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.
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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