Financial Statements 40 - 79 Company Information 80 - 82
Monitoring Business Risk
The Committee reviews and monitors the approach to risk management and overall risk management arrangements. It reviews the management of significant enterprise risks identified within the business.
Following the internal restructure of the business into defined Business Units at the end of 2013, the ERM programme was reviewed and updated during 2014. The ERM programme aims to cover the key risks facing the Group as a whole and what actions are taken to mitigate these risks. The programme incorporates a methodology for identifying risks, rating their impact and tolerance level for those risks, and assigning risk owners to take action to mitigate the risks identified. Every quarter, a report is produced by the Chief Risk Officer, supported by RCGT, which states the status of the implementation plan used to mitigate identified risks, to highlight those risks that have exceeded their tolerance levels and, every six months, emerging risks are highlighted and reviewed.
A Risk Management Committee, comprising of senior management with the Group’s General Counsel acting as Chairman, has been set up. This committee monitors business risk and coordinates actions taken within the Group to mitigate those risks and to improve policies and procedures where necessary. Minutes of the Risk Management Committee are submitted to each Audit Committee meeting for review.
The Committee continues to monitor the effectiveness of the internal audit, risk and compliance functions by demanding the highest levels of performance and accountability from those responsible and who report in to Committee.
External Audit
The Committee considers and recommends the reappointment of the Company’s external auditor and the fees considered appropriate to such appointment. Following a review of the auditor’s performance by gathering feedback from senior management, considering the audit scope, planning and performance of the lead audit partner and the audit team, audit reporting and communications and added value commensurate to the audit fee, the Committee recommends the reappointment of KPMG Audit LLC as the Company’s auditor for 2015.
KPMG Audit LLC has been the external auditor to the Company since 2005. The current Audit Partner was appointed in 2012.
Both the Board and external auditors have safeguards in place to avoid the possibility that the auditor’s objectivity and independence could be compromised. The Group’s policy in respect of services provided by the external auditors is as follows:
• audit related services – the external auditors are invited to provide services which, in their position as auditors, they must be or are best placed to
undertake;
• tax consulting – in cases where they are best suited, the external auditors are used. All other tax consulting work is put out to tender. Since 2011,
the Group has used Deloitte to provide international tax advice;
• due diligence for acquisitions – in cases where they are best suited, the external auditors are used, however for the most recent acquisitions over the
last two years, the Group has used Deloitte to undertake the due diligence work; and
• general consulting – in recognition of public concerns over the effect of consulting services on auditors’ independence, the Group’s policy is that the
external auditors are not invited to tender for general consulting work.
The external auditor met separately with the Committee twice during the year without the presence of Executive Management. The external auditor also has access to the Chairman of the Committee and meets with him, between meetings, where necessary.
The split between audit and non-audit fees for the year ended 31 December 2014 appears in Note 31 to the accounts. Ian Francis
Chairman of the Audit Committee 22 March 2015
Nomination Committee membership
Meetings attended
Name Position (out of a possible 3)
Andrew Dark2,3 Chairman 1/1
Ian Francis Member 2/3
Brahm Gelfand1 Member 2/2
Ian Jenks2 Member 1/1
Dennis Jones2 Member 1/1
Joel Leonoff Member 3/3
Brian McArthur-Muscroft5 Member —
Stephen Shaper Member 3/3
John Bateson2,3 Chairman 1/2
Keith Butcher4 Member 2/3
Jonathan Comerford2 Member 2/2
1 Brahm Gelfand became a member of the Committee upon his appointment as a Director of the Company on 13 March 2014.
2 John Bateson and Jonathan Comerford stepped down as members of the Committee and Andrew Dark, Ian Jenks and Dennis Jones were appointed as members in their stead on 30 July 2014. 3 John Bateson was Chairman of the Committee until he stood down on 30 July 2014. Thereafter, Andrew Dark assumed the Chair.
4 Keith Butcher was a member of the Committee throughout 2014 and until he stood down as a Director on 1 January 2015. 5 Brian McArthur-Muscroft became a member of the Committee upon his appointment as a Director of the Company on 1 January 2015.
In accordance with its Terms of Reference, all members of the Board are automatically co-opted onto the Committee with effect from the date of their appointment to the Board.
The quorum for meetings is two Directors, one of whom must be an independent Non-Executive Director. The Chairman of the Committee must be a Non-Executive Director.
The Company Secretary is Secretary to the Committee and attends its meetings. Terms of reference
A copy of the Board approved Terms of Reference of the Committee can be obtained upon request from the Company Secretary and is also available on the Company’s corporate website.
In accordance with its remit, and acting as a sub-committee of the Board, the Committee is responsible for exercising the full powers and authority of the Board in regularly reviewing the structure, size and composition (including the skills, knowledge and experience) required of the Board compared to its current position along with succession planning for directors and other senior executives, taking into account the challenges and opportunities facing the Company, and what skills and expertise are therefore needed on the Board in the future.
Meetings
The Committee shall meet at least twice a year and at such other times as the Chairman of the Committee or the Board shall require. During 2014, the Committee met formerly on three occasions.
Appointment of new Non-Executive Directors
Four new Non-Executive Directors were appointed during 2014.
A sub-committee of the Board comprising of John Bateson, Ian Francis, Joel Leonoff and Stephen Shaper was formed to review and meet with
prospective candidates before making recommendations to the Board. Prospective candidates were recommended by existing Board members and both the Company’s US counsel and the Company’s Nomad were also involved in the process.
After an extensive consultation and review of candidates, Brahm Gelfand was appointed as a non-Executive Director on 13 March 2014. Dennis Jones was appointed as Non-Executive Chairman and Andrew Dark and Ian Jenks were appointed as Non-Executive Directors, all with effect from 30 July 2014.