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Howden Joinery Group Plc

Terms of Reference of the Nomination Committee

Last approved: 17 September 2019

1.

Membership

1.1Members of the Committee shall be appointed by the Board in consultation with the Chair of the Committee. The Committee shall be made up of least three members, the majority of whom should be independent non-executive directors. If the Board decides that a member of the Committee is no longer independent, and as a result a majority of the members of the Committee are not independent non-executive directors, that member will cease to be a member of the Committee.
1.2Only members of the Committee have the right to attend Committee meetings. However, other individuals such as the Chief Executive Officer, Group HR Director and external advisers may be invited to attend for all or part of any meeting, as and when appropriate.
1.3A director must have completed a full, formal and tailored induction programme prior to their appointment to the Committee. Successful completion of the induction programme will be determined by the Chair of the Board. Appointments to the Committee shall be for a period of up to three years, which may be extended by the Committee provided the director remains independent.
1.4The Board shall appoint the Committee Chair who must be either the Chair of the Board or an independent non-executive director. In the absence of the Committee Chair and/or an appointed deputy, the remaining members present shall elect one of their number to chair the meeting. The Chair of the Board shall not chair the Committee when it is dealing with the matter of Chair succession.

2.

Secretary

2.1The Company Secretary shall act as the Secretary of the Committee.

3.

Quorum

3.1The quorum necessary for the transaction of business shall be two, both of whom must be independent non-executive directors. A duly convened meeting of the Committee at which a quorum is present shall be competent to exercise all or any of the authorities, powers and discretions vested in or exercisable by the Committee.

4.

Meetings

4.1The Committee must meet as often as it deems necessary and at such other times as the Chair of the Committee shall require, but in any case at least twice a year.

5.

Notice of Meetings

5.1Meetings of the Committee shall be summoned by the Secretary of the Committee at the request of the Chair of the Committee.
5.2Unless otherwise agreed by all Committee members, notice of each meeting confirming the venue, time and date (and dial-in details if required), together with an agenda of items to be discussed, shall be forwarded to each member of the Committee, any other person required to attend and all other non-executive directors, no later than five working days before the date of the meeting. Supporting papers shall be sent to Committee members and to other attendees as appropriate, at the same time. Notices, agendas and supporting papers may be sent in electronic form where the recipient has agreed to receive documents in such a way.
5.3The Secretary must ensure that the Committee receives information and materials in a timely manner to enable full and proper consideration to be given to them.

6.

Minutes of Meetings

6.1The Secretary shall minute the proceedings and resolutions of all Committee meetings, including the names of those present and in attendance.
6.2Draft minutes of Committee meetings must be sent promptly to all members of the Committee. Once approved, minutes must be sent to all members of the Board, unless the Chair of the Committee thinks it is inappropriate to do so.

7.

Annual General Meeting

7.1The Chair of the Committee shall attend the Annual General Meeting prepared to respond to any shareholder questions on the Committee’s area of responsibility and activities and make a statement on the activities and achievements of the Committee over the year, as directed by the Chair of the Board.

8.

