to the Board concerning any matters relating to the continuation in office of any director at any time including the suspension or termination of service of an executive director as an employee of the Company subject to the provisions of the law and their service contract.
- 2.14 Make recommendations to the Board concerning the appointment of any director to executive or other office.
3. Reporting Responsibilities
- 3.1 The Committee Chairman shall report to the Board on its proceedings after each meeting on all matters within its duties and responsibilities.
- 3.2 The Committee shall make whatever recommendations to the Board it deems appropriate on any area within its remit where action or improvement is needed.
- 3.3 The Committee shall produce a report to be included in the Company’s annual report about its activities, the process used to make appointments or explain if an external search agency has been used. Any search agency used, shall be identified in the annual report and a statement made as to whether it has any connection with the Company.
- 4.1 The Committee is authorised by the Board to obtain, at the Company’s expense, outside legal or other professional advice on any matters within its terms of reference.