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Principle 4 The Company Shall have Rigorous Procedures for Appointment, Training, and Evaluation of the Board

4.1 Nominating Committee. The board shall establish a Nominating Committee of at least three members which shall:

•   identify persons qualified to become members of the board of directors or Chief Executive Officer, Chief Financial Officer, Corporate Secretary and any other officers of the company considered appropriate by the Board, with the exception of the appointment of the internal auditor which shall be the responsibility of the Audit Committee in accordance with Principle 3.1 above ,
•   make recommendations to the whole board of directors including recommendations of candidates for board membership to be included by the board of directors on the agenda for the next annual shareholder meeting.

The committee should include only independent directors or, alternatively, only non-executive directors of whom a majority is independent directors and the chairman is an independent director. This is consistent with international best practice and it recognizes that the Nominating Committee must exercise judgment free from personal career conflicts of interest.

4.2 Nominating Committee Charter. The Nominating Committee shall adopt a formal written charter which shall, at a minimum, state the above purposes and the other matters in Appendix C.

4.3 Board Nominations to Shareholders. Each proposal by the board to the shareholders for election or reelection of a director shall be accompanied by a recommendation from the board, a summary of the advice of the Nominating Committee, and the following specific information:

•   the term to be served, which may not exceed three years (but there need not be a limit on reelection for further terms),
•   biographical details and professional qualifications,
•   In the case of an independent director, a statement that the board has determined that the criteria in Appendix A have been met,
•   any other directorships held,
•   particulars of other positions which involve significant time commitments, and
•   details of relationships between:
•   the candidate and the company, and
•   the candidate and other directors of the company.
Recommendation: The chairman of the board should confirm to shareholders when proposing re-election of a director that, following a formal performance evaluation, the person's performance continues to be effective and continues to demonstrate commitment to the role. Any term beyond six years (e.g. two three-year terms) for a director should be subject to particularly rigorous review, and should take into account the need for progressive refreshing of the board. Serving more than six years is relevant to the determination of a non-executive director's independence, as stated in Appendix A.

4.5 Induction and Training of Directors. The chairman of the board shall ensure that each new director receives a formal and tailored induction to ensure his contribution to the board from the beginning of his term. The induction should include meetings with senior management, visits to company facilities, presentations regarding strategic plans, significant financial, accounting and risk management issues, compliance programs, its internal and independent auditors and legal counsel. All continuing directors should be invited to attend orientation meetings and all directors shall continually educate themselves as to the company's business and corporate governance.

Recommendation: Management, in consultation with the chairman of the board, should hold programs and presentations to directors respecting the company's business and industry, which may include periodic attendance at conferences and management meetings. The Nominating Committee shall oversee directors' corporate governance educational activities.
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