Board Committees Remuneration Committee, Shareholders’ Grievance Committee, Other committees19/10/2022 0 By indiafreenotes
The board can appoint committees based on its objectives for the year, and these committees can help review and advise on the achievement of those objectives. The committee structure should be reviewed regularly to make sure there are no overlapping responsibilities.
There can also be standing committees, which operate on a more permanent basis, and ad-hoc committees, which are in place for a particular time frame and can then be disbanded once an objective has been achieved. Ad-hoc committees could also be termed task forces. Committee chairs can provide leadership to the committee and help translate the board’s goals into an agenda for committee meetings.
The board can accomplish much of the work through committees, which is an effective way to delegate work. They can focus specifically on areas such as governance, internal affairs, or external affairs.
Committee size will depend on the board’s needs, and it is helpful to recognise that the more committees you set up, the more meetings will need to take place.
Committee members should be selected based on their experience and skills. Each board member should serve on at least one committee, but preferably no more than two.
Essentially, a committee provides expert advice and counselling to the board. However, the committee’s suggestions still need to be approved by the board, and they are not obligated to go with this advice.
The role of a Remuneration Committee is:
- To decide and approve the terms and conditions for appointment of executive directors and/ or whole time Directors and Remuneration payable to other Directors and matters related thereto.
- To recommend to the Board, the remuneration packages of the Company’s Managing/Joint Managing/ Deputy Managing/Whole time / Executive Directors, including all elements of remuneration package (i.e. salary, benefits, bonuses, perquisites, commission, incentives, stock options, pension, retirement benefits, details of fixed component and performance linked incentives along with the performance criteria, service contracts, notice period, severance fees etc.);
- To be authorized at its duly constituted meeting to determine on behalf of the Board of Directors and on behalf of the shareholders with agreed terms of reference, the Company’s policy on specific remuneration packages for Company’s Managing/Joint Managing/ Deputy Managing/ Whole-time/ Executive Directors, including pension rights and any compensation payment;
- To implement, supervise and administer any share or stock option scheme of the Company.
- to review the overall compensation policy, service agreements and other employment conditions to Executive Directors and senior executives just below the Board of Directors and make appropriate recommendations to the Board of Directors;
- to review the overall compensation policy for Non-Executive Directors and Independent Directors and make appropriate recommendations to the Board of Directors;
- to make recommendations to the Board of Directors on the increments in the remuneration of the Directors;
- to assist the Board in developing and evaluating potential candidates for senior executive positions and to oversee the development of executive succession plans;
- to review and approve on annual basis the corporate goals and objectives with respect to compensation for the senior executives and make appropriate recommendations to the Board of Directors;
- to review and make appropriate recommendations to the Board of Directors on an annual basis the evaluation process and compensation structure for our Company’s officers just below the level of the Board of Directors;
- to provide oversight of the management’s decisions concerning the performance and compensation of other officers of our Company;
Shareholders’ Grievance Committee
In terms of Clause 49-IV(G)(iii) of the Listing Agreement, a board committee under the chairmanship of a non-executive director shall be formed to specifically look into the redressal of shareholder and investors complaints like transfer of shares, non-receipt of balance sheet, non-receipt of declared dividends etc. This committee shall be designated as “Shareholders/ Investors Grievance Committee”.
- Efficient transfer of shares; including review of cases for refusal of transfer transmission of shares and debentures;
- Redressal of shareholder and investor complaints like transfer of shares, non-receipt of balance sheet, non-receipt of declared dividends etc;
- Issue of duplicate / split / consolidated share certificates;
- Allotment and listing of shares;
- Review of cases for refusal of transfer / transmission of shares and debentures;
- Reference to statutory and regulatory authorities regarding investor grievances; and to otherwise ensure proper and timely attendance and redressal of investor queries and grievances.”
The committee comprises a minimum of three independent non-executive directors, as well as the chief executive and financial director. The chair of the board may not serve as chair of this committee. Members of the committee are individuals with risk management skills and experience. The committee’s responsibilities include:
- Review and approve for recommendation to the board a risk management policy and plan developed by management. The risk policy and plan are reviewed annually.
- Monitor implementation of the risk policy and plan, ensuring an appropriate enterprise- wide risk management system is in place with adequate and effective processes that include strategy, ethics, operations, reporting, compliance, IT and sustainability.
- Make recommendations to the board on risk indicators, levels of risk tolerance and appetite.
- Monitor that risks are reviewed by management, and that management’s responses to identified risks are within board-approved levels of risk tolerance.
- Ensure risk management assessments are performed regularly by management.
- Issue a formal opinion to the board on the effectiveness of the system and process of risk management.
- Review reporting on risk management that is to be included in the integrated annual report.
- Review annually the charters of the group’s significant subsidiary companies’ risk committees, and their annual assessment of compliance with these charters to establish if the Naspers committee can rely on the work of these risk committees.
- Perform an annual self-assessment of the effectiveness of the committee, reporting these indings to the board.
The primary role of the Nomination Committee of the board is to assist the board by identifying prospective directors and make recommendations on appointments to the board and the senior most level of executive management below the board. The committee also clears succession plans for these levels. The Nomination Committee is responsible for making recommendations on board appointments and on maintaining a balance of skills and experience on the board and its committees.
Succession planning for the board is a matter which is devolved primarily to the Nomination Committee, although the committee’s deliberations are reported to and debated by the full board. The board itself also regularly reviews more general succession planning for the senior management of the group.
Corporate Governance Committee
Together with the audit and compensation committees, the nominating/corporate governance committee rounds out the three standing committees of a public company’s board of directors. It plays a critical role in overseeing matters of corporate governance for the board, including formulating and recommending governance principles and policies. As its name implies, this committee is charged with enhancing the quality of nominees to the board and ensuring the integrity of the nominating process. Given the recent focus on board composition and diversity, director elections, and proxy access, the role of nominating/corporate governance committee is in the spotlight.
Corporate Compliance Committee
The primary Objective of the Compliance Committee is to review, oversee and monitor:
- The company’s compliance with applicable legal and regulatory requirements.
- The company’s policies, programs, and procedures to ensure compliance with relevant laws, the company’s code of conduct, and other relevant standards
- The company’s efforts to implement legal obligations arising from settlement agreements and other similar documents
- Perform any other duties as are directed by the board of directors of the company.