THE GROUP EXECUTIVE COMMITTEE TERMS OF REFERENCE
CONSTITUTION
The Board has established a Committee of the Board to be known as the Group Executive Committee. The objective of the Committee:
- is to take, or to establish the basis on which, all decisions are taken, other than those matters specifically reserved for the Group Board or its committees.
AUTHORITY
The Committee shall be appointed and empowered by the Board with the objectives and terms of reference established by the Board.
MEMBERSHIP
The Committee shall consist of the following members of the senior management team:
Group CEO
Group Finance Director
General Manager, UK
Regional General Manager, Europe
President, Allied
Head of Group Marketing
General Manager, Product Management
General Manager, Operational Processes
General Manager, IS/EBS
General Manager, Group HR
The General Manager, Japan and the Regional General Manager, Asia will attend meetings on a less frequent basis.
ATTENDANCE AT MEETINGS
Senior managers may be invited to attend.
CHAIRMAN
The Committee shall normally be chaired by the Group Chief Executive.
QUORUM
A quorum shall be two members.
SECRETARY
The secretary shall be the PA to the Group CEO.
FREQUENCY OF MEETINGS
Meetings shall be held monthly. Any Committee member has the right to call an ad hoc meeting of the Committee should they feel the need to do so.
DUTIES
In fulfilling the objective detailed above, the Committee shall inter alia:
- devise and ensure the achievement of the Group's strategic intent;
- direct and monitor performance of Processes and Operating Companies;
- prioritise initiatives and allocate resource;
- approve and monitor strategic and forecasting processes by setting formats, guidelines and timetables;
- approve investment proposals, and monitor the progress of approved investment within the authority delegated by the Board;
- establish (after agreement by the Board when appropriate) and maintain appropriate Group policies to be adhered to by all companies;
- accept prime responsibility for the continuing Group-wide development of senior people, including training, evaluation procedures, employment conditions and reward and recognition practices;
- develop the Group's policies and practices in respect of all risk management, health, safety and environmental issues to ensure compliance with best possible practice;
- develop Group response and practice in respect of compliance issues, other than those of a purely local nature;
- address areas or topics specifically referred to the Committee by either the Group Board or the Group Chief Executive.
REPORTING PROCEDURES
The minutes of all Committee meetings will be circulated to the Board.
THE AUDIT COMMITTEE TERMS OF REFERENCE
CONSTITUTION
The Board has established a Committee of the Board to be known as the Audit Committee.
MEMBERSHIP
The Committee shall be appointed by the Board. All members of the Committee shall be independent non-executive directors of the Company. The Committee shall consist of not less than three members.
QUORUM
A quorum shall be two members.
CHAIRMAN
The Chairman of the Committee shall be appointed by the Board from amongst the independent non-executive directors.
ATTENDANCE AT MEETINGS
Members of Executive Management, Head of Operational Audit and a representative of the external auditors shall attend meetings at the invitation of the Committee.
At least once a year the Committee shall meet separately with the external auditors and the Head of Operational Audit without the presence of Executive Management.
FREQUENCY OF MEETINGS
Meetings will be held not less than four times a year. The meeting dates for the financial year will be agreed by the Committee prior to the commencement of the year.
The Chairman will call an additional meeting of the Committee if so requested by any member, the Chief Executive Officer, the Finance Director, the Head of Operational Audit or the external auditors.
The Secretary, in conjunction with the Chairman of the Committee, shall draw up an agenda which shall be circulated together with supporting papers, at least one week prior to each meeting to the members, the other members of the Board and the external auditors.
AUTHORITY
The Committee is authorised by the Board to investigate any activity within its Terms of Reference. The Committee is granted full access to Company information and can seek that information from any employee of the business. Employees are directed to co-operate with any request made by the Committee.
SECRETARY
The Committee shall appoint a Secretary to assist it in administrative matters.
ADVISORS
The Committee is authorised to obtain outside legal or independent professional advice and the company will make funds available to enable this.
