SEPARATE BOARD COMMITTEES

Evaluate the use of separate board committees for areas such as audit, nomination, remuneration and ethics, rather than simply dealing with everything at the main board meeting of a company.

Evaluation of Separate Board Committees

1. Having separate committees for these areas ensures that sufficient time is devoted to discussing them. Given the importance of all four areas, this is a valuable benefit. However, there is a risk that main board meetings fail to dedicate enough time to these important matters because they over-rely on the committees to cover them.

2. With areas such as the audit committee, it is important that certain people are NOT involved in the discussion, such as the finance director. Having separate committees ensures a more independent discussion can take place.

3. Not all board members are experts in every area. Having separate committees allows the Board to benefit from those with the relevant skills and experience.

4. It is likely to be a more efficient use of time. For example, if each committee has a totally different membership, the four committees could all meet at the same time, then all report back to the Main Board.

5. The existence of such committees signals the importance of these areas to the Board, which helps to get this message to shareholders and other stakeholders.

6. Having separate committees helps to reduce main board meetings to a more sensible length.