The committee's principal function is to monitor the integrity of the group's financial reports and to manage the board's relationship with the group's external auditors.
Other functions include the regular review and monitoring of:
- The financial reporting process;
- The annual audit;
- The effectiveness of the group's internal controls;
- The group's internal audit and risk management systems; and
- The independence of the external auditor and the provision of non-audit services.
The committee is required to report its findings to the board, identifying any matters on which it considers that action or improvement is needed and to make recommendations on the steps to be taken.
At least once a year, the committee meets with the external auditor and the Head of Internal Audit without executive management present. The committee chairman also regularly meets with the Head of Internal Audit and the external auditors, again without any other member of management being present.
The committee's terms of reference include all relevant matters required by Rule 7.1.3 of the Disclosure and Transparency Rules and the UK Corporate Governance Code.
Audit committee report, Andrew Wood, Chairman of the audit committee:
2015 key achievements
- Reviewed the significant financial judgements made during the year and in the preparation of the Annual Report and Accounts;
- At the request of the board, conducted a review of the 2015 Annual Report to confirm that it was fair, balanced and capable of being understood by shareholders;
- Assisted with the design of the process by which the board assessed the ongoing viability of the company in support of the viability statement required under the 2014 UK Corporate Governance Code
- Approved improved risk management processes to ensure these are more responsive to any potential changes in activities or the business environment
- Ensured a comprehensive Internal Audit Programme and oversaw the recruitment and induction of a new Head of Internal Audit;
- Assisted with the induction of the new external audit partner;
- Conducted a review of the external auditor's work throughout the year and made a final recommendation to the board to reappoint PricewaterhouseCoopers LLP for the year ending 31 December 2016.
Areas of focus in 2015
- Review the significant judgements applied in the preparation of the Annual Report and Accounts;
- Ensure that the key risks identified by the board are effectively managed during the implementation of the new strategy;
- Conduct a review of our policy on non-audit services during the first six months of 2016;
- Conduct a review of internal controls and risk management following the completion of the strategy review;
- Review the independence and effectiveness of the external auditor;
- Ensure that there is a comprehensive internal audit programme.
If you would like to discuss any aspect of the committee's activities with me, please feel free to email me at firstname.lastname@example.org
Audit committee composition, independence and attendance 2015
In addition to its members, other individuals and external advisers may attend each committee meeting at the request of the committee chairman. The company provides an induction programme for new committee members and on at least an annual basis also provides ongoing training to enable the committee members to carry out their duties.
The nomination committee is responsible for regularly reviewing the composition of the board, taking into account the benefits of diversity, the breadth of experience and skills required. The committee also makes recommendations with regard to any changes to board and senior executive succession planning and provides recommendations to the board as to the appointment and reappointment of all directors.
The members of the nomination committee are required to have an understanding of:
- The strategic issues and commercial changes affecting the company and the market in which it operates and how they affect succession planning and board composition;
- The leadership needs of the organisation, both executive and non-executive, with a view to ensuring the continued ability of the group to compete effectively;
- The importance and benefits of diversity (including gender); and
- The requirements under the UK Corporate Governance Code and best practice guidance on effective board and committee composition.
The terms of reference of the committee were reviewed and approved by the board in December 2013.
Nomination committee report, Iain Ferguson, Chairman of the nomination committee:
2015 key achievements
- The successful recruitment of James Drummond as Chief Executive Officer;
- Monitored the comprehensive handover and induction programme designed for James to ensure it was effective and carefully tailored to requirements;
- Reviewed the findings of the group's first Employee Engagement Survey; and
- Considered the extension of Andrew Wood's and David Lowden's appointments for a further three-year term.
Areas of focus in 2016
- Conduct a thorough board composition review following the completion of the strategy review;
- Review the findings of the group's second employee engagement survey; and
- Continue to focus on succession planning and talent development.
If you would like to discuss any aspect of the committee's activities with me, please feel free to email me at email@example.com
Nomination committee composition, independence and attendance in 2015
At the request of the committee chairman, other individuals and external advisers may be invited to attend all or part of any meeting, as and when appropriate. The Chief Executive Officer's role on the committee is to provide a better understanding of the strategic issues facing the company and the current skills and experience of the Executive Board.
Upon appointment to the committee, non-executive directors are provided with details about the current composition of the board, the company's succession planning procedures and how the board's and committees' annual performance reviews are conducted. Induction to the committee includes detailed briefings with the Chairman and Chief Executive Officer in order to understand the issues being discussed at board and Executive Board level.
The role of the committee is to determine and recommend to the board a fair and responsible remuneration framework for ensuring that the company's most senior executives are appropriately rewarded and incentivised for their contribution to company performance.
The committee's primary purpose is to ensure that there is a clear link between reward and performance and that the policy, structure and levels of remuneration for both the executive directors and throughout the group:
- Reinforce the strategic aims and objectives of the business, whilst mitigating any risk factors;
- Are aligned to maximise shareholder value on a sustainable basis;
- Are capable of securing, retaining and motivating high calibre individuals to deliver results for shareholders, customers and employees alike;
- Are market competitive, rewarding individuals in line with genuine group performance; and
- Encourage and promote appropriate behaviours and outcomes consistent with the culture of the group.
The committee's terms of reference is available to download from the link below. In addition, our current Remuneration Policy, as approved by shareholders at the 2014 AGM. Is available to download below.
Committee activity during 2015
Remuneration committee composition, independence and attendence in 2015
The committee's composition, responsibilities and operation comply with the principles of good governance (as set out in the UK Corporate Governance Code), with the Listing Rules (of the Financial Conduct Authority) and with the Companies Act 2006. All members of the committee are considered independent non-executive directors and no member (or attendee) was present when their own remuneration was considered.