Duties

8.1The Committee shall:
 8.1.1monitor and regularly review the structure, size and composition (including the skills, knowledge, independence, experience, diversity of its members, and length of service of the Chair, individual directors and the Board as a whole) required of Board compared to its current position and make recommendations to the Board with regard to any changes;
 8.1.2monitor and regularly review the skills, experience and diversity of senior management;
 8.1.3ensure plans are in place for orderly succession to both the Board and senior management positions (including the Company Secretary) taking into account the Company’s purpose, values, strategy, culture, challenges and opportunities facing the Company. The Committee should therefore consider the skills and expertise required on the Board and in the senior management group in the future. The Committee should review how talent is managed throughout the organisation and how succession plans support the development of a diverse talent pipeline, in particular the gender balance of the senior management  and their direct reports;
 8.1.4develop and apply a formal, rigorous and transparent procedure for Board appointments, based on merit and objective criteria and promoting diversity;
 8.1.5keep up to date and fully informed about strategic issues and commercial changes affecting the Company and the market in which it operates;
 8.1.6be responsible for identifying and nominating for the approval of the Board, candidates to fill Board vacancies as and when they arise;
 8.1.7as part of the process for nominating candidates for appointment, obtain details of and review any interests the candidate may have which conflict or may conflict with the interests of the Company, including those resulting from significant shareholdings.  The Committee shall consider whether, despite any such conflict, there are nevertheless grounds for recommending the candidate for appointment and for the Board to authorise the relevant conflict.  The Committee shall as part of any proposal to the Board for appointment of the relevant candidate explain these grounds and make recommendation as to the terms and conditions on which any authorisation of the conflict should be given by the Board;
 8.1.8before appointment is made by the Board, evaluate the balance of skills, knowledge and experience on the Board and in light of this evaluation prepare a description of the role and capabilities required for a particular appointment. 
In identifying suitable candidates the Committee shall:
  8.1.8.1use open advertising or the services of external advisors to facilitate the search;
  8.1.8.2consider candidates from a wide range of backgrounds; and
  8.1.8.3consider candidates on merit and against objective criteria and with due regard for the benefits of diversity on the board, including gender social and ethnic background, taking care that appointees have enough time available to devote to the position.
 8.1.9keep under review the leadership needs of the organisation, both executive and non-executive, with a view to ensuring the continued ability of the organisation to compete effectively in the marketplace and successfully implement its strategy;
 8.1.10review annually the time required from non-executive directors.  Performance evaluation should be used to assess whether the non-executive directors are spending enough time to fulfil their duties;
 8.1.11ensure 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 time commitment, committee service and involvement outside Board meetings;
 8.1.12before an appointment is made by the Board, bring to the attention of the Board other demands on the proposed director’s time. Significant commitments should be disclosed with an indication of the time involved;
 8.1.13require directors to disclose all significant new commitments (with an indication of the time involved), to monitor and assess such disclosures regularly and make recommendations to the Board as appropriate in relation to the approval of such commitments, and the disclosure of reasons for approval of any approved commitment;
 8.1.14for the appointment of a Chair of the Board, prepare a job specification, including the time commitment expected. A proposed Chair’s other significant commitments should be disclosed to the Board before appointment with an indication of the time involved, and the nature and extent of any potential or actual conflicts of their interests with the interests of the Company;
 8.1.15oversee and take an active role in the setting, meeting and monitoring the impact of diversity objectives and strategies for the Group as a whole;
 8.1.16work and liaise as necessary with all other Board committees;
 8.1.17oversee appropriate induction training for new directors and ongoing training as appropriate for the Board, its committees and individual directors;
 8.1.18oversee, with the Chair of the Board, a formal and rigorous annual evaluation of the performance of the Board, its committees and individual directors and, in particular, to determine with the Chair whether the Board evaluation should be externally facilitated and, if so, the nature and extent of an external evaluator’s contact with the Board, its Committees and individual directors;
 8.1.19review and assess the results of the evaluation process and make recommendations to the Board in relation to outcomes and further actions; and
 8.1.20seek effective engagement through the Committee chair with shareholders on significant matters related to the areas of the Committee’s responsibilities.
8.2The Committee shall also make recommendations to the Board concerning:
 8.2.1formulating plans for succession for executive, non-executive directors and senior management and in particular for the key roles of Chair of the Board and Chief Executive (but see 8.2.7 below);
 8.2.2suitable candidates for the role of senior independent director;
 8.2.3membership of the Audit and Remuneration Committees, and any other Board Committees as appropriate, including the skills and knowledge of its members, in consultation with the chairs of those Committees;
 8.2.4the re-appointment of any non-executive director at the conclusion of their specified term of office having given due regard to their performance and ability to continue to contribute to the Board in the light of the knowledge, skills and experience required;
 8.2.5the re-election by shareholders of any director under the annual re-election provisions of the Code or the ‘retirement by rotation’ provisions in the Company’s articles of association having due regard to their performance and ability to continue to contribute to the Board in the light of the knowledge, skills and experience required and the need for progressive refreshing of the Board;
 8.2.6any matters relating to the continuation in office of any director at any time including the suspension or termination of service of an executive director as an employee of the Company subject to the provisions of the law and their service contract; and
 8.2.7the appointment of any director to executive or other office other than to the positions of Chair of the Board and Chief Executive, the recommendation for which would be considered at a meeting of the full Board.

9.

Reporting Responsibilities

9.1The Committee Chair shall report formally to the Board on its proceedings after each meeting on all matters within its duties and responsibilities.
9.2The Committee shall make whatever recommendations to the Board it deems appropriate on any area within its remit where action or improvement is needed.
9.3The Committee shall produce a report to be included in the annual report about its activities, and shall describe or explain:
 
  • the process used to make any appointments, its approach to succession planning, and how both of these support developing a diverse talent pipeline;
  • if external advice or open advertising has not been used. Where an external search agency has been used, it shall be identified in the annual report and a statement made as to whether it has any connection with the Company.
  • how the Board evaluation has been conducted, the nature and extent of an external evaluator’s contact with the Board and individual directors, the outcomes and actions taken, and how it has or will influence Board composition;
  • the policy on diversity and inclusion, its objectives and linkage to company strategy, how it has been implemented and progress on achieving the objectives; and
  • the gender balance of those in senior management and their direct reports.

10.

Other Matters

 The Committee shall:
10.1at least once a year, review its own performance, 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;
10.2have access to sufficient resources in order to carry out its duties, including access to the company secretariat for assistance as required;
10.3be provided with appropriate and timely training, both in the form of an induction programme for new members and on an ongoing basis for all members;
10.4give due consideration to laws and regulations, the provisions of the Code and the requirements of the UK Listing Authority’s Listing, Prospectus and Disclosure and Transparency Rules and any other applicable rules, as appropriate; and
10.5oversee any investigations of activities which are within its terms of reference.

11.

Authority

11.1The Committee is authorised to undertake any activity within its terms of reference.
11.2The Committee is authorised to seek any information it requires from any employee of the Company in order to perform its duties.
11.3The Committee is authorised to obtain, at the Company’s expense, outside legal or other professional advice on any matters within its terms of reference.
11.4The Committee is authorised to sub-delegate any of its powers and authority as it thinks fit to the Company Secretary.

 

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