RESPONSIBILITIES
The responsibilities of the Committee shall be:
1.1 Controls
- To review reports by management and the Operational Audit Department on the effectiveness of systems for internal financial and operational controls and financial reporting;
- To review in particular the adequacy of the Group's risk control processes and report on these to the Board.
- To monitor the integrity of the interim and annual financial statements and all trading statements before submission to the Board, paying particular attention to:
- accounting policies and practices and any changes to them
- decisions requiring a major element of judgement
- the extent to which the financial statements are affected by any unusual transactions in the year and how they are disclosed
- the clarity of disclosures
- significant adjustments resulting from the audit
- the going concern assumption
- compliance with accounting standards
- compliance with stock exchange and other legal requirements
- the Company's statement on internal control systems
- the Operational and Financial Review
1.2 External audit
- To oversee the process for selecting the external auditor and make appropriate recommendations through the Board to the shareholders to consider at the AGM.
- To recommend the audit fee to the Board, to approve the policy in respect of fees for non-audit services provided by the external auditor and to ensure that the provision of the non-audit services does not impair their independence or objectivity.
- To discuss with the external auditor, before the audit commences, the nature and scope of the audit and to review the auditor's quality control procedures and steps taken by the auditor to respond to changes in regulatory and other requirements.
- To review the external auditor's management letter and management's response.
- To assess the independence of the external auditors, ensuring that key partners are rotated at appropriate intervals.
- To review the performance of the external auditors annually.
1.3 Operational Audit
- To review the operational audit programme, to ensure that the function is adequately resourced and has appropriate standing within the Company.
- To consider management's response to any significant Operational Audit recommendations.
- To review on an annual basis the performance of the Operational Audit department and to oversee an independent review of the function at least once every five years.
- To approve the appointment or dismissal of the Head of Operational Audit.
1.4 Whistleblowing
To review the Company's arrangements by which staff can raise concerns about matters of financial reporting, control and or other topics.
REPORTING PROCEDURES
- The Chairman of the Committee will update the Board at the earliest reasonable opportunity to the outcomes of the Committee meetings.
- The Secretary to the Committee shall circulate the minutes of the Committee meetings to all members of the Board and the external auditors.
- The Committee shall conduct an annual review of their work and these Terms of Reference and make recommendations to the Board.
- The Committee's duties and activities during the year shall be disclosed in the annual financial statements, subject to Board approval.
- The Chairman of the Committee shall attend the AGM and shall answer questions, through the Chairman of the Board, on the Committee's activities and its responsibilities.
THE REMUNERATION COMMITTEE TERMS OF REFERENCE
CONSTITUTION
The Board has established a committee of the Board to be known as the Remuneration Committee. The objectives of the Committee are:
- to provide the remuneration ("remuneration" shall be interpreted in the broadest sense to include all benefits and terms of employment) packages needed to attract, retain and motivate Executive Directors and senior employees;
- to ensure that the Company's Executive Directors and senior employees are fairly rewarded for their individual contributions to the Company's overall performance;
- to ensure that remuneration reflects current market practice. In determining remuneration, the committee will take into account comparable information for similar job functions in industrial service companies and other companies of a similar size;
- to demonstrate that performance related elements of the remuneration of executive directors are designed to align their interests with those of shareholders;
- to comply with established best practice and the Combined Code.
AUTHORITY
The Committee shall be appointed and empowered by the Board to implement the remuneration policy as established by the Board.
MEMBERSHIP
The members of the Committee shall not be less than three non-executive directors who will have no personal interest in the outcome of their decisions and who will give due regard to the interests of the shareholders and to the financial and commercial health of the Company.
ATTENDANCE AT MEETINGS
The Company Chairman will be invited to attend meetings when appropriate.
The Group Chief Executive will be invited to attend meetings to discuss performance of executive directors and make proposals as appropriate.
The Group Chief Executive will also report to the Committee on significant Group-wide changes in salary and compensation structure and terms and conditions affecting other senior management.
CHAIRMAN
The Chairman of the Committee shall be appointed by the Board.
