The Board has established a Committee known as the Nominations & Governance Committee to assist it in fulfilling its responsibilities in relation to corporate governance.
The Committee is authorised by the Board to:
- investigate any matter within its Terms of Reference;
- seek any information it requires from any employee. All employees are directed to co-operate with any reasonable request made by the Committee.
- obtain, at the Society’s expense, outside advice on any matters within its Terms of Reference and to arrange for the attendance of other persons with relevant experience and expertise if it considers this necessary.
The Nominations & Governance Committee will:
- consider proposed appointments to the Board and make recommendations to the Board on this topic;
- assist the Board with compliance and corporate governance standards;
- oversee the Board’s compliance with Senior Managers’ Regime.
Meetings and Membership
The Committee will be chaired by the Chairman of the Board. The Chairman of the Board shall not chair the Committee when it is dealing with the matter of succession to the chairmanship of the Society.
The Committee shall consist of the Chairman, Deputy Chairman, the Senior Independent Director (if the roles are separate) and one other Non-Executive Director.
The Chief Executive will attend meetings of the Committee except when Chief Executive succession planning is being discussed. Any other employee of the Society may be asked to attend meetings as required.
The Committee shall meet at least twice a year and otherwise as required.
Meetings of the Committee will be quorate if there are at least three members present. If the Chairman is absent the other members present will choose one of their number to chair the meeting.
The General Counsel & Secretary, or their nominee shall act as the secretary of the Committee.
Formal minutes of the meetings of the Committee will be taken and circulated to members and other regular attendees for the relevant meeting.
A Summary of each meeting will be submitted to the Board in the month following the meeting. In addition, the Chairman will verbally report to the Board after each meeting of the Committee.
The Chairman of the Committee will be available at the Society’s AGM to answer questions on matters falling within the Committee’s remit.
Duties of the Committee
The Committee shall have the following responsibilities:
1.1 regularly review the structure, size, composition and ways of working (including the skills, knowledge, experience and diversity) of the Board and will recommend changes to the Board, as appropriate, with a view to ensuring the continued ability of the Society to compete effectively and in line with its risk appetite;
1.2 give full consideration to succession planning for Directors and other senior management at executive grade, taking into account the challenges and opportunities facing the Society, and the skills and expertise needed on the Board in the future;
1.3 be responsible for identifying and nominating for the approval of the Board, candidates to fill Board vacancies as and when they arise;
1.4 before any appointment is made by the Board, evaluate the balance of skills, knowledge, experience and diversity on the Board, and, in the light of this evaluation prepare a description of the role and capabilities required for a particular appointment. In identifying suitable candidates the Committee shall:
1.4.1 use open advertising or the services of external advisers to facilitate the search;
1.4.2 consider candidates from a wide range of backgrounds; and
1.4.3 consider candidates on merit and against objective criteria and with due regard for the benefits of diversity on the Board, including gender, taking care that appointees have enough time available to devote to the position.
1.5 prior to the appointment of a Director, receive assurance that the proposed appointee (i) is compliant with the requirements detailed in the Society’s Fit and Proper Policy and has accepted in writing their obligation to comply with the terms of this policy and (ii) has provided the Society with satisfactory proof of any qualifications;
1.6 if required, prior to the appointment of a Director undertaking a role covered by the Senior Managers’ Regime, receive assurance that the proposed appointee (i) has accepted in writing the Statement of Responsibility relevant to their role and (ii) has been approved by the PRA/FCA to undertake the role of Director of the Society;
1.7 ensure that on appointment to the Board, Non-Executive Directors receive a formal letter of appointment setting out clearly what is expected of them in terms of, scope of responsibilities (including those under the Senior Managers’ Regime), time commitment, committee service and involvement in Society activities outside Board meetings;
1.8 ensure Directors of the Society achieve and maintain a suitable standard for compliance purposes as a Senior Manager as detailed in the Society’s Fit and Proper Policy. This include ensuring compliance with all applicable policies, procedures and guidance, and completion of mandatory training in appropriate timescales and maintaining an appropriate level of competence at any point in time, as required by the relevant role, the Society’s Fit and Proper Policy and status as a Senior Manager;
1.9 review annually (i) the Board Training Policy, (ii) the Board training programme , (iii) the scope of induction programmes for new Directors as required (iv) Access to Independent Advice Policy, and (v) the Handover Policy;
1.10 review and decide whether to recommend the Board Fit and Proper Policy prior to consideration by the Board;
1.11 review the Society’s Responsibilities Map as required under the Senior Managers’ Regime at least annually and review any change to any Statement of Responsibility for any member of the Society’s Board prior to recommendation to the Board;
1.12 review and approve any arrangements to appoint any other person or persons to act jointly with an existing member of the Board (in the event that an individual is not performing their duties for a prolonged period such as extended sickness absence);
1.13 review the directors’ independence annually prior to review by the Board;
1.14 determine conflicts of interests relating to a Director including those where Rule 24(1)(h) applies, as set out in the Conflicts of Interest Policy detailed in the Board Governance Manual;
1.15 review the performance criteria and the results of the Board performance evaluation process that relate to the composition of the Board;
1.16 review annually the time required from Non-Executive Directors. Performance evaluation provided by the Chairman should be used to assess whether the Non-Executive Directors are spending enough time to fulfil their duties;
1.17 decide on a target for the underrepresented gender on the Board and a policy as to how to reach that target;
1.1.8 review the Board Governance Manual at least annually; and
1.19 make recommendations to the Board concerning:
1.19.1 formulating plans for succession for both Executive and Non-Executive Directors and in particular for the roles of Chairman and Chief Executive;
1.19.2 suitable candidates for the role of Senior Independent Director and General Counsel & Secretary;
1.19.3 membership of the Audit, Remuneration and Risk Committees, and any other Board Committees as appropriate, in consultation with the chairman of those Committees;
1.19.4 the re-election by members of Directors under the Society’s Rules relating to the retirement by rotation, having due regard to their performance and ability to continue to the Board in the light of the knowledge, skills and experience required and the need for progressive refreshing of the Board (particularly in relation to Directors being re-elected for a term beyond six years);
1.19.5 any matters relating to the continuation in office of any Director at any time including in relation to the continued compliance with the FCA/PRA conduct rules issued under sections 64A and 64B of the Financial Services and Markets Act 2000 and the Society’s Fit and Proper Policy, including the suspension or termination of service of an Executive Director as an employee of the Society subject to the provisions of the law and their service contract;
1.19.6 the appointment of any Director to Executive or other office;
1.19.7 the methodology used to review the effectiveness of the Board and its Committee in alternate years beginning in 2015; and
1.19.8 the matters reserved to the Board following a review of the same.
1.19.9 arrange for periodic reviews of its own performance and, at least annually, review its 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 Nominations & Governance Terms of Reference are reviewed at least annually by the Committee. Any changes are approved by the Board and the up-to-date Terms of Reference are included in the Board Governance Manual.
These Terms of Reference were approved by the Committee at its meeting on 13 December 2016 and by the Board at its meeting on 25 January 2017.