Nominations and Governance Committee

1.1  The Board Nomination and Governance Committee is a sub-committee of the Board of Hinckley & Rugby Building Society, from which it derives its authority. Its role is to assist the Board in fulfilling its responsibilities in relation to governance, including the composition, succession and appointment processes for the Board.
1.2  A summary of each meeting will be made available at the next Board meeting following the Nomination and Governance Compliance meeting.
1.3 The Terms of Reference of the Committee shall be reviewed at least annually.

2.1 Three nominated non-executive directors are members of the Committee.
2.2 The quorum necessary for the transaction of business shall be two members.
2.3 Any other non‐member non‐executive Directors may attend the Committee.
2.4 The Committee is chaired by one of the Board’s independent non-executive directors, except in the event of discussion of their own succession.
2.5 If the Chair is not present within fifteen minutes after the time appointed for the meeting, the Members present at that meeting shall elect one of their number to be the Chair, for the purposes of that meeting.
2.6 The Chief Executive will attend meetings of the Committee except when matters relating to the Chief Executive succession planning is being discussed.
2.7 Other members of the Executive team may also attend meetings, at the request of the Committee. Any other employee of the Society may be asked to attend, as required.
2.8 The Company Secretary & Governance Manager, or their nominee, shall act as Secretary of the Committee.
2.9 Minutes of each meeting will be taken and circulated to each member prior to the next meeting.
2.10 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.

3.1 The Committee will meet at least twice a year and otherwise as required, but the Chair of the Committee may convene meetings of the Committee at any time to consider any matters falling within these terms of reference.
3.2 Unless otherwise agreed, notice of each meeting confirming the venue, time and date together with an agenda of items to be discussed and supporting papers, shall be forwarded to each member of the Committee and any other person required to attend, not less than five working days before the date of the meeting.

The duties of the Committee shall be:

Appointments

4.1 To lead the process for Board appointments and make recommendations to the Board.
4.2 To identify and recommend for approval by the Board, candidates to fill Board vacancies, having evaluated the balance of knowledge, skills, geographical location, diversity, and experience of the Board.
4.3 Consider the appropriateness of any targets for the representation of the under-represented characteristics of age, disability, ethnicity, education and social background in the Board and workforce and, if appropriate, approve a policy on how to increase the number of the under-represented characteristics in the Board and workforce in order to meet those targets;
4.4 In performing its duties, and to the extent possible, on an ongoing basis, take account of the need to ensure that the Board’s decision making is not dominated by any one individual or small group of individuals in a manner that is detrimental to the interest of the Society as a whole.
4.5 To approve a job and person specification for each vacant Directorship and for the Chair of the Board, having regard to the skills mix of the Board, location, and professional sector requirements.
4.6 In identifying suitable candidates: –

a) Use open advertising or the services of external advisers to facilitate the search.

b) Consider candidates by reference to any ‘fit and proper’ test.

c) To interview shortlisted candidates and to make recommendations for appointments to the Board.

4.7 Ensure that prior to any appointment, the proposed appointee should be required to disclose any other business interests that may result in a conflict of interest and disclose any commitments with an indication of the time involved.
4.8 Ensure that on appointment to the Board, Independent 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.
4.9 Ensure that the terms and conditions of appointment of an Independent Director should be made available for inspection.
4.10 Ensure, together with the Company Secretary, that a full, formal, and tailored induction training programme is in place for a new Independent Director.
4.11 Ensure that the process by which the Committee has determined to make the appointment is recorded.

The Committee should determine and lead the process for Board and Senior Management Succession, considering the challenges and opportunities facing the Society and what skills and expertise are therefore needed on the Board and Senior Management (the Executive Committee/layer of management below Board level including the Secretary), in the future.

5.1 To monitor the Succession Plan on an ongoing basis and review it at least annually.
5.2 To recommend changes to the Succession Plan, where appropriate.
5.3 To keep under review the leadership needs of the Society, both for the Board and Senior Management, with a view to ensuring the continued ability of the Society to compete effectively in the marketplace and to promote its long-term sustainable success.

6.1 To periodically, and at least annually, assess the structure, size, composition, and performance of the Board and make recommendations to the Board with regard to any changes.
6.2 To periodically, and at least annually, assess the Board Skills Matrix, to include the knowledge, skills, and experience of individual members of the Board and of the Board collectively, ensuring the knowledge and skills identified meet the needs of current and future business strategy.
6.3 To ensure there is a formal and rigorous annual performance of the performance of the Board, its committees, the Chair, and individual directors.
6.4 To review annually the time required from an Independent Director. Performance evaluation should be used to assess whether the Independent Director is spending enough time to fulfil their duties. Any new external appointments by an existing Board member shall first be approved by the Committee in order to consider and determine any issue of conflict. If falling between the cycle of Committee meetings, this could be determined without a formal meeting, in a format, as agreed by the Chair of the Committee.
6.5 To consider and recommend to the Board the membership of each Board Committee based on operational requirements of the business.
6.6 To consider the Society’s approach to Diversity and Inclusion.
6.7 To review the Board Governance Manual.
6.8 To ensure that minutes are kept of meetings to indicate attendance and in the case of any new appointment, the method of attainment of candidates and number interviewed and records of interviews. The Chair of the Committee shall provide a report to the Board following any Committee meeting.
6.9 Monitor developments in relation to the Senior Managers Regime and Conduct Rules where appropriate, review the potential impact on the Society and make recommendations to the Board on any changes to be implemented.
6.10 Make available its terms of reference, clearly explaining its role and the authority delegated to it by the Board.
6.11 To consider the frequency of the carrying out of an externally facilitated Board evaluation, review the findings of any such evaluation and to report and make recommendations to the Board.
6.12 To give due consideration to relevant laws and regulations.

7.1 To ensure that all directors are subject to annual re-election. Recommend to the Board as to whether or not Directors should be nominated and supported for re-election each year, 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 and the need for progressive refreshing of the Board.
7.2 To ensure that where relevant, a clear explanation is provided in the Annual Report as to why any Non-Executive Director has served for longer than nine years (Independent Directors may serve longer than nine years subject to annual re-election) and the Committee must state its reasons for determining that the Director remains independent).
7.3 To ensure that the process by which the Committee has determined to make an appointment is provided in the Annual Report & Accounts setting out whether it has been made through an external research consultancy or has been openly advertised.
7.4 Report in the Annual Report, how the Committee has discharged its responsibilities.
7.5 The Committee Chairman will attend the Annual General Meeting to answer questions on the Committee activities.

8.1 To Identify any changes in the population of Certification staff (to whom the Principles of the Remuneration Code will apply) and Material Risk Takers (the group of employees to whom the Principles of the Remuneration Part of the PRA Rulebook will apply) including all employees whose professional activities have a material impact on the Society’s risk.

The following documents will be reviewed and approved at least annually and will be recommended to the Board for ratification, where appropriate.

• Governance Manual
• Diversity and Inclusion Strategy

The Committee shall, at least annually, carry out a review of its own effectiveness and make recommendations to the Board of any necessary changes.

Last reviewed: June 2022