Nomination committee
Members
Charlotte Twyning (Chair)
Justin Dowley
David Lis
Gillian Elcock
Role and responsibilities
The Nomination Committee (the “Committee”) has overall responsibility for making recommendations to the Board on all new Board 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 Officer;
- 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, Equity 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 and updated by the Committee in November 2023, are available through the link below and from the Company Secretary at the Company’s registered office.
Diversity, equity 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 its diversity policies on an annual basis. Melrose encourages diversity at all levels of the Group. In particular, as at March 2024 the last five Non-executive Director appointments had been women. Furthermore, two of the committee Chair roles, including the important role of Audit Committee Chair, are held by women. Melrose also continued to meet the Financial Conduct Authority (“FCA”) Listing Rules and Parker Review target, and its own Board diversity target, of having one Director from an ethnic minority background on the Board.
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.
During the year, the Board continued to meet its target of maintaining at least 40% female representation on its Board. As at 31 December 2023, Melrose had 40% female representation on its Board, meaning that Melrose has met its target and the expectations of the FTSE Women Leaders Review and the FCA Listing Rules.
The FTSE Women Leaders Review and the FCA Listing Rules also set a target for at least one senior board position, being that of chairman of the board, senior independent director, chief executive or chief financial officer, to be held by a woman (the FTSE Women Leaders Review having set a target date of the end of 2025). The Committee recognises that Melrose does not currently meet this requirement and that it is under review and being factored into ongoing succession planning discussions.
During the year, the Board updated its senior management diversity target to align with the FTSE Women Leaders Review of having 40% female representation within its Executive Committee and direct reports by the end of 2025. As at 31 December 2023, the Executive Committee and its direct reports consisted of 41% female representation (and 37% female representation specifically at an Executive Committee level). Melrose therefore currently meets its diversity target and the expectation of the FTSE Women Leaders Review.
The Committee notes the recent recommendations of the Parker Review for FTSE 350 companies to set a percentage target for senior management positions that will be occupied by ethnic minorities by the end of 2027, with the target being set by 31 December 2023. Following engagement by the Company Secretariat with a member of the Parker Review Committee, and external advice to track the scope and timing of setting such targets among FTSE 100 peers, both the Committee and Board agreed that it was not feasible for Melrose to set a sufficiently informed ethnic diversity target for senior management by the end of 2023. In particular, Melrose has not traditionally collected sensitive data, such as ethnic diversity data, from its employees. However, the Group is proactively assessing the collection of such data across its operations noting that there are legal and regulatory barriers to overcome in certain jurisdictions. Furthermore, as Melrose’s change in business strategy has meant that there will be corresponding changes to the senior management population of the Group into the first half of 2024, it would be timely and appropriate to set a target in light of these changes having taken place. The Committee will seek to set a senior management ethnic diversity target during the course of 2024. With the assistance of external lawyers, Melrose has already reviewed its policies and procedures for the collection of ethnic diversity data, and has asked Melrose employees to complete a voluntary equality and diversity form. The Committee acknowledges that diversity, equity and inclusion is a changing landscape, and reviews its diversity policies on an annual basis, with any recommendations for amendments being approved by the Board. The policies include a Board of Directors’ Diversity policy and a Melrose Diversity, Equity and Inclusion policy. The Board of Directors’ Diversity policy sets out the Committee’s commitment to ensuring that Board membership and pipeline for succession remains diverse, which is equally applicable to each of the Board’s committees. It also sets out the Company’s diversity targets for the Board, the details of which are noted above. The Melrose Diversity, Equity and Inclusion policy, which is applicable to all Melrose employees, sets out Melrose’s position on diversity, equity and inclusion in its workforce. In particular, it highlights that Melrose aims to create a workforce that is diverse, equitable and inclusive. The principles of the policy apply throughout the Group, and our divisions are encouraged to promote diversity.
Further details of Melrose’s commitment to diversity and the various diversity initiatives undertaken within the Group can be found in the Sustainability review on pages 43 to 93 of the 2023 Annual Report and Melrose’s Diversity policies.