Board Committees

The board has established three principal Board committees to which it has delegated certain responsibilities. They are the audit committee, remuneration committee and nominations committee. The roles, membership and activities of these committees are described in more detail below.

Audit Committee

Steve Rogers chairman of the audit committeeMembers
Steve Rogers (Chairman)
Phil White

Roles and responsibilities

The primary role of the Audit Committee is to keep under review the Group’s financial and other systems and controls and its financial reporting procedures. In fulfilling this role, the Committee receives and reviews work carried out by the internal and external auditors. The Company’s internal audit function works to an annual programme developed in consultation with the Committee, as well as covering specific matters arising during the year. The Committee keeps the scope and cost effectiveness of both the internal and external audit functions under review. This includes a regular review of the effectiveness of the external auditor.

Financial reporting and significant financial judgements
The Audit Committee reviews whether suitable accounting policies have been adopted and whether management has made appropriate estimates and judgements by reviewing reporting from both internal teams and the external auditors.

External audit
The Group has policies and procedures in place to ensure that independence and objectivity of the external auditor is not impaired. These include restrictions on the types of services that they can provide, in line with APB Ethical Standards on Auditing. As part of the tender process it was determined that PwC would not provide tax services and that these would remain with KPMG for 2014/15. PwC also provides confirmation to the Committee on the arrangements and safeguards it has in place to maintain its independence and objectivity. The Committee continues to be satisfied with their independence.

Internal audit
The Group’s internal audit function comprises a team of three qualified auditors. The purpose of the department is to support the business in its achievement of objectives and facilitate and aid effective risk management. Internal Audit provides assurance that the Group’s process for managing internal control is effective and appropriate to the level of risk facing the Group.

Risk Management
There is in place an ongoing process for identifying, evaluating and managing significant risks faced by the Group. This process is regularly reviewed by the Board and accords with Turnbull guidance. Risk Management Reports are prepared by the operating divisions supported by Internal Audit, and submitted to the Committee. The Reports identify the significant risks to the Group, highlighted controls that mitigate the risks and the resultant post-mitigation risk. The Committee also considers the tolerance levels that the Group is prepared to accept. The Committee is given regular updates on risk.

Internal Controls
The Committee monitors and reviews the effectiveness of the Group’s internal control systems, accounting policies and practices, risk management procedures and compliance controls.

The Group’s internal control systems are designed to manage rather than eliminate business risk. They provide reasonable but not absolute assurance against material mis-statement or loss. Such systems are necessary to safeguard shareholders’ investment and the Group’s assets and depend on regular evaluation of the extent of the risks to which the Group is exposed. Management is responsible for establishing and maintaining adequate internal control over financial reporting for the Group.

Whistleblowing and fraud
The Committee monitors the Group’s whistleblowing policy.

AUDIT COMMITTEE TERMS OF REFERENCE

Remuneration Committee

Phil White chairman of the remuneration committeeMembers
Phil White (Chairman)
Steve Rogers

Policy overview

The Group aims to balance the need to attract, retain and motivate executive directors of an appropriate calibre with the need to be cost effective, whilst at the same time rewarding exceptional performance.

The Committee aims to has design a remuneration policy that balances those factors, taking account of prevailing best practice, investor expectations and the level of remuneration and pay awards made generally to employees of the Group.

In addition to the above, the remuneration policy for the executive directors is based on the following key principles:

  • A significant proportion of remuneration should be tied to the achievement of specific and stretching performance conditions that align remuneration with the creation of shareholder value and the delivery of the Group’s strategic plan.
  • There should be a focus on sustained long term performance measured over clearly specified timescales, encouraging executives to take action in line with the Group’s strategic plan.
  • Individuals should be rewarded for success but steps should be taken, within contractual obligations, to prevent rewards for failure.

REMUNERATION COMMITTEE TERMS OF REFERENCE

Nominations committee

Members
Jeremy Pilkington (Chairman)
Steve Rogers
Phil White

NOMINATION COMMITTEE TERMS OF REFERENCE