The Board of the Company (the "Board") resolved to appoint a committee known as the Nomination Committee (the "Committee") and approved the following terms of reference for the Committee at a meeting held on 26 June 2006.
Membership
The Committee shall have not less than three members appointed by the Board. The majority of the Committee shall be independent non-Executive Directors. The independent non-Executive Directors shall be free from any relationship that may interfere with the exercise of his or her judgment as a member of the Committee and shall meet the independence requirements of applicable law, regulations and the listing rules of the UK Listing Authority.
Committee meetings may only be attended by members of the Committee, however, other individuals such as the Group Managing Director, Directors appointed by the Company's principal shareholders the head of human resources and external advisers may be invited to attend for all or part of any meeting, as and when appropriate.
The Chairman of the Committee shall be the Chairman of the Company or an independent non-Executive Director, as appointed by the Board. However, the Chairman of the Company shall not chair the Committee when it is dealing with the appointment of a successor to the Chairmanship of the Company. In the absence of the Chairman the remaining members shall elect one of themselves to chair the meeting. The company secretary or his nominee shall act as the secretary of the Committee and shall normally attend Committee meetings.
Appointments to the Committee shall be for a period of up to three years, extendable by no more than two additional three-year periods provided that the majority of the Committee members remain independent.
Procedure
Operation
The Committee shall meet at least twice a year and at such other times as the Chairman of the Committee shall require.
Meetings of the Committee shall be summoned by the Secretary of the Committee at the request of the Chairman of the Committee. Unless otherwise agreed, notice of each meeting confirming the venue, time and date together with an agenda of items to be discussed, shall be forwarded to each member of the Committee, any other person required or invited to attend and all other non-Executive Directors, no later than [5] working days before the date of the meeting. Supporting papers shall be sent to Committee members and to other attendees as appropriate, at the same time.
Quorum
The quorum for meetings of the Committee shall be two members. 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.
Advice
The Committee is authorised to seek any information it requires from any employee of the Company in order to perform its duties and obtain, at the Company's expense, outside legal or other professional advice on any matters within its terms of reference.
Reporting
The secretary shall minute the proceedings and resolutions of all Committee meetings, including the names of those present and in attendance. Minutes of Committee meetings shall be circulated promptly to all members of the Committee and the Chairman of the board and, once agreed, to all other members of the Board, unless a conflict of interest exists.
The Committee Chairman shall report formally to the Board on its proceedings after each meeting on all matters within its duties and responsibilities. The Committee shall make whatever recommendations to the Board it deems appropriate on any area within its remit where action or improvement is needed.
The Committee shall make a statement in the Company's annual report about its activities, the process used to make appointments and explain if external advice or open advertising has now been used, the membership of the Committee, the number of Committee meetings and attendance over the course of the year.
The Chairman to the Committee should be available to answer questions at the Company's Annual General Meeting.
The Committee shall make available its terms of reference upon request and display them on the Company's website.
Duties
The primary role of the Committee is to consider and make recommendations to the Board concerning the composition of the Board, including proposed appointees to the Board, whether to fill any vacancies that may arise or to change the number of Board members.
In particular, the Committee shall:
- regularly review the structure, size and composition (including the skills, knowledge and experience) of the Board, with a view to ensuring the continued ability of the Company to compete effectively in the marketplace, and make recommendations to the Board with regard to any changes;
- be responsible for identifying and nominating, for the approval of the Board, appropriate individuals to fill Board vacancies as and when they arise;
- 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 particular appointments;
- in identifying suitable candidates, where appropriate, to review internal candidates through a process of succession planning and/or:
- use open advertising or the services of external advisers to facilities the search;
- consider candidates from a wide range of backgrounds; and
- consider candidates on merit and against objective criteria, taking care that appointees have enough time available to devote to the position;
- review annually the time required from each non-Executive Director, using performance evaluation to assess whether the non-Executive Director is giving sufficient commitment to the role;
- 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;
- 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.
The Committee shall make recommendations to the Board concerning:
- plans for succession for both Executive and non-Executive Directors and, in particular, for the key roles of Chairman and Group Managing Director;
- suitable candidates for the role of senior independent Director;
- membership of the Audit and Remuneration Committees, in consultation with the chairman of each of those committees;
- the re-appointment of any non-Executive Director at the conclusion of their specified term of office, having given due regard to their performance and ability to continue to contribute to the Board in the light of the knowledge, skills and experience required;
- the continuation (or not) in service of any Director who has reached the age of 70;
- the re-election by shareholders of any Director under 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;
- the appointment of any Director to Executive or other office other than to the positions of Chairman and Group Managing Director, the recommendation for which would be considered at a meeting of the full Board;
- 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.
Self-Review
The Committee shall review its own performance, constitution and terms of reference to ensure it is operating at a maximum effectiveness and recommend any changes it considers necessary to the Board for approval.
