Board Committee terms of reference

• Audit & Risk Committee
• Remuneration Committee
• Nomination Committee

1. Constitution
   
   The Board has resolved to establish a Committee of the Board to be known as the Audit & Risk Committee.
2. Membership
   1. The Committee shall comprise of at least three, and not more than four, independent non-Executive directors, appointed by the Board. A quorum shall be two members.
   2. The Chairman of the Committee shall be appointed by the Board.
3. Attendance at Meetings
   1. The Chairman, Chief Executive and Head of Risk shall normally attend meetings. The Compliance Officer and a representative of the internal and external auditors shall also attend meetings if required by either party. Any member of staff may be required by the Committee to attend meetings. However, at least once a year the Committee shall meet with the external auditors, internal auditors and Head of Risk without Executives, management or staff present.
   2. The Secretary shall be the Secretary of the Committee.
4. Frequency of Meetings
   
   Meetings shall be held when necessary, and not less than four times a year. The internal or external auditors may request a meeting if they consider that one is necessary.
5. Authority
   
   The Committee is authorised by the Board to investigate any activity within its terms of reference. It is authorised to seek any information it requires from any employee and all employees are directed to co-operate with any request made by the Committee. The Internal Auditor has the right to direct access to any member of the Audit Committee if for any reason he does not wish to consult the Chief Executive.
6. Duties
   
   The duties of the Committee shall be:
   
   Risk and internal controls
   1. to ensure that a satisfactory framework is in place for identifying and managing operational and compliance risk within the business. Strategic risk and financial risk are dealt with by the Board as a whole;
   2. to review the internal control and risk management systems, including internal financial controls, and ensure that these continue to be effective;
   3. to receive quarterly reports from the Head of Risk;
   4. to keep under regular review the steps taken by management to monitor, manage and mitigate risk via appropriate risk registers;
   5. to be aware of the current risk profile and ensure consistency with the Board's appetite for risk;
   
   Financial reporting
   6. to review the annual financial statements and annual regulatory return, and any formal announcements relating to the company's financial performance, before submission to the Board, focusing particularly on:
   1. any changes in accounting policies and practice
   2. major judgmental areas
   3. significant adjustments resulting from the audit
   4. the going concern assumption and compliance with accounting standards and legal requirements, including the regulations and guidance of the FSA
   5. where appropriate, allocations between the Society's funds;
   
   External audit
   7. to make recommendations to the Board, for it to put to the delegates 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 audit;
   8. to discuss with the external auditor before the audit commences the nature and scope of the audit;
   9. to discuss problems and reservations arising from the interim and final audits, and any matters the auditor may wish to discuss (in the absence of management where necessary);
   10. to review the external auditor's management letter and management's response;
   11. 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;
   12. 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;
   
   Internal audit
   13. to monitor and review the effectiveness of the internal audit function in the context of the overall risk management systems, including reviewing and approving the internal audit programme, ensuring co-ordination between the internal and external auditors, and ensuring that the internal audit function is adequately resourced and has appropriate standing within the Society;
   14. to consider the major findings of any internal investigations and management's response;
   
   Regulatory compliance
   15. to ensure that the Compliance function is adequately resourced and has appropriate standing in the organisation;
   16. to review the annual work programme of the Compliance function;
   17. to receive quarterly reports from the Compliance function in line with the standard format approved by the Audit & Risk Committee and to ensure that any matters raised are being appropriately addressed by management;
   
   Other
   18. to review arrangements by which staff may, in confidence, raise concerns about matters of financial reporting or other matters and to ensure that arrangements are in place for the proportionate and independent investigation of such matters; and
   19. to consider other topics, as defined by the Board.

1. Constitution
   
   The Board hereby resolves to establish a Committee of the Board to be known as the Remuneration Committee.
2. Membership
   1. The committee shall comprise of two (previously) three independent non Executive directors, appointed by the Board, and the Chairman of the Society. A quorum shall be two members.
   2. The Chairman of the Committee shall be appointed by the Board.
3. Attendance at Meetings
   1. The Chief Executive shall normally attend meetings. Any member of the Society staff may be required by the Committee to attend meetings.
   2. The Chief Executive shall be Secretary of the Committee.
4. Frequency of Meetings
   
   Meetings shall be held when necessary, and not less than once a year.
5. Authority
   
   The Committee is authorised by the Board to investigate any activity within its terms of reference. It is authorised to seek any information it requires from any employee and all employees are directed to co-operate with any request made by the Committee.
6. Duties
   
   The duties of the Committee shall be:
   1. to monitor and review the remuneration of Executive Directors and other members of the Executive of the Society and to recommend any changes to the Board, including policy in respect of pension rights and any compensation payments;
   2. to determine remuneration of the Non-Executive Directors;
   3. to seek external professional advice as appropriate in fulfilling its duties; and
   4. to consider other topics, as defined by the Board.
7. Reporting Procedures
   
   The Secretary shall circulate the agenda, the notice calling the meeting, and the minutes of each meeting of the Committee to all members of the Board.

1. Constitution
   
   The Board hereby resolves to establish a Committee of the Board to be known as the Nomination Committee.
2. Membership
   1. The Committee shall comprise of the Chairman of the Society and two independent non Executive directors, appointed by the Board, plus the Chief Executive.
   2. The Chairman of the Society shall be the Chairman of the Committee.
3. Attendance at Meetings
   1. The Chief Executive shall be Secretary of the Committee.
   2. Any member of the Society staff may be required by the Committee to attend meetings.
4. Frequency of Meetings
   
   Meetings shall be held when necessary, and not less than once a year.
5. Authority
   
   The Committee is authorised by the Board to investigate any activity within its terms of reference. It is authorised to seek any information it requires from any employee and all employees are directed to co-operate with any request made by the Committee.
6. Duties
   
   The duties of the Committee shall be:
   1. to lead the process for Board appointments and make recommendations to the Board, taking into consideration the time commitments required of Non-Executive Directors and their independence;
   2. to ensure that plans are in place for orderly succession for appointments to the Board and to the Executive, and make recommendations to the Board;
   3. to evaluate the balance of skills, knowledge and experience on the Board and, in the light of this evaluation, prepare a description of the role and capabilities required for any particular appointment;
   4. for the appointment of a Chairman, to prepare a job specification, including an assessment of the time commitment expected, recognising the need for availability in the event of crises;
   5. on an annual basis, to evaluate the performance of each director, in order to show that each continues to contribute effectively and demonstrate commitment, including time commitment, to the role. The evaluation of the Chairman should be led by the senior independent director, taking into account the views of the executive directors;
   6. to seek external professional advice as appropriate in fulfilling its duties; and
   7. to consider other topics, as defined by the Board.
7. Reporting Procedures
   
   The Secretary shall circulate the agenda, the notice calling the meeting, and the minutes of each meeting of the Committee to all members of the Board.