Corporate Governance | Terms of Reference

Audit Committee

Terms of Reference

Meetings of the Audit Committee take place at least three times in each year. A meeting takes place to approve the half-year and full-year accounts respectively. The remaining meeting is held to consider accounting policies, governance and other matters relating to Internal Control and Management.
The Audit Committee’s role is to advise the board in the discharge on its duties with regard to the company’s financial statements and the maintenance of proper financial records and controls.
Specifically, it:
1. monitors the integrity of the financial statements of the company and any formal announcements relating to the company’s financial performance, reviewing all significant financial reporting judgements contained in them.
2. reviews the company’s internal financial controls and internal control and risk management systems.
3. monitors and reviews the effectiveness on the company’s internal audit function.
4. makes recommendations to the board, in relation to the appointment of the external auditor and approves the remuneration and terms of engagement of the external auditor.
5. reviews and monitors the external auditor’s independence and objectivity and the effectiveness of the audit process, taking into consideration relevant UK professional and regulatory requirements.
6. develops and implements policy for the engagement of the external auditor to supply non-audit services, taking into account relevant ethical guidance regarding the provision of non-audit services by the external audit firm. It also approves fees in respect of non-audit services provided by the external auditor to ensure independence and objectivity by the audit firm.
7. reports to the board, identifying any matters in respect of which it considers that action or improvement is needed, and makes recommendations as to the steps to be taken.
At least once a year, the Audit Committee also meets with the external and internal auditors without the executive board members present. The committee is authorised by the board to investigate any activity within the terms of reference, and to seek information from employees as required. It is also authorised to obtain outside legal or other independent professional advice and to secure the attendance of outsiders with relevant experience and expertise if necessary.

Remuneration Committee

Terms of Reference

Two meetings of the Remuneration Committee are held each year in March and May in order to consider remuneration and incentive scheme matters, with other meetings scheduled as required.
The purpose of the Remuneration Committee is to:
1. determine and advise the board on the framework or broad policy for the remuneration of the chief executive and the chairman of the company. It also monitors and ratifies the levels and structure of remuneration for other members of senior management.
2. set the remuneration for all executive directors, and the chairman. The remuneration of non-executive directors is a matter for the chairman and executive members of the board. No director or manager is involved in any decisions as to his or her own remuneration.
3. determine the total individual remuneration package of each executive director including, where appropriate, bonuses, incentive payments and based incentives. In determining such packages and arrangements the committee give due regard to appropriate codes of practice as well as the UK Listing Authority’s Listing Rules.
4. determine targets and monitor performance against those targets for any performance-related pay schemes operated by the Company.
5. determine the policy and scope of pension arrangements for each executive director.
A further key role of the Remuneration Committee is to set-out rules and guidelines on such matters as:
1. employee benefit structures throughout the company or group.
2. agreement of the policy for authorising claims for expenses from the chief executive and chairman and review expenses annually.
3. establishing the selection criteria, appointment and setting the terms of reference, of any remuneration consultants who advise the committee.
4. ensuring that provisions regarding disclosure of remuneration, including pension, as set-out in the Directors’ Remuneration Report Regulations 2002 are fulfilled.

Nomination Committee

Terms of Reference

The Nomination Committee meets as necessary and makes proposals for appointments to the board and carries out the selection process. The Committee:
1. reviews and makes recommendations to the board on the structure, size and composition of the board.
2. nominates candidates to fill board vacancies and makes recommendations to the board.
3. reviews succession planning.
4. ensures that non-executive directors receive formal letters of appointment that provide clear parameters of expectation in time commitment, committee service and other involvement.
5. will make a statement in the annual report detailing its terms of reference, the authority delegated to it by the board, its activities during the year (including membership of the committee), and/or external advisors used in any recruitment during the year.
The committee also makes recommendations to the board:
1. on plans for succession for both executive and non-executive directors.
2. on the re-appointment of any non-executive director at the conclusion of their specified term of office.
3. concerning the re-election by shareholders of any director under the retirement by rotation provisions in the company’s articles of association.
4. concerning any matters relating to the continuation in office of any director at any time: and
5. concerning the appointment of any director to executive or office other than the positions of chairman and chief executive, the recommendation for which would be considered at a meeting of the board.