Nomination Committee
Members
Sir Ronald Garrick (Chairman)
Coline McConville
Andy Hornby
Dennis Stevenson
Karen Jones
Richard Cousins
Terms of reference
The following are the terms of reference of the Nomination Committee ('the Nomination Committee') of HBOS and the HBOS Group.
1. Membership
1.1 Membership of the Nomination Committee will in7clude the Chairman, the Chief Executive, the Deputy Chairman, the Senior Independent Director, together with at least two further Non-Executive Directors. The membership will at all times consist of a majority of independent Non-Executive Directors.
1.2 The Chairman of the Nomination Committee will be the Chairman or an independent Non-Executive Director.
1.3 The Secretary of the Nomination Committee is appointed by the Chairman of the Committee.
A quorum of the Nomination Committee will comprise at least two members, one of whom shall be the Chairman of the Committee or the Chairman (if different) or one further independent Non-Executive Director (if the same).
2. Attendance
The Nomination Committee may invite other persons to attend meetings where appropriate to assist in the effective discharge of the Nomination Committee's duties.
3. Frequency of Meetings
The Nomination Committee will meet as required but at least twice in each year. Any Nomination Committee member or the Secretary may call for meetings as necessary.
4. Authority
4.1 The Nomination Committee is authorised by the HBOS Board to undertake any activity within its terms of reference.
4.2 The Nomination Committee is authorised by the HBOS Board to seek appropriate professional advice inside and outside of the Group as and when it considers this necessary.
4.3 Although normally decisions are reached on a consensus, in the event of a disagreement, decisions on any matter are made by the majority, with the Chairman of the meeting having a second, casting vote in the event of a tie. A Nomination Committee member who remains opposed to a proposal after a vote can ask for his or her dissent to be noted in the minutes.
5. Principal Duties
The Nomination Committee is authorised by the Board to:
5.1 ensure that there is a formal, rigorous and transparent procedure for the appointments of new Directors to the Board;
5.2 review the composition of the HBOS Board and consider and advise the HBOS Board as to any changes, which may be required to achieve a balanced and appropriately experienced and qualified Board;
5.3 as necessary to make recommendations to the Board on the independence of any existing or proposed Non-Executive Director in line with the criteria set out in the Board Control Manual under the section Independent Non-Executive Directors;
5.4 satisfy itself that plans are in place for orderly succession for appointments to the Board and other senior management (levels 7 and 8) positions, and will search for, consider and make recommendations to the HBOS Board in relation to the appointment of Directors of HBOS, including the position of Chairman;
5.5 ascertain, when required, the time commitments required of Non-Executive Directors, individually and collectively to fulfil the duties required;
5.6 make recommendations to the Chairman of HBOS as required in respect of the membership of the Board Committees of the HBOS Board, and the Chairmanships thereof;
5.7 make publicly available its terms of reference, explaining its role and the authority delegated to it by the Board;
5.8 be available in the person of the Chairman of the Nomination Committee to answer Shareholders’ questions about the activities of the Nomination Committee at the Annual General Meeting.
5.9 make a statement in the Company's Annual Report and Accounts detailing its activities and the process it has used to make any recommendations in respect of appointments to the Board;
5.10 for the appointment of a Chairman of the Board, the Nomination Committee should prepare a job description, including an assessment of the time commitment expected, recognising the need for availability in the event of crises. A Chairman's other significant commitments should be disclosed to the Board before appointment and included in the Annual Report. Changes to such commitments should be disclosed to the Board as they arise and included in the next Annual Report;
5.11 ensure that on appointment to the Board, Non-Executive Directors receive a formal Letter of Appointment setting out a job description and clearly what is expected of them in terms of time commitment, committee service and involvement outside Board meetings.
5.12 Appointment (and removal) of Director Trustees and (subject to the requirements of the Pensions Act 1995) other Trustees of the Group's Pension Schemes in place from time to time in particular, where necessary, in accordance with the Definition of Independence of Director Trustees set out in the Terms of Reference of the Nomination Committee.
6. Minutes
6.1 The minutes of meetings of the Nomination Committee are circulated to all members of the Nomination Committee and to nominated recipients as soon as practicable after the meeting.
Definition of Independence for Director Trustees
The independence criteria for Directors Trustees will apply throughout the term of the Trustees appointment, and the Company will endeavour to monitor this on an ongoing basis. The term of office will normally be for a period of 3 years but Trustees may be re-appointed for further terms.
1. A Candidate:
1.1 may not be a current employee or director of a company in the HBOS Group;
1.2 have or have had, within the last three years, a material business relationship with any company in the HBOS Group either directly, or as a partner, shareholder, director or senior employee of a body that has such a relationship with a Group Company;
1.3 may not receive any remuneration from the HBOS Group;
1.4 may not have a material financial interest in shares or share options in a way that materially affects his independence, or there is any other financial interest affecting independence;
1.5 may not be granted share options or shares of the HBOS Group whilst acting as an independent Trustee (if the exercise of such option is subject to a discretion on the part of HBOS); and/or
1.6 may not have a spouse, partner, civil partner or live with a family member who would be excluded from being an Independent Trustee under paragraphs 1.1 to 1.5 above.
2. The Nominations Committee must also take into account whether:
2.1 the candidate or that candidate's spouse, civil partner or minor child has a beneficial interest in shares or options of the HBOS Group (ie under a trust);
2.2 the candidate has close family ties with any of the directors or senior employees of an HBOS Group Company;
2.3 whether the candidate holds cross-directorships or has significant links with HBOS Group Company directors through involvement in other companies or bodies; and/or
2.4 the candidate represents a significant shareholder in the HBOS Group (holding 1% or more of the issued share capital of HBOS plc).
3. The Nominations Committee may however disregard the following:
3.1 the candidate was a former employee or director of an HBOS Group company (and has received remuneration from an HBOS group company as a result);
3.2 the candidate is a director of a pension trustee company;
3.3 any fees received for acting as a trustee of the Scheme (or as a director of a pension trustee company in relation to it); and/or
3.4 any pension received from a pension scheme registered under the Finance Act 2004.
