Remuneration Committee
1. Constitution
1.1 The Remuneration Committee is a committee of the Board of the Learning and Skills Network (“LSN”).
1.2 This document sets out the terms of reference under which the members of the Remuneration Committee will carry out their duties.
1.3 The Committee’s terms of reference may be amended at any time by the Board.
1.4 The Committee may from time to time investigate, discuss or review matters outside its terms of reference if required to do so by the Board.
2. Authority
2.1 The Committee is authorised by the Board to seek any information it requires from any employee of LSN in order to perform its duties.
2.2 In connection with its duties the Committee is authorised by the Board to obtain, at LSN’s expense, any appropriate external legal and other professional advice.
2.3 The Committee’s responsibilities extend to any wholly owned subsidiaries of the LSN.
2.4 The Committee has delegated authority from the Board to agree salaries and performance related pay in accordance with the policies set out in Paragraph 9.1 of these Terms of Reference .
3. Membership
3.1 The members of the Remuneration Committee shall be appointed by the Board.
3.2 The Committee shall be made up of 3 Board members, other than the Chairman of the Board.
3.3 Only members of the Committee have the right to attend Committee meetings. However, other individuals such as the chief executive, the head of human resources and external advisers may be invited to attend all or part of any meeting as and when appropriate in an advisory capacity.
3.4 Appointments to the committee shall be for a period of up to three years, which may be extended for two further three year periods, provided the director still meets the criteria for membership of the committee. The Board shall appoint the Committee Chairman who shall be a Board Member. In the absence of the Committee Chairman and/or an appointed deputy, the remaining members present shall elect one of themselves to chair the meeting.
4. Secretary
4.1 The Company Secretary or their nominee shall act as the Secretary of the Committee.
5. Quorum
5.1 The quorum necessary for the transaction of business shall be 2 members. A duly convened meeting of the Committee at which a quorum is present shall be competent to exercise all or any of the authorities, powers and discretions vested in or exercisable by the Committee.
6. Frequency of meetings
6.1 The committee shall meet not less than twice a year and at such other times as may be required. The main meeting will normally be held in February.
7. Notice of meetings
7.1 Meetings of the committee shall be called by the Secretary of the Committee and shall be called by the Secretary at the request of any of its members.
7.2 Unless otherwise agreed, notice of each meeting confirming the venue, time and date together with an agenda of items to be discussed, shall be forwarded to each member of the Committee, and any other person required to attend, no later than 5 working days before the date of the meeting. Supporting papers shall be sent to Committee Members and to other attendees as appropriate, at the same time.
7.3 Meetings of the Committee may be held by teleconference or videoconferencing, or any other means that enables all Committee Members to participate at the same time.
8. Minutes of meetings
8.1 The secretary shall minute the proceedings and resolutions of all meetings of the Committee, including recording the names of those present and in attendance.
8.2 The secretary shall ascertain, at the beginning of each meeting, the existence of any conflicts of interest and minute them accordingly.
8.3 Minutes of Committee meetings shall be circulated promptly to all members of the Committee and, once agreed, to all members of the Board, unless a conflict of interest exists.
9. Duties
The Committee shall:
9.1 determine and agree with the Board the framework or broad policy for the remuneration of the company’s Chief Executive, the Chairman of the Board andthe Company Secretary;
9.2 in determining such policy, take into account all factors which it deems necessary. The objective of such policy shall be to ensure that the company’s Chief Executive, the Chairman of the Board and the Company Secretary are provided with appropriate incentives to encourage enhanced performance and are, in a fair and responsible manner, rewarded for their individual contributions to the success of LSN;
9.3 review the ongoing appropriateness and relevance of the remuneration policy;
9.4 approve the design of, and determine targets for, any performance related pay schemes operated by LSN and approve the total annual payments made under such schemes;
9.5 determine the policy for, and scope of, pension arrangements for each executive team member:
9.6 ensure that contractual terms on termination, and any payments made, are fair to the individual, and to LSN, that failure is not rewarded and that the duty to mitigate loss is fully recognised;
9.7 within the terms of the agreed policy and in consultation with the Chairman and/or Chief Executive as appropriate, determine the total individual remuneration package of the company’s Chief Executive, the Chairman of the Board and, the Company Secretary including bonuses and incentive payments ;
9.8 in determining such packages and arrangements, give due regard to any relevant legal requirements, the provisions and recommendations in the Combined Code and the UK Listing Authority’s Listing Rules and associated guidance;
9.9 review and note annually the remuneration trends across LSN;
9.10 oversee any major changes in employee benefits structures throughout LSN;
9.11 agree the policy for authorising claims for expenses from the Chief Executive and Chairman;
9.12 ensure that all provisions regarding disclosure of remuneration, including pensions, are fulfilled;
9.13 be exclusively responsible for establishing the selection criteria, selecting, appointing and setting the terms of reference for any remuneration consultants who advise the committee;
9.14 obtain reliable, up-to-date information about remuneration in other organisations. The committee shall have full authority to commission any reports or surveys which it deems necessary to help it fulfil its obligations
10. Reporting Responsibilities
10.1 The Committee Chairman shall report formally to the Board on its proceedings after each meeting on all matters within its duties and responsibilities.
10.2 The Committee shall make whatever recommendations to the Board it deems appropriate on any area within its remit where action or improvement is needed.
10.3 The Committee shall produce an annual report of the company’s remuneration policy and practices which will form part of the company’s annual report.
11. Self Assessment
11.1 The Committee shall, at least once a year, review its own performance, constitution and terms of reference to ensure it is operating at maximum effectiveness and recommend any changes it considers necessary to the board for approval.
Reviewed February 2009
Approved by the Board on 24 March 2009