Annual Report & Accounts 2015

Nominations Committee Report

Matters considered by the Committee during the year

At its meeting on 18 June 2015, the Сommittee considered the following issues:

  •  A review of the appointment of Deborah Gudgeon as an independent non-executive director. After much consideration and research during 2014 and early 2015, Deborah Gudgeon was identified as a strong candidate to succeed Terry Robinson as an independent non-executive director and as a member of the Audit Committee. External agents were not used during the search to identify a replacement for Mr Robinson and an advertisement was not placed because a number of possible candidates had previously been identified by board members. Members of the Committee, excluding Mr Robinson, who had previously worked with her, had interviewed Miss Gudgeon. The fact that Miss Gudgeon is a chartered accountant, with extensive corporate and international experience, including some experience of mining, was noted. Following a decision by the Committee that Miss Gudgeon’s appointment as an independent non-executive director should be discussed by the board, a formal recommendation by the Committee to appoint Miss Gudgeon was put to the board on 31 March 2015. This was approved by the board and Miss Gudgeon was appointed, with effect from 1 May 2015, as an independent non-executive director.
  •  A detailed assessment of the results of the externally facilitated Nominations Committee review as undertaken by Lintstock in 2014. This was the first time that the Board and Committees had undertaken an externally facilitated review and both the Committee and the Board as a whole concluded that it had been a helpful and encouraging exercise, with the results confirming that the Committee was working well, but also including some helpful suggestions for improvement.
  •  The composition of the Board Committees. It was noted that the UK Corporate Governance Code includes an assumption that a non-executive director is no longer considered independent once he or she has served as a director for nine years. In view of this, Terry Robinson had previously indicated that he would not seek re-election as a director of the Group at the 2015 annual general meeting, which was scheduled to take place later that day. As a result, Mr Robinson stepped down from the Committee at this meeting. Mr Robinson’s contribution to the Group has been considerable and he is a great loss to the Committee and to the board. As a result of this, the Nominations Committee made recommendations to the board: to appoint Deborah Gudgeon as chairman of the Audit Committee; for Sir Michael Peat to step down from the Audit Committee; to appoint Karl Gruber as a member of the Nominations Committee; and to appoint Alexander Izosimov as a member of the Audit Committee. These recommendations were put to and approved by the board later that day and became effective from 19 June 2015.
  •  Performance of the senior management team, succession planning and organisational structure. Senior management succession planning was discussed, as is the case at most of the Committee’s meetings.

At its meetings on 17 November 2015 and 15 December 2015, the Committee considered the following issues:

  •  The composition of the board and the age, diversity and length of time in office of its members. The Committee agreed that the board represented a good mix of skills and experience, and that the Group had benefited from having a stable board and a group of people who interact well.
  •  Independence of non-executive directors. The Committee undertook a review of the independent status of the non-executive directors based on the provisions in the UK Corporate Governance Code and confirmed the appropriateness of the independent status of each of the independent non-executive directors.
  •  Organisational structure within the Group. The Committee discussed the reorganisation of the business divisions on a regional basis and the various candidates that had been identified to lead the newly created divisions.
  •  Best practices for Nominations Committee. The Committee undertook a detailed review of the ‘Women on Boards Davies Review: Five Year Summary’ and also considered the FRC discussion paper ‘UK Board Succession Planning’.
  •  Board effectiveness review. The Committee also considered the progress and results of the board and ‘Board Committees Effectiveness’ review questionnaires. These were detailed questionnaires, replies to which were submitted by all Board and Board Committee members, without attribution, directly to the company secretary. The evaluation considered, inter alia, the balance of skills and experience on the board, independence, knowledge of the Group, the content and effectiveness of meetings and diversity (including gender).

Performance of the chairman and individual directors

2016 priorities

The Committee will continue to fulfil its general responsibilities, with particular emphasis on compliance with the UK Corporate Governance Code, development and succession planning for senior management, providing and encouraging training for directors and implementing the recommendations from the external review of the board’s performance.

The senior independent non-executive director sought views from all directors about the performance and contribution of the chairman. The conclusions of this review were considered by the independent non-executive directors at a meeting on 15 December 2015. It was concluded, as previously, that the chairman continues to make an important contribution to the Group, including his knowledge and experience of, and contacts in, the industry. Prior to the Nominations Committee meeting on 15 December 2015, the chairman of the Group and the chairman of the Nominations Committee discussed the performance of the individual directors, including time available to devote to the Group’s business.

Diversity policy

The board’s diversity policy is to have board membership that reflects the international nature of the Group’s operations and at least two women (20%) as board members. The objective has been achieved. The board notes the publication of the ‘Women on Boards Davies Review: Five Year Summary’, and as a result will be updating its diversity policy with a view to achieving 33% representation of women on the Group’s board by 2020.

Committee members and attendance

The members of the Nominations Committee at 31 December 2015 were Sir Michael Peat (Chairman), Alexander Izosimov, Karl Gruber, Alexander Abramov, and Eugene Shvidler. Terry Robinson was a member of the Nominations Committee until 18 June 2015, while Karl Gruber also joined the Nominations Committee on the same date. Sir Michael Peat served as the chairman of the Nominations Committee throughout the year.

Three of the five members of the Committee were independent non-executives.

The Committee met on three occasions during 2015, on 18 June, 17 November and 15 December.

The CEO was in attendance at all meetings and the company secretary acted as the Committee’s secretary.