SECRETARY
The Secretary of the Committee shall be appointed by the Board.
ADVISORS
As Directors of the Company, the Committee shall be entitled to seek any information it requires from any employee and all employees will be directed to co-operate with any request made by the Committee. The Committee has the authority to obtain outside legal or other independent professional advice at the expense of the Company, and to secure the attendance of external advisers with the relevant experience and expertise, if it considers this necessary.
QUORUM
A quorum shall be two Committee members.
FREQUENCY OF MEETINGS
Meetings shall be held as required but not less than twice per year
SUB COMMITTEE
The Committee may appoint a sub committee.
REPORTING PROCEDURES
1. Specific Duties
The Committee shall:
- Determine and review on an ongoing basis, with the Board, the framework for the remuneration of the Group's Chief Executive, Chairman, the executive directors, company secretary and other designated senior employees. Remuneration of non-executive directors shall be a matter for the Board. Nobody shall be involved in any decisions as to their own remuneration;
- take into account all factors deemed necessary, including the contents of the Combined Code on Corporate Governance and the Listing Rules, with the objective of ensuring that members of the executive management of the Group are provided with appropriate incentives to encourage enhanced performance and are, in a fair and responsible manner, rewarded for their individual contributions to the success of the Group;
- approve the design of, and determine targets for, any performance related remuneration schemes operated by the Group and approve the total annual payments made under such schemes for the Executive Directors and other designated senior employees;
- review the design of all share incentive plans for approval by the Board and shareholders. Determine each year whether awards will be made, and if so, their overall amount, individual awards to executive directors and any other designated senior employees and the performance targets to be used;
- determine the policy for, and scope of, pension arrangements for each executive director and any other designated senior employees;
- ensure contractual terms on termination of Executive Directors and designated senior employees are fair to the individual and the Group, that failure is not rewarded and that the duty to mitigate is fully recognised;
- within the agreed framework and in consultation with the Chairman, determine the total individual remuneration package of each executive director and other designated senior employees;
- review and note annually the remuneration trends across the Group including any major changes in employee benefits structures throughout the Group;
- agree the policy for authorising claims for expenses from the Chief Executive and Chairman;
- be exclusively responsible for establishing the selection criteria, selecting, appointing and setting the terms of reference for any remuneration consultants who advise the Committee: and to obtain reliable, up-to-date information about remuneration in other companies. The Committee shall have full authority to commission any reports or surveys which it deems necessary to help it fulfil its obligations.
1.1 Reporting Responsibilities
- The Committee Chairman shall report to the Board on its proceedings after each meeting on all matters within its duties and responsibilities where appropriate.
- 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 minutes of all Committee meetings will be circulated to the Board for ratification. This will also provide the opportunity for Board members not on the Committee to raise any queries.
- The Committee shall produce an annual report of the Group's remuneration policy and practices, which will form part of the Group's annual report and ensure each year that it is put to the shareholders for approval at the AGM.
1.2 Other
- 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.
THE TREASURY COMMITTEE TERMS OF REFERENCE
CONSTITUTION
The Board has established a Committee of the Board to be known as the Treasury Committee. The objective of the Committee is:
- to set operational policies and, where required, approve Treasury and Foreign Currency transactions throughout the Group within the overall policy established by the Board.
AUTHORITY
The Committee shall be appointed and empowered by the Board to meet the objectives and terms of reference as established by the Board.
MEMBERSHIP
The Committee shall consist of the Group Chief Executive, Group Finance Director, Group Treasurer, Assistant Group Treasurer, Group Company Secretary, Group Controller and Group Tax Manager.
CHAIRMAN
The Committee shall be chaired by the Group Finance Director.
QUORUM
A quorum shall be two and must comprise of at least two Executive Directors or the Group Treasurer and one Executive Director.
SECRETARY
The Secretary shall be appointed by the Board and shall normally be the Assistant Group Treasurer.
