Peachtree 2013 Annual Report Download - page 69

Where necessary and appropriate, recruitment consultants are used
to assist the Committee in delivering its objectives and responsibilities.
The Committee leads the process for the identification and selection
of new directors and makes recommendations to the Board in respect
of such appointments. The Committee also makes recommendations
to the Board on membership of its committees.
The Committee terms of reference, which can be found on our website
(www.sage.com), are reviewed on an annual basis and updated
as required.
Committee meetings
The Committee is required, in accordance with its terms of reference,
to meet at least once per year. During this financial year, the Committee
met three times.
Activities of the Committee
During the year, the Nomination Committee dealt with a number
of matters, including:
– The appointment of three non-executive directors (one of whom
has since retired from the Board);
– A number of senior executive appointments; and
– A review of succession planning for key executives at Board level
and below.
In identifying potential new non-executive directors, the Committee
has retained the services of Lygon Group, The Zygos Partnership and
Egon Zehnder as executive search consultants. These consultants have
no connection to Sage other than the provision of these services. They
provided and continue to provide lists of potential candidates having
regard to Sage’s policies and the terms of reference of the Committee.
During the original search for new non-executive directors, a number
of candidates met members of the Committee, who then determined
to approach three new non-executive directors. The three new
non-executive directors were independent on their respective
appointments to the Board. The Committee settled the terms
of their appointments which were recommended to the Board.
In identifying a potential new CFO, the Committee retained the
services of Russell Reynolds as executive search consultants.
They have no connection with the Company other than for the provision
of executive search services. During the search, a number of candidates
met members of the Committee and other senior executives. Following
these meetings, the Committee determined to approach Mr Hare.
The Committee determined the terms of his appointment which were
recommended to the Board.
The search is ongoing for non-executive directors to join the Board.
Sage and the Committee value the aims and objectives of The Davies
Report on Women on Boards and support and apply the Group
diversity policy set out on page 51. Prior to Jo Harlow’s retirement,
there was 25% female representation at Board level. Whilst no formal
measurable objectives have been set for female representation at Board
level, the Board must continue to provide strong leadership at Sage,
and, therefore, the Committee having regard to the Group diversity
policy, continues to recommend for appointment only the most
appropriate candidates to the Board.
Remuneration Committee
Ruth Markland, Senior Independent Director, is Chair of the
Remuneration Committee. Other members of the Committee are the
Chairman, Donald Brydon and independent Non-executive Directors
Jonathan Howell and Neil Berkett.
Committee objectives and responsibilities
The Committee determines the policy for the remuneration of the
Chairman, executive directors, the Company Secretary and senior
executives of Sage.
The Committee is responsible for making recommendations to the
Board, within agreed terms of reference, on Sage’s framework of
executive remuneration. The Committee determines the contract terms,
remuneration and other benefits for each of the executive directors,
including performance share awards, performance-related bonus
schemes, pension rights and compensation payments. The Committee
also monitors remuneration for senior executives below Board level. The
Board itself determines the remuneration of the non-executive directors.
The Committee is advised by Deloitte LLP, an independent firm of
remuneration consultants. Services provided by other parts of Deloitte are
specific corporate finance support in the context of merger and acquisition
activity and unrelated corporate advisory services plus the provision of
regular tax compliance services to our North American business.
The Committee terms of reference, which can be found on our website,
are reviewed on an annual basis and updated as required.
Committee meetings
The Chairman, along with all non-executive directors are members
of the Committee and attend each meeting. The Chief Executive may,
as required, attend meetings, except where his own performance
or remuneration are under review.
The Committee is required, in accordance with its terms of reference,
to meet at least four times per year. During this financial year, the
Committee met six times.
In order to fulfil its objectives and responsibilities, the Committee
is satisfied that it receives sufficient, reliable and timely information
in advance of meetings.
Activities of the Committee
Full details of Sage’s remuneration policy and the matters addressed
in the year can be found in the Directors’ remuneration report on pages
74 to 88.
Internal controls and risk management
The system of internal controls and risk management is designed to meet
our particular needs and to address the risks to which our business
is exposed. By its nature, this system can only provide reasonable,
not absolute, assurance against material misstatement or loss.
The effectiveness of the system of internal controls and risk
management is regularly reviewed by the Board and complies with the
UK Corporate Governance Code 2012. There is an ongoing process for
identifying, evaluating and managing the significant risks faced by the
Group which is managed on a day-to-day basis by the Group Risk and
Assurance Director and such a review was undertaken during the year.
Monitoring and review
There are processes in place to monitor the system of internal controls
and the reporting of any significant control failings or weaknesses and
planned mitigating actions. These processes include annual certification,
internal audit activity and Audit Committee review.
On an ongoing basis, Sage operating companies certify to the risk and
assurance team working with the Group Risk and Assurance Director
that Sage’s policy requirements have been received and understood.
In addition, management representations covering compliance with
relevant policies and the accuracy of financial information are collated
on an annual basis.
67The Sage Group plc | Annual Report & Accounts 2013
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