Professional Documents
Culture Documents
Responsibility:
Board Committees
Remuneration committee
Remuneration Committee deals with the remuneration of
executive directors and senior managers
Some believe that the remuneration of directors should be
linked to company performance.
Level of remuneration should be sufficient to attract, retain
and motivate directors to do a good job, not overpay them.
There should be a final and transparent procedure for
developing policy on executive remuneration
No director should be involved in deciding his or her own
remuneration
The committee should be made up of independent NEDs.
Nomination committee
The Nominations Committee has the responsibility to
identify and recommend individuals for appointment to the
board and executive director.
Nomination committee should also consider:
The desirable size of the board.
The skills of the board members. Combined code recommends at
least one NED have financial expertise (aka qualified accountant).
The Nominating Committee should develop, maintain and review
the criteria to be used in the recruitment process and annual
assessment of directors (MCCG, 2012)
The board should establish a Nominating Committee which should
comprise exclusively of non-executive directors, a majority of
whom must be independent (MCCG, 2012)
Risk committee
This board committee would have oversight responsibility for
risk and internal control
Roles of risk committee
Audit committee
The audit committee is considered to be the most important board
committee.
At least three, or in the case of smaller companies, two, independent NEDs.
At least one member of the AC has recent and relevant financial experience.
To ensure that the external auditors are completely independent of the
company and its subsidiaries, and that they are working in the best
interests of the shareholders
To ensure that both the external and internal auditors have sufficient
resources to carry out their defined roles
To act as a mediator between management and auditors when there is
dispute
Advise the full board on audit and internal control functions. If the board
does not accept the ACs recommendation, it should include the reasons in
the annual report.