Annual Report 2016 - Page 48

Annual Report 2016 CORPORATE GOVERNANCE performance of the Group and its individual businesses. Senior management is responsible, along with the Board, for monitoring policies and procedures and other matters that are not reserved for the Board. There are written procedures containing a regime of authorisation levels for key decision-making. The Board carries out an informal evaluation of its own performance, the performance of the individual Directors and various Committees. All Directors are aware of the procedure for those wishing to seek independent legal and other professional advice. The Board also has access to the advice and services of the Company Secretary. Matters reserved for the Board A schedule of matters specifically reserved for the Board’s decision has been adopted based on Institute of Chartered Secretaries and Administrators (ICSA) best practice. The matters include, but are not limited to: • Reviewing and approving the Group’s strategy • Approval of capital and operating budgets • Reviewing and approving any material changes to the Group’s capital structure • Review and approval of financial reports • Review and approval of major contracts • Powers to delegate authority Whilst South Staffordshire Water PLC acts, where applicable, as though it were a separate public listed company, a limited number of matters in respect of this subsidiary company also need the approval of the Board of South Staffordshire Plc. 46 These include: • Material submissions to Ofwat, particularly in respect of Price Reviews and major structural reform • Contracts that are material either strategically or by reason of size, according to specified limits • Appointment and removal of any Director, in its role as shareholder • Prosecution, defence or settlement of litigation above £1 million or being otherwise material • Material changes to pension arrangements where operated on a Group basis Remuneration Remuneration packages are designed to attract, retain and motivate high-calibre senior executives. The Remuneration Committee has overall responsibility for determining the Executive Director’s remuneration package and those of the executive team and other senior management. NonExecutive Directors do not receive any remuneration or fee from the Company. The total remuneration package of the Executive Director, executive team and other senior management includes basic salary, benefits and an annual bonus that is linked to individual business and Group targets and personal performance related objectives. Performance related objectives are designed to encourage and reward continuing improvement in the Group’s performance and value. Board Committees Remuneration Committee The Remuneration Committee is responsible for the Group’s remuneration policy and the setting of the remuneration packages of the Board, executive team and other senior management. No Director is involved in determining his or her own remuneration. During the year the Remuneration Committee comprised of Jesús Olmos, Ram Kumar and Adrian Page. The key terms of reference for the Committee are to: • Agree remuneration that will ensure that the Executive Director, the executive team and other senior management are provided with appropriate incentives to achieve high standards of performance and reward them for their individual contributions to the success of the Group • Determine such packages and arrangements with regard to any relevant legal requirements and associated guidance and to obtain reliable, up-to-date information about remuneration in other companies • Approve the design of, and determine targets for, any performance related remuneration packages operated within the Group • Ensure that contractual terms on termination are fair and that failure is not rewarded • Oversee any material changes in employee benefits structures throughout the Group