Corporate Governance >
The Board of Molins PLC has established certain principles and procedures to ensure proper governance of the Group and its businesses. These are described in outline in the Corporate governance statement in the latest Annual Report and Accounts. The terms of reference of the committees of the Board can be viewed by clicking on the appropriate link below.
AUDIT COMMITTEE TERMS OF REFERENCE
(established by resolution of the Board on 17 February 2011)
1. COMPOSITION AND AUTHORITIES
1.1 The Chairman and members of the Audit Committee (“the Committee”) shall be appointed by the Board.
1.2 The Committee shall comprise at least two Directors of the Company, none of whom shall hold executive responsibility in the Company and all of whom shall be independent as determined by the Board.
1.3 The Company Secretary or his nominee shall act as secretary of the Committee.
1.4 The quorum necessary for the transaction of business shall be two members. A duly convened meeting of the Committee at which a quorum is present shall be authorised to exercise all or any of the powers and discretions vested in or exercisable by the Committee.
1.5 The Committee shall meet at least three times a year. The external auditor may request a meeting if they consider that one is necessary.
1.6 Only Audit Committee members shall be entitled to be present at Audit Committee meetings. A representative of the external auditors shall normally attend meetings. The Chairman of the Board, the Chief Executive, Finance Director and any other board member or senior executive shall attend Audit Committee meetings at the invitation of the Audit Committee Chairman.
1.7 At least once a year the Committee shall meet with the external auditors without executive Board members or management present.
1.8 The Committee is authorised by the Board to obtain outside legal or other independent professional advice and to secure the attendance of outsiders with relevant experience and expertise if it considers this necessary. The Company shall meet the expense of such advice.
1.9 The Committee is authorised by the Board to investigate any activity within its terms of reference. It is authorised to seek any information it requires from any employee and all employees are directed to co-operate with any request made by the Committee.
1.10 The Committee shall be offered the opportunity to attend meetings with major shareholders by the chairman and/or chief executive. The Committee shall expect to attend meetings with major shareholders if their presence is requested by major shareholders.
2. RESPONSIBILITIES
2.1. The responsibilities of the Committee shall be:
(a) to oversee the company's relations with the external auditors;
(b) to consider, and make recommendations on the appointment, re-appointment and removal of the external auditors;
(c) to approve the terms of engagement and remuneration to be paid to the external auditors in respect of audit services provided;
(d) to assess annually the qualification, expertise and resources, effectiveness and independence of the external auditors;
(e) to discuss with the external auditors before the audit commences the nature and scope of the audit, and ensure co-ordination where more than one audit firm is involved;
(f) to review the half-year and annual financial statements before submission to the Board, focusing particularly on:
(i) any changes in accounting policies and practices;
(ii) key accounting and audit judgements;
(iii) the extent to which the financial statements are affected by any unusual transactions in the year and how they are disclosed;
(iv) the clarity of disclosures;
(v) significant adjustments resulting from the audit;
(vi) the going concern assumptions;
(vii) compliance with accounting standards;and
(vii) compliance with London Stock Exchange, Financial Services Authority and legal requirements.
(g) to discuss problems and reservations arising from the interim and final audits, and any matters the external auditors may wish to discuss;
(h) to review the external auditor's management letter and management's response;
(i) to review the external audit representation letters before consideration by the Board, giving particular consideration to non-standard issues;
(j) to develop and recommend to the Board the Company’s policy in relation to the employment of former employees or partners of the auditors and the provision of non-audit services provided by the external auditors and ensure that the provision of such services does not impair their independence or objectivity;
(k) to review the Company's statement in the annual report and accounts on the Company’s internal control systems and risk management framework prior to endorsement by the Board;
(l) to assess the scope and effectiveness of the systems established by management to identify, assess, manage and monitor financial and non-financial risks;
(m) to review the internal audit programme and ensure co-ordination between internal audit and the external auditors;
(n) to ensure that the internal audit function is adequately resourced and has appropriate standing within the Company;
(o) to ensure that the internal auditors have direct access to the Board Chairman and the Audit Committee and is accountable to the Audit Committee;
(p) to receive reports on the results of internal audit work on a periodic basis and to review and monitor management’s response to the internal audit findings and recommendations;
(q) to monitor and assess the role and effectiveness of the internal audit function in the overall context of the Company’s risk management system;
(r) to be consulted about the appointment or the removal of the internal auditors;
(s) to review the Company’s procedures for detecting, monitoring and managing the risk of fraud. All confirmed instances of fraud should be reported for review by the Audit Committee; and
(t) to consider other topics, as defined by the Board.