DUTIES
In fulfilling the objectives detailed above, the Committee shall inter alia:
- approve and recommend to the Board all the policies and procedures laid down in the Treasury Manual, plus any subsequent amendments, within which Treasury must operate.
- monitor, via the monthly Treasury Report to the Treasury Committee, compliance with these policies and procedures;
- Provide specific approval for:
- all foreign exchange and option deals involving a commitment of more than £20 million equivalent;
- any changes to the issued share capital of a Group company proposed by Group Treasury and recommend to the Board any changes in excess of £1 million equivalent;
- all new borrowing and overdraft facilities in excess of £50,000 equivalent and recommend to the Board any greater than £1 million equivalent;
- any changes to authorised instruments, counterparties, dealers and dealing authorities available for investment, foreign exchange, borrowing and interest rate exposure management activities and recommend to the Group Board all changes to authorised instruments and any amendments that effectively change the existing authorised credit risk parameters;
- any specific items that are, in the opinion of the Group Treasurer and the Group Finance Director, of a non-routine nature but not within matters scheduled as reserved for the Board.
REPORTING PROCEDURES
The minutes of all Committee meetings will be circulated to the Board for ratification.
THE NOMINATION COMMITTEE TERMS OF REFERENCE
CONSTITUTION
The Board has established a committee of the Board to be known as the Nomination Committee. The objective of the Committee is:
- to select the most suitable candidate or candidates for appointment to the Board and to make recommendation as regards plans for succession for both Executive and Non-Executive Directors.
AUTHORITY
The Committee shall be empowered by the Board to meet the objectives and terms of reference as established by the Board.
MEMBERSHIP
The Committee shall consist of the Chairman, and a majority of Non-Executive Directors. The Chief Executive may attend meeting upon invitation from the Chairman.
CHAIRMAN
The Chairman of the Board shall chair the Committee save when dealing with the appointment of a successor to the chairmanship in which case the chair will be assumed by the Senior Independent Director.
QUORUM
A quorum shall be two Committee members.
SECRETARY
The Company Secretary shall be Secretary of the Committee.
FREQUENCY OF MEETINGS
Meetings shall be held as required.
SUB COMMITTEE
The Committee may appoint a sub committee, the quorum of which shall be the Chairman and one Non-Executive Director.
ATTENDANCE AT MEETINGS
The Group Chief Executive will be invited to attend meetings as required.
1. Specific Duties
The Committee shall:
- review the structure, size, composition (including skills, knowledge and experience) required of the Board and make recommendations as deemed appropriate;
- be responsible, having evaluated the balance of skills, knowledge and experience on the Board, for identifying and nominating, for the approval of the Board, candidates to fill Board vacancies as and when they arise, giving full consideration to succession planning. In identifying suitable candidates the Committee shall use open advertising or the services of external advisers as deemed appropriate, consider candidates from a wide range of backgrounds on merit against objective criteria;
- ensure that on appointment to the Board, non-executive directors receive a formal letter of appointment clearly setting out what is expected of them in terms of time commitment, committee service and involvement outside Board meetings and review annually the time required from non-executive directors;
- make recommendations to the Board concerning succession planning, suitable candidates for the role of senior independent director, membership of Board committees in consultation with the Chairmen of those committees, the re-appointment of non-executive directors at the conclusion of their specified term of office, re-election by shareholders of any director under the retirement by rotation provisions, continuation in office of any director and termination of employment of executive directors.
1.1 Reporting Responsibilities
- The Committee Chairman shall report to the Board on its proceedings after each meeting on all matters within its duties and responsibilities where appropriate.
- The Committee shall make whatever recommendations to the Board it deems appropriate on any area within its remit where action is needed.
- The Committee shall make a statement in the annual report about its activities, the process used to make any appointments and explain if external advice or open advertising has not been used.
1.2 Other
- Board will evaluate effectiveness of the committee.
1.3 Authority
- The Committee is authorised to seek any information it requires from any employee of the Group in order to perform its duties.
- The Committee is authorised to obtain, at the Group's expense, outside legal or other professional advice on any matters within its terms of reference.
