Nomination Committee

Roles and responsibilities

The Nomination Committee (the “Committee”) has overall responsibility for making recommendations to the Board on all new appointments and for ensuring that the Board and its Committees have the appropriate balance of skills, experience, independence, diversity and knowledge to enable them to discharge their respective duties and responsibilities effectively.

The Committee discharges its responsibilities through:

• regularly reviewing the size, structure and composition of the Board, including by means of overseeing the annual evaluation processes of the Board and its Committees, and providing recommendations to the Board of any adjustments that may be necessary from time to time;
• giving full consideration to succession planning in order to ensure an optimum balance of executive and Non-executive Directors in terms of skills, experience and diversity, and in particular formulating plans for succession for the key roles of Chairman of the Board and Chief Executive; 
• reviewing the career planning and talent management programme related to senior executives of the Company to ensure that it meets the needs of the business; 
• managing the Board recruitment process and evaluating the skills, knowledge, diversity and experience of potential Board candidates in order to make appropriate nominations to the Board; 
• reviewing and approving the Board of Directors’ Diversity policy and the Melrose Diversity and Inclusion policy; and 
• keeping up to date and fully informed on strategic issues and commercial changes affecting the Company and the markets in which it operates.

The Committee’s terms of reference, which were last reviewed by the Committee in November 2021, are available to view through the link below and from the Company Secretary at the Company’s registered office.

 

Diversity and inclusion

Melrose is a meritocracy and individual performance is the key determinant in any appointment, irrespective of ethnicity, gender or other characteristic, trait or orientation. However, the Board and the Committee also recognise the importance of diversity, and the Committee keeps its approach to diversity under regular review, including ensuring the development of a diverse Board and reviewing diversity policies on an annual basis. As a central part of its sustainability strategy, Melrose encourages diversity in all its forms both internally at all levels of the Group, and externally. In particular, four of the last five Non-executive Director appointments have been women, including the most recent two made in 2021, and all departures from the Board have been men. Furthermore, two of the Committee Chair roles in 2022 will be held by women. Melrose also continued to meet the Parker Review target of having one Director from an ethnic minority background on the Board by the end of 2021.

The Committee currently takes into account a variety of factors before recommending any new appointments to the Board, including relevant skills to perform the role, experience and knowledge needed to ensure a rounded Board and the benefits each candidate can bring to the overall Board composition. The Committee also takes into account race, ethnicity, country of origin, nationality, cultural background and gender in the selection process to ensure a diverse Board and it also strongly encourages executives to adopt the same approach when making appointments to the Melrose Executive Committee and the wider senior management team. The most important priority of the Committee, however, has been, and will continue to be, to ensure that the best candidate is selected, and this approach will remain in place going forward.

As at 31 December 2021, Melrose had 42% female representation on its Board, which has increased to 45% following the retirement of Archie G. Kane on 31 December 2021, and therefore meets the expectations of the Hampton-Alexander Review of having 33% female representation on its Board.

Below Board level, Melrose established an Executive Committee at the beginning of 2020, in part, in order to better facilitate the way for a diverse pipeline for succession planning purposes and to recognise the diversity of thought at a senior level. This focus is represented through the fact that the Executive Committee and its direct reports consisted of 37% female representation (and 36% female representation specifically at an Executive Committee level) as at 31 December 2021, which is in line with the Hampton-Alexander Review target of diversity at this level.

As with succession planning, given Melrose’s decentralised operating structure, the Committee does not have direct responsibility for the actual diversity policies and initiatives within the businesses, although they are required to align to the Melrose Diversity and Inclusion policy as a minimum standard, and Melrose provides constant encouragement to the businesses to make continual improvement.

The Committee acknowledges that diversity and inclusion is a changing landscape. In 2021, the Committee determined to separate the existing Diversity policy into two distinct policies: a Melrose Board of Directors’ Diversity policy, and a Diversity and Inclusion policy for Melrose more generally, in order to add clarity to the different policies in this area. The Board of Directors’ Diversity policy sets out the Committee’s commitment to ensuring that Board membership and pipeline for succession remains diverse, and that it takes into account the recommendations of the HamptonAlexander Review and the Parker Review. The Melrose Diversity and Inclusion policy, which is applicable to all Melrose employees, sets out Melrose’s position on diversity and inclusion in its workforce. In particular, it highlights that Melrose aims to create a workforce that is diverse and inclusive, free from bullying, harassment, victimisation and unlawful discrimination. The principles of the policy apply throughout the Group, and our businesses are encouraged to promote diversity once they have entered the Group.

Further details of Melrose’s commitment to diversity and the various diversity initiatives undertaken within the Group can be found in the Sustainability report, and Melrose’s Diversity policies can be viewed on the Company’s website at www.melroseplc.net/sustainability/.

Nomination Committee terms of reference (PDF 0.25MB)