Nominations Committee Terms of Reference
1. Constitution
1.1 The Committee is constituted as a Committee of the Board.
2. Membership
2.1 Members of the Committee shall be appointed by the Board.
2.2 The Committee shall consist of all Non-Executive Directors and the Chief Executive.
2.3 Only members of the Committee have the right to attend the Committee meetings. However, other individuals such as the head of human resources and external advisers may be invited to attend for all or part of any meeting.
2.4 The Board shall appoint the Committee Chairman who should be either the Chairman of the Board or the Senior Independent Non-Executive Director (SID). In the absence of the Committee Chairman and/or an appointed deputy, the remaining members present shall elect one of their number to chair the meeting. The Chairman of the Board shall not chair the Committee when it is dealing with the matter of succession to the Chairmanship. In relation to such matters the Committee shall be chaired by the SID.
3. Secretary
3.1 The Group Company Secretary shall act as the secretary of the Committee.
4. Quorum
4.1 The quorum necessary for the transaction of business shall be two, both of whom must be independent non-executive directors. A duly convened meeting of the Committee at which a quorum is present shall be competent to exercise all or any of the authorities, powers and discretions vested in or exercisable by the Committee.
5. Frequency of Meetings
5.1 The Committee shall meet at least twice a year and at such other times as the Chairman of the Committee shall require.
6. Notice of Meetings
6.1 Meetings of the Committee shall be summoned by the secretary of the Committee at the request of the Chairman of the Committee.
7. Minutes of Meetings
7.1 The secretary shall minute the proceedings and resolutions of all Committee meetings, including the names of those present and in attendance.
7.2 Minutes of Committee meetings shall be circulated promptly to all members of the Committee.
8. Annual General Meeting
8.1 The Chairman of the Committee shall attend the Annual General Meeting prepared to respond to any shareholder questions on the Committee’s activities.
9. Duties
The Committee shall:
9.1 Regularly review the structure, size and composition (including the skills, knowledge and experience) required of the Board compared to its current position and make recommendations to the board with regard to any changes.
9.2 Give full consideration to succession planning in the course of its work, taking into account the challenges and opportunities facing the company, and what skills and expertise are therefore needed on the board in the future.
9.3 Be responsible for identifying and nominating for the approval of the Board, candidates to fill Board vacancies as and when they arise.
9.4 Before making an appointment, evaluate the balance of skills, knowledge and experience on the Board and, in the light of this evaluation, prepare a description of the role and capabilities required for a particular appointment.
9.5 Keep under review the leadership needs of the organisation, both executive and non-executive, with a view to ensuring the continued ability of the organisation to compete effectively in the marketplace.
9.6 Review annually the time required from non-executive directors. Performance evaluation should be used to assess whether the non-executive directors are spending enough time to fulfil their duties.
9.7 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.
9.8 As part of the process for nominating candidates for appointment, obtain details of and review any interests the candidate may have which conflict or may conflict with the interests of the Company. The Committee shall consider whether, despite any such conflict, there are nevertheless grounds for recommending the candidate for appointment and for the Board to authorise the relevant conflict. The Committee shall as part of any proposal to the Board for appointment of the relevant candidate explain the grounds for the appointment.
The Committee shall also make recommendations to the Board concerning:
9.9 Formulating plans for succession for both executive and non-executive directors and in particular for the key roles of the Chairman and Chief Executive.
9.10 Re-appointment of any non-executive director at the conclusion of their specified term of office.
9.11 The re-election by shareholders of any director under the ‘retirement by rotation’ provisions in the company’s articles of association.
9.12 Any matters relating to the continuation in office of any director at any time.
9.13 The appointment of any director to executive or other office other than to the positions of Chairman and Chief Executive, the recommendation for which would be considered at a meeting of the Board.
9.14 The terms and conditions on which any authorisation of a conflict of interest of a proposed candidate should be given by the Board.
10. Reporting Responsibilities
10.1 The Committee Chairman shall report formally to the board on its proceedings after each meeting on all matters within its duties and responsibilities.
10.2 The Committee shall make a statement in the annual report about its activities, the process used to make appointments and explain if external advice or open advertising has not been used.
11. Other
11.1 The Committee shall, at least once a year, review its own performance, constitution and terms of reference to ensure it is operating at maximum effectiveness and recommend any changes it considers necessary to the board for approval.
12. Authority
12.1 In discharging its duties the Committee may obtain at the Companies’ expense such legal or other professional advice it considers necessary.
Reviewed by the Nominations Committee on 29 June 2010
References to “the Committee” shall mean the Nomination Committee
References to “the Board” shall mean the Board of Directors
CC refers to the Combined Code 2006
Higgs refers to the Good Practice Suggestions From The Higgs Report - June 2006