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In fulfilling their responsibilities, apart from complying with the general law, Directors of GKN plc are required to comply with the duties set out in the Companies Act 2006. These apply both to decisions made by Directors themselves and to decisions made through the delegation of their authority to Board Committees and individuals.
The Board is collectively responsible for the success of the Company. Its role is to provide entrepreneurial leadership of the Company within a framework of prudent and effective controls which enables risk to be assessed and managed. The Board sets the Company’s strategic aims, ensures that the necessary financial and human resources are in place for the Company to meet its objectives, and reviews management performance. It also sets the Company’s values and standards and ensures that its obligations to its shareholders (including reporting to shareholders on the Board’s stewardship) and others are understood and met.
It currently comprises five executive and seven non-executive Directors. With the exception of the Chairman, who is presumed under the Combined Code on Corporate Governance not to be independent, all the non-executive Directors are regarded by the Board as independent.
The Board normally meets 11 times a year, including at least one meeting at a Group operating company. Comprehensive
briefing papers are prepared and circulated to all Directors one week prior to scheduled Board meetings.
Specific responsibilities reserved to the Board include:
- setting Group strategy and approving an annual budget and medium-term projections;
- reviewing operational and financial performance;
- approving major acquisitions, divestments and capital expenditure;
- reviewing the Group's systems of financial control and risk management;
- ensuring that appropriate management development and succession plans are in place;
- reviewing the activities of the three sub-committees of the Executive Committee;
- reviewing matters relating to corporate social responsibility, including the environmental, health and safety performance of the Group;
- approving appointments to the Board, to the Executive Committee and to the position of Company Secretary, and approving policies relating to Directors' remuneration and the severance of Directors' contracts; and
- ensuring that a satisfactory dialogue takes place with shareholders.
Further details on the role of the Board, together with a description of the corporate governance roles of the Chairman,
Chief Executive, Senior Independent Director and Company Secretary, are available via the Related Information links above. Biographical details
of all the Directors are available via the Related Information link to the GKN Directors page above.
Operational management functions are delegated by the Board to the Executive Committee and divisional management as
appropriate. Specific responsibilities have been delegated to the following Board Committees:
Comprises the executive Directors and the Group's senior executive team under the chairmanship of the Chief Executive,
Sir Kevin Smith CBE.
The members of the Committee are:
The Executive Committee is tasked with leading, overseeing and directing the activities of the Group. It is responsible for reviewing divisional and Group strategy plans, approving and leading the consistent implementation of business and operational processes, and identifying, evaluating and monitoring the risks facing the Group and deciding how they are to be managed. The Committee normally meets monthly.
The Executive Committee has three sub-committees consisting of members of senior management:
The Lean Enterprise Sub-Committee is responsible for driving operational best practice globally through the application of Lean business processes.
(Download Lean Enterprise Sub-Committee Terms of Reference PDF)
The Technology Sub-Committee is responsible for setting policy and providing guidance and direction in relation to technologies employed across all business areas, and provides input to the Executive Committee to contribute to the formulation of the Group's business strategy.
(Download Technology Sub-Committee Terms of Reference PDF)
The Governance and Risk Sub-Committee has responsibility for developing strategy for and providing oversight and direction on all matters relating to governance and compliance, risk management and corporate social responsibility.
(Download Governance and Risk Sub-Committee Terms of Reference PDF)
Comprises the non-executive Directors together with the Chief Executive under the chairmanship of the Chairman,
Roy Brown.
The members of the Committee are:
The Chairman's Committee is a forum for the Chairman and Chief Executive to brief and obtain the views of the non-executive Directors
on particular issues.
Comprises the independent non-executive Directors under the chairmanship of
John Sheldrick.
The members of the Committee are:
The primary role of the Audit Committee, which reports its findings to the Board, is to ensure the integrity of the financial reporting and audit processes and the maintenance of a sound internal control and risk management system. In pursuing these objectives, the Committee ensures that an appropriate relationship is maintained between GKN and the external auditors, considers the effectiveness of the external audit process and makes recommendations to the Board on the appointment of the external auditors. It reviews the effectiveness of the internal audit function and is responsible for approving the appointment of the head of that function. The Committee reviews the Group’s systems of internal control and the processes for monitoring and evaluating the risks facing the Group. Further details of the Audit Committee’s role and activities can be found on page 59 and 60 of the 2008 Annual Report.
Comprises the independent non-executive Directors under the chairmanship of Sir Peter Williams CBE.
The members of the Committee are:
The Remuneration Committee is responsible
for approving the terms of service and setting the remuneration of the
executive Directors and the Company Secretary in accordance with a
remuneration policy which is approved annually by the Board. It is also
responsible for determining the fees of the Chairman and the terms upon
which the service of executive Directors is terminated having regard to a
severance policy adopted by the Board, and for monitoring the remuneration
of senior managers just below Board level. It also prepares for approval by the
Board the annual report on Directors' remuneration (set out on pages 61 to 71 of the 2008 Annual Report).
Comprises the non-executive Directors and the Chief Executive under the chairmanship of the Chairman,
Roy Brown. The members of the Committee are:
The Nominations Committee leads the process for identifying, and makes recommendations
to the Board on, candidates for appointment as Directors of the Company and
as Company Secretary, giving full consideration to succession planning and
the leadership needs of the Group. It also makes recommendations to the
Board on the composition of the Chairman's and Nominations Committees
and the composition and chairmanship of the Audit and Remuneration
Committees. It keeps under review the structure, size and composition of the
Board, including the balance of skills, knowledge and experience and the
independence of the non-executive Directors, and makes recommendations
to the Board with regard to any changes.
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