Audit and risk committee
Terms of reference
- MEMBERS & MEETINGS
- Members of the Remuneration Committee shall be appointed by the Board, on the recommendation of the Nomination Committee in consultation with the chairman of the Remuneration Committee. The minimum number of members shall be two. All members of the Committee shall be independent Non-Executive Directors who are considered by the Board to be independent, as determined by reference to the QCA Corporate Governance Code (the “QCA Code”).
- Only members of the Committee have the right to attend meetings. However, other individuals such as the chief executive officer, directors and external advisers may be invited to attend for all or part of any meeting, as and when appropriate.
- Appointments to the Committee are made by the Board and shall be for a period of up to three years which may be extended for further periods of three years provided the director still meets the criteria for membership of the Committee.
- The Board shall appoint the Committee Chairman who should be an independent Non-Executive Director. In the absence of the Committee chairman and/or an appointed deputy, the remaining members present shall elect one of themselves to chair the meeting.
- Two members of the Committee shall constitute a quorum. Matters arising at any meeting that require a vote of the Committee shall be decided by a majority of votes. If a vote is required, each member of the Committee present at a meeting of the Committee shall have one vote. A member of the Committee shall not vote in respect of any matter being considered by the Committee in which he has, directly or indirectly, a personal interest and shall not be counted in the quorum at a meeting in relation to any matter on which he cannot vote. If required under circumstances where there is an equal number of votes in favour of and against a particular matter arising, the chairman shall have a second and casting vote.
- Committee meetings shall be held not less than twice a year and at such other times as the Chairman of the committee shall require. Meetings of the committee shall be called by or on behalf of the chairman of the Committee.
- The chairman of the Committee shall ensure that appropriate minutes of its proceedings are kept. The chairman can request the Company Secretary or his nominee to act as the secretary of the Committee and ensure that the Committee receives information and papers in a timely manner to enable full and proper consultation to be given to all issues. The appointed secretary of the Committee shall keep a record of all minutes and attendances at all meetings. The chairman of the Committee shall make available the minutes of meetings of the Committee, once agreed, to all members of the Board, unless in the opinion of the Committee Chairman it would be inappropriate to do so.
- ANNUAL GENERAL MEETING
- The Committee chair should attend the Company’s annual general meeting to answer any shareholder questions on the Committee’s activities.
- DUTIES
- The Committee should develop a formal and transparent procedure for developing policy on executive remuneration and determining remuneration.
- The Committee shall:
- determine and agree with the Board the policy for the remuneration of the Chairman, the executive directors, the company secretary and such other members of the executive management as it is required by the Board to consider. The remuneration of non-executive directors shall be a matter for the executive members of the Board;
- review and approve long and short term incentive plans and payments including but not limited to share incentive plans, option plans, performance targets, bonuses, goals and remuneration package recommendations from the CEO in respect of executive directors. For any such share incentive plans, the Committee shall determine each year whether awards will be made, and if so, the overall amount of such awards, the individual awards to executive directors, Company secretary and other designated senior executives and the performance targets to be used;
- ensure that members of the senior management of the Company 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 Company;
- review and approve long and short term incentive plans for the Company;
- in determining remuneration packages and incentive arrangements, give proper consideration to any relevant legal and regulatory requirements, guidelines and corporate governance codes for similar small and mid-size quoted companies and attain shareholder approval where applicable for any incentive plans. The objective of such remuneration packages and incentive arrangements shall be to attract, retain and motivate executive management of the quality required to run the Company successfully through packages which are fair and attractive, but not excessive, having regard to views of shareholders and other stakeholders. The remuneration policy should have regard to the risk appetite of the Company and alignment to the Company’s long strategic term goals. A significant proportion of remuneration should be structured so as to link rewards to corporate and individual performance and designed to promote the long-term success of the Company;
- review and consider the remuneration across the Company or group when determining remuneration policy and plans for executive directors and senior management;
- consider and determine the other provisions of the service agreements of directors and (if required by the Board) other senior management (in particular, the term of their agreement, the length of any notice period, termination payments and compensation commitments);
- approve the design of, and determine targets for, any performance-related remuneration schemes operated by the Company and approve the total annual payments made under such schemes;
- agree a policy for authorising claims for expenses of the executive directors;
- determine the policy for, and scope of, pension arrangements for each executive director and other senior executives;
- ensure that contractual terms on termination, and any payments made, are fair to the individual and the Company, that failure is not rewarded and that the duty to mitigate loss is fully recognised;
- ensure there is proper disclosure of remuneration in accordance with regulatory requirements;
- be exclusively responsible for establishing the selection criteria, selecting, appointing and setting the terms of reference for the remuneration consultants who advise the Committee;
- obtain reliable, up-to-date information about remuneration in other companies of comparable size. To help fulfil its obligations, the Committee shall have full authority to appoint remuneration consultants and to commission or purchase any reports, surveys or information which it deems necessary at the expense of the Company to fulfil its obligations within any budgetary restraints imposed by the Board;
- through the chair of the Board, ensure that the Company maintains contact as required with its principal shareholders about remuneration;
- oversee any major changes in employee benefits structures throughout the Company or group;
- work and liaise as necessary with all other Board committees; and
- consider any matters as may be requested by the Board.
- OTHER
- 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 produce a report on its policies and practices that shall to be included in the Company’s annual report.
- The Committee shall have access to the necessary resources for development and updating the directors’ knowledge and capabilities, including access to the Company secretary for assistance as required;
- The Committee shall be provided with appropriate and timely training, both in the form of an induction programme for new members and on an on-going basis for all members;
- The Committee shall give due consideration to laws and regulations, the provisions of the UK Corporate Governance Code, the QCA guidance, the AIM Rules and any other applicable rules, as appropriate;
- The Committee shall review the ongoing appropriateness and effectiveness of the remuneration policy and Committee, reviewing at least annually, the Committee’s own performance and terms of reference to ensure it is operating effectively and recommend any changes it considers necessary for improvement to the Board for approval; and
- The remuneration of the non-executive directors (including the Chairman, if non-executive) shall be a matter for the executive members of the Board.
- AUTHORITY
- The Committee is authorised to seek any information it requires directly from any director or employee of the company in order to perform its duties. The Committee is authorised to obtain, at the Company’s expense, outside independent legal or professional advice relevant to its duties.
- Members
- M. Sunmonu (Chair), J. Brown
