Corporate Governance Structures

Nomination Committee - Terms of Reference

There should be a nomination committee which should lead the process for the appointment of the posts of Chief Executive and Commission Members and make recommendations to the Commission as appropriate.

The Committee may also advise the Chief Executive on the appointment of other senior executives in the Commission and shall be notified by him of any short listed candidates for these posts.

It is chaired by the Chairman (Alan Whiting) of the Commission and its members are the Chief Executive (Marcus Killick) and two other members of the Commission (Nigel Feetham and Joseph E (Melo) Triay ). Another Commission member would replace the CEO when that appointment is being considered. The Committee has met once in the last year.

Duties

The committee should:

before making a recommendation have prepared a description of the role and capabilities required for a particular appointment;
be responsible for identifying and nominating to the Commission candidates to fill vacancies as and when they arise;
consider candidates from a wide range of backgrounds and look beyond the “usual suspects”;
give full consideration to succession planning in the course of its work, taking into account the challenges and opportunities facing the Commission and what skills and expertise are therefore needed in the future;
regularly review the structure, size and composition (including the skills, knowledge and experience) of the Commission and make recommendations to the Commission with regard to any changes;
keep under review the leadership needs of the Commission, both executive and non-executive, with a view to ensuring the continued efficiency of the Commission;
make a statement in the annual report about its activities; the process used for appointments and explain if external advice or open advertising has not been used; the membership of the committee, number of committee meetings and attendance over the course of the year;
make available its terms of references explaining clearly its role and the authority delegated to it by the Commission; and
ensure that on appointment the Chief Executive and Commission Members receive a formal letter of appointment setting out clearly what is expected of them in terms of time commitment, committee service and involvement outside meetings (a sample text of this letter is appended to this paper).

The committee should make recommendations to the Commission;

as regards plans for succession for the posts of Chief Executive or Commission Member;
as regards the re-appointment of any Commission Member at the conclusion of their specified term of office;
concerning any matters relating to the continuation in office of the Chief Executive or Commission Member at any time.

The committee should make recommendations to the Minister;

as regards plans for succession of Commission Members;
as regards the re-appointment of any Commission Member at the conclusion of their specified term of office;
concerning any matters relating to the continuation in office of the Chief Executive or Commission Member at any time.

Performance and Remuneration Committee - Terms of Reference

The Commission members shall appoint two from amongst them (excluding the Chief Executive) who, together with the Chairman, shall act as the Performance and Remuneration Committee. Its members are the Chairman of the Commission (Mr Alan Whiting), Mr John Tattersall and Mr Franco Cassar. It reports to the Commission as appropriate, normally once a year.

The Committee’s role shall be to review the performance of the most senior executives against the aims and objectives set for them and determine their remuneration (including any bonus structure) accordingly. The Committee will also, when necessary make changes to senior executive’s terms and conditions.

For this purpose senior executives shall comprise the Chief Executive Officer and the Deputy Chief Executive Officer.

The remit of the Committee shall be as follows:

To make and amend the terms and conditions of employment of senior executives and in doing so take into account:
In the case of any renewal to an exiting contract, the performance of the Senior Executive during the period of the existing contract;
The current financial position of the Commission;
The terms and conditions at present in place for the equivalent positions elsewhere
Any representations from the existing Senior Executive.

To consider the recommendations of the Chief Executive and Senior Independent Commission Member in respect of fees to be paid to Commission members l and advise the Commission accordingly

In fulfilling its remit the Committee may request the presence of a senior executive.

The Committee shall appoint the secretary before each meeting.

Audit Committee - Terms of Reference

An Audit Committee has been in place since 2004. The role of the Audit Committee amongst other matters is to monitor the integrity of the financial statements, review the Commission’s internal financial controls and to approve the terms of engagement of the external auditors. They report to the Commission, identifying matters in respect of which it considers that action or improvement is needed, and make recommendation on any steps to be taken. The Committee comprises Mr Joseph Caruana, as Chairman, Mr John Tattersall and Dr Jonathan Spencer During the year the Committee met twice.

To monitor the integrity of the financial statements of the company and any formal announcements relating to the company’s financial performance, reviewing significant financial reporting judgements contained in them;
To review the company’s internal financial controls and, unless expressly addressed by a separate board risk committee composed of independent directors, or by the board itself, to review the company’s internal control and risk management systems;
To monitor and review the effectiveness of the company’s internal audit function;
To make recommendations to the board, for it to put to the shareholders for their approval in general meeting, in relation to the appointment, re-appointment and removal of the external auditor and
To approve the remuneration and terms of engagement of the external auditor;
To review and monitor the external auditor’s independence and objectivity and the effectiveness of the audit process, taking into consideration relevant UK professional and regulatory requirements;
To develop and implement policy on the engagement of the external auditor to supply non-audit services, taking into account relevant ethical guidance regarding the provision of non-audit services by the external audit firm, and to report to the board, identifying any matters in respect of which it considers that action or improvement is needed and making recommendations as to the steps to be taken.

and to report to the Commission, identifying any matters in respect of which it considers that action or improvement is needed, and making recommendations as to the steps to be taken.

Budget Review Committee - Terms of Reference

There shall be a committee of the Commission whose role is to provide an independent challenge to the FSC budgetary process and to recommend the annual budget to the Commission.

Membership consists of Franco Cassar, Joseph Caruana, Alan Whiting and Joseph E (Melo) Triay. The Chief Executive Officer and the Deputy Chief Executive Officer also form part of the Committee.

The duties of this committee are;

To review the draft annual financial budget prepared by the FSC Executive
To challenge the underlying assumptions and forecasts with a view of determining the accuracy of the same
To direct the executive to reconsider any item of forecast income or expenditure
To recommend, or otherwise, the draft budget to the Commission.

The Committee shall meet at least annually and before the Commission is required to submit the FSC budget to Government.