2. Conflicts of interest
(a) The Committee shall, In respect of each director, review any interests the director may have which conflict or may conflict with the interests of the Company; and
(b) the Committee will make recommendations to the Board as to whether any such conflict or potential conflict should be authorised and, if so, as to the terms and conditions on which any such authorisation should be given by the Board; and
(c) the Committee will review on a bi-annual basis any authorisation given by the Board in order to determine whether the authorisation given should stand on the terms and conditions on which it has been given or whether additional terms and conditions should be imposed or whether the authorisation should be revoked (subject to giving the relevant director notice of the proposed revocation; and
(d) in the case of a review of the interests of, and authorisations given by the Board to members of the Committee, the affected director shall not participate in the review or in discussions or decisions of the Committee which relate to that director.”
3. REPORTING
3.1. The Committee shall report to the Board as appropriate.
3.2. The Committee shall prepare a report on its role and responsibilities and the actions it has taken to discharge those responsibilities for inclusion in the annual report and accounts.
3.3. The Chairman of the Committee shall be available to respond to any shareholders’ questions at any general meeting of the Company.
3.4. The Committee shall annually review its terms of reference and its own effectiveness and recommend any changes to the Board.
4. DUTIES OF THE SECRETARY
4.1. The Secretary shall be required to keep a proper and timely record of meetings of the Committee and circulate such minutes to all members of the Committee, the Board and to the Company’s external auditors.
4.2. The Secretary shall ensure that the Committee is properly constituted within these terms of reference. Any actual or anticipated variance of these terms should be brought to the attention of the Chairman of the Committee and the Chairman of the Company as appropriate.
4.3. The Secretary shall ensure that these terms of reference are publicly available.
NOMINATION COMMITTEE TERMS OF REFERENCE
(established by resolution of the Board on 17 November 2003)
1.1. The membership of the Nomination Committee (“the Committee”) shall be determined by the Board.
1.2. The Committee shall comprise the Chairman of the Company and sufficient number of other directors of the Company, none of whom shall hold executive responsibility in the Company and all of whom shall be independent as determined by the Board, to ensure that, at any time, the independent non-executive directors shall constitute the majority of the Committee.
1.3. The Chairman of the Committee shall be the Chairman of the Company (except in relation to the appointment of the Chairman of the Company, when the Chairman shall invite a non-executive member of the Committee to chair the Committee on his or her behalf).
1.4. The Company Secretary or his nominee shall act as the secretary of the Committee.
1.5. The quorum necessary for the transaction of business shall be two members of whom at least one must be an independent non-executive director. A duly convened meeting of the Committee at which a quorum is present shall be authorised to exercise all or any of the powers and discretions vested in or exercisable by the Committee.
1.6. The Committee shall meet at least once a year and at such other times as the Chairman of the Committee shall require.
1.7. The Committee may, at its discretion, invite other directors of the Company to attend meetings of the Committee, except where their own nomination or declarations of interest are under discussion.
1.8. The Committee may, at its discretion, appoint and instruct suitably experienced and qualified persons to act as advisers to the Committee and attend such meetings as the Committee may decide. The Company shall meet the expense of such advice.
2. RESPONSIBILITIES
2.1 The Committee's principal responsibilities are to:
(a) consider and recommend for approval to the Board the appointment of suitable persons as directors of the Company and to lead the process for such appointments;
(b) monitor:
(i) the composition of the Board and its committees; and
(ii) the work of the executive management in developing individuals with the capability of becoming executive directors or filling other senior positions in the Company.
2.2 Accordingly, the Committee shall:
(a) Identify and recommend to the Board suitable candidates for consideration as executive or non-executive directors, including the positions of Chairman and Chief Executive of the Company. In the fulfilment of this duty, the Committee shall consider candidates from a wide range of backgrounds.
(b) Evaluate the balance of skills, knowledge and experience of the Board prior to making an appointment and, in the light of this evaluation, prepare a description of the role and capabilities required for a particular appointment.
(c) Monitor annually the extent to which any non-executive director should be considered by the Company to be independent and make recommendations to the Board.
(d) Ensure that on appointment to the Board, non-executive directors receive a formal letter of appointment, setting out what is expected of them in terms of time commitment, committee service and involvement outside Board meetings.
