The board has established three principal board committees, to which it has delegated certain of its responsibilities.
They are the Nomination committee, the Audit committee, and the Remuneration committee. The membership, responsibilities and activities of these committees are described in the Corporate Governance report and, in the case of the Remuneration committee, in the Remuneration report, included within the Company’s annual report and accounts. Membership of these committees is reviewed annually. Minutes of committee meetings are made available to all directors on a timely basis.
Current members: Michael McLintock (Chairman), Ruth Cairnie, Javier Ferrán, Wolfhart Hauser and Richard Reid.
In accordance with its terms of reference, the Nomination committee’s primary responsibilities include:
- leading the process for board appointments and making recommendations to the board;
- regularly reviewing the board structure, size and composition (including the skills, knowledge, independence, experience and diversity), recommending any necessary changes;
- considering plans for orderly succession for appointments to the board and to senior management to maintain an appropriate balance of skills and experience within the Company and to ensure progressive refreshment of the board;
- keeping under review the leadership needs of the group, both executive and non-executive, to ensure the continued ability of the group organisation to compete efficiently in the marketplace; and
- being responsible for identifying and nominating, for the approval of the board, candidates to fill board vacancies as and when they arise.
Current members: Ruth Cairnie (Chairman), Graham Allan, Wolfhart Hauser, Richard Reid and Michael McLintock
The Remuneration committee is responsible for all elements of the remuneration of the executive directors of the Company, and the Chairman of the board, including pension rights and any compensation payments, including exit payments.
Any decisions made by the Committee in relation to the Chairman and executive directors of the board must be made within the scope and the terms of the current directors’ remuneration policy as approved by ordinary resolution of the shareholders of the Company.
The duties of the Remuneration committee are set out in its terms of reference which can be viewed via the link below.
The directors’ remuneration policy was approved by shareholders at the 2014 AGM for a period up to three years. For ease of reference, the wording of the policy is provided, unchanged from that approved in 2014 except as necessary to update references and increase clarify for the reader, in the directors’ remuneration report in the annual report and accounts 2016 (see link below).
Current members: Richard Reid (Chairman), Graham Allan, Ruth Cairnie and Wolfhart Hauser.
Primary responsibilities include:
- monitoring the integrity of the group’s financial statements and any formal announcements relating to the Company’s performance, reviewing significant financial reporting judgements contained in them before their submission to the board;
- informing the board of the outcome of the group’s external audit and explaining how it contributed to the integrity of financial reporting;
- reviewing and challenging, where necessary, the consistency of, and changes to, accounting and treasury policies; whether the group has followed appropriate accounting policies and made appropriate estimates and judgements; the clarity and completeness of disclosure; significant adjustments resulting from the audit; the going concern assumption, the viability statement, and compliance with auditing standards;
- at the board’s request, reviewing the content of the annual report and accounts and advising the board on whether, taken as a whole, it is fair, balanced and understandable and provides the information necessary for shareholders to assess the Company’s position and performance, business model and strategy;
- where requested by the board, assisting in relation to the board’s assessment of the principal risks facing the Company and the prospects of the Company for the purposes of disclosures required in the annual report and accounts;
Internal financial controls
- reviewing the effectiveness of the group’s internal financial controls, including the policies and overall process for assessing established systems of internal financial control and timeliness and effectiveness of corrective action taken by management;
Whistleblowing and fraud
- overseeing the group’s policies, procedures and controls for preventing bribery, identifying money laundering, and the group’s arrangements for whistleblowing;
- monitoring and reviewing the role, effectiveness and independence of the group’s internal audit function in the context of the group’s overall financial risk management system; and
- overseeing the relationship with the group’s external auditors, including reporting to the board each year whether it considers the audit contract should be put out to tender, adhering to any legal requirements for tendering or rotation of the audit services contract as appropriate, reviewing and monitoring the external auditors’ objectivity and independence, agreeing the scope of their work and fees paid to them for audit, assessing the effectiveness of the audit process, and agreeing the policy in relation to the provision of non-audit services.