(e) Consider the reappointment of the non-executive directors and make recommendations to the Board.
(f) Regularly review the structure, size and composition of the Board and its Committees (including the balance of skills, knowledge and experience) and make recommendations to the Board for any adjustments.
g) Review annually the time commitment required of non-executive directors and make recommendations to the Board.
(h) Consider succession planning for appointments to the Board and to the Group Executive and keep under review the leadership needs of the Company, both executive and non-executive, with a view to ensuring the continued ability of the Company to compete effectively in the marketplace, and make recommendations to the Board.
(i) Make a statement in the annual report detailing the activities of the Committee and the process used for appointments.
(j) Consider requests from executive directors for election to the boards of other companies and, if agreed, to recommend approval to the Board, having weighed the developmental benefits for the individual with the likely demands of the role and his or her responsibilities as an employee of the Company.
2.3 Conflicts of interest
(a) The Committee shall, as part of the process for nominating candidates for appointment, obtain details of and review any interests the candidate may have which conflict or may conflict with the interests of the Company; and
(b) the Committee shall consider whether, despite any such conflict, there are nevertheless grounds for recommending the candidate for appointment and for the Board to authorise the relevant conflict; and
c) the Committee shall as part of any proposal to the Board for appointment of the relevant candidate, explain these grounds and make recommendations as to the terms and conditions on which any authorisation of the conflict should be given by the Board.
3. REPORTING
3.1. The Committee shall report as appropriate to the Board.
3.2. The Committee shall review any disclosures that the Company is required to make in respect of its activities, making any recommendations on how such disclosures should be presented for consideration by the Board.
3.3. The Chairman of the Committee shall be available to respond to any shareholders’ questions at any general meeting of the Company.
3.4. The Committee shall annually review its terms of reference and its own effectiveness and recommend any changes to the Board.
4. DUTIES OF THE SECRETARY
4.1. The Secretary shall be required to keep a proper and timely record of meetings of the Committee and circulate such minutes to all members of the Committee. Such records should also be made available for inspection by Board and the Company’s external auditors on request.
4.2. The Secretary shall be required to make available to the Committee full and relevant information as the Committee may require to inform its decisions.
4.3. The Secretary shall ensure that the Committee is properly constituted in accordance with these terms of reference. Any actual or anticipated variance of these terms should be brought to the attention of both the Chairman of the Committee and the Chairman of the Company, as appropriate.
4.4. The Secretary shall ensure that these terms of reference are publicly available.
REMUNERATION COMMITTEE TERMS OF REFERENCE
(established by resolution of the Board on 17 November 2003)
1. COMPOSITION AND AUTHORITIES
1.1 The membership of the Remuneration Committee (“the Committee”) shall be as determined by the Board.
1.2 The Committee shall comprise at least two directors of the Company, none of whom shall hold executive responsibility in the Company and all of whom shall be independent as determined by the Board.
1.3 The Board shall appoint the Chairman of the Committee who shall not hold executive responsibility and shall not be the Chairman of the Company. In the absence of the Chairman of the Committee, the remaining members present shall elect one of themselves to chair the meeting who would qualify under these terms of reference to be appointed to that position by the Board.
1.4 The Secretary or his nominee shall act as the secretary of the Committee.
1.5 The quorum necessary for the transaction of business shall be two members. A duly convened meeting of the Committee at which a quorum is present shall be authorised to exercise all or any of the powers and discretions vested in or exercisable by the Committee.
1.6 The Committee shall meet at least twice a year and at such other times as the Chairman of the Committee shall require.
1.7 Other executives of the Company may be invited by the Committee to attend for all or part of any meeting of the Committee but shall not be involved in any decisions relating to their own remuneration.
1.8 The Committee may appoint and instruct suitably experienced and qualified persons to act as advisers to the Committee who may attend such meetings as the Committee shall decide on matters within the Committee’s terms of reference. The Company shall meet the expense of such advice.
1.9 The Committee is authorised by the Board to seek any information it requires from any employee of the Company in order to perform its duties and may request that the Secretary obtain this information on their behalf.
2. RESPONSIBILITIES
2.1 The responsibilities of the Committee shall be to:
(a) Make recommendations to the full Board of directors on the strategy and policy for the remuneration of the Chairman of the Company, the executive directors, the Secretary and such other members of the senior management team as it is designated to consider.
(b) In consultation with the Chairman of the Company or the Chief Executive Officer, as appropriate, determine the salaries, fees and other remuneration of the Chairman of the Company, the executive directors, the Secretary and such other members of the senior management team as it is designated to cover. The remuneration of non-executive directors shall be a matter for the Chairman of the Company and the executive members of the Board.
(c) Consider, in carrying out the duties at a) and b), in consultation with the Chairman of the Company, or the Chief Executive Officer as appropriate, proposals on the strategy and policy for the remuneration of the executive directors having regard to the remuneration trends across the Company.
(d) Approve the design of and determine the conditions and coverage of any annual incentive schemes for the executive directors, the Secretary and such other members of the senior management team as it is designated to cover.
(e) Review the design of any share incentive plans for approval by the Board subject to the agreement, as required, by shareholders in general meeting. For any such plans, determine each year whether awards will be made, and if so, the overall amount of such awards, including the individual awards to the executive directors, the Secretary and such other members of the senior management team as it is designated to cover and the performance targets to be used.
(f) Determine the policy for and scope of pension arrangements for each executive director and the Secretary.
(g) Approve the design of and determine the targets for any performance related pay schemes operated by the Company for the benefit of executive directors, the Secretary and such other members of the senior management team as it is designated to cover and approve annual payments made under such schemes.
(h) Determine the scope and content of the service contracts (or letters of appointment) of the Chairman of the Company, the executive directors and the Secretary.
(i) Determine the extent of any compensation in the event of the termination of the service contract of the executive directors and the Secretary to ensure the compensation payment is fair to the individual and the Company, that failure is not rewarded and the duty to mitigate loss is recognised.
(j) Agree the policy for authorising claims for expenses from the directors.
(k) Approve the employment of former executive directors by the Company as consultants.
(l) Obtain reliable, up-to-date information about remuneration in other companies. To help it fulfill its obligations the Committee shall have authority to appoint remuneration consultants and to commission or purchase such reports, surveys or information which it deems necessary, within any budgetary restraints imposed by the Board.
2.2 In carrying out its responsibilities, the Committee shall give due consideration to all applicable laws and regulations, the guidance on remuneration principles and practice as set out in The UK Corporate Governance Code and the UK listing Authority’s Listing, Prospectus and Disclosure and Transparency Rules and any other relevant guidance.
3. REPORTING
3.1 The Committee Chairman shall report to the Board after each meeting of the Committee on those matters within its duties and responsibilities.
3.2 The Committee shall produce an annual report on all aspects of the remuneration of the Chairman of the Company and the executive directors for approval by the Board for inclusion in the Company’s Annual Report and Accounts to be put to shareholders for approval at the AGM.
3.3 The Committee shall review any disclosure that the Company is required to make in respect of its activities, making any recommendations on how such disclosures should be represented for consideration by the Board, in particular to ensure that the provisions regarding the disclosure of remuneration, as listed in the Directors’ Remuneration Report Regulations 2002, are fulfilled.
3.4 The Chairman of the Committee shall be available to respond to any shareholders’ questions at the annual general meeting of the Company.
3.5 The Committee shall annually review its terms of reference and its own effectiveness and recommend any changes to the Board.
4. DUTIES OF THE SECRETARY
4.1 Meetings of the Committee shall be called by the Secretary at the request of the Chairman of the Committee.
4.2 Unless otherwise agreed, notice of each meeting confirming the venue, time and date together with an agenda of items to be discussed, shall be sent to each member of the Committee, any other person required to attend and all other non-executive directors, in good time for the meeting. Supporting papers will be sent to Committee members and other attendees, as appropriate, at the same time or shortly thereafter.
4.3 The Secretary shall be required to keep a proper and timely record of meetings of the Committee and circulate such minutes to all members of the Committee. Such records should also be made available for inspection by the Board and the Company’s external auditors on request.
4.4 The Secretary shall be required to make available to the Committee full and relevant information as the Committee may require to inform its decisions.
4.5 The secretary shall ensure that the Committee is properly constituted in accordance with these terms of reference. Any actual or anticipated variance of these terms shall be brought to the attention of the Chairman of both the Committee and the Nomination Committee and the Chairman of the Company, as appropriate.
4.6 The Secretary shall ensure that these terms of reference are publically available.
5. OTHER MATTERS
5.1 The Committee shall:
a) Have access to sufficient resources in order to carry out its duties, including access to the Secretary for assistance when required.
b) Be provided with appropriate and timely training, both in the form of an induction programme for new members and on an ongoing basis for all members.