Water and wastewater services for Kent, Sussex, Hampshire and the Isle of Wight
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Board committee terms of reference

These terms of reference are subject to the overriding principles of the Southern Water Code of Southern Water Services Ltd, from March 1, 2016.

Details of each Board committee, including their formation and membership, are outlined below.

  1. Audit and Risk Review Committee 
    • Formation

      There shall be a committee of the Board called the Audit and Risk Review Committee ('ARRC').

      Terms of reference

      The scope and responsibilities of the ARRC shall be:

      • Monitoring and reviewing the effectiveness of financial, operational and compliance internal controls and risk management processes, to identify and manage the principal financial and non-financial risks and exposures
      • Reviewing and advising on matters relating to the OFR and annual statutory and regulatory accounts, having regard to audit findings
      • Reviewing all significant external and internal audit issues
      • Reviewing and advising on the engagement, remuneration, effectiveness and independence of external auditors and the scope of audit work
      • Reviewing internal audit reports, the internal audit programme and the performance of the internal audit function in the overall context of the Company’s risk management
      • Reviewing the reliability of financial information
      • Reviewing the organisation of internal controls
      • Any other matter assigned by the Board
      • To make recommendations to the Board in accordance with these terms of reference from time to time.


      Membership

      The Board shall appoint a minimum of two directors to be the ARRC, at least one of whom shall be an independent non-executive director. The Board shall appoint the chairman of the ARRC, who shall report on each meeting of the ARRC to the next meeting of the Board.

      The Chairman of the Board shall not be a member of the ARRC but may attend and speak at (but not vote at) any meeting of the ARRC. The CEO and CFO may attend and speak at (but not vote at) any meeting of the ARRC, subject to the agreement of the ARRC.

      Meetings

      The ARRC shall meet at least four times per year.

      Quorum

      The quorum for the transaction of business shall be two members.

      Voting

      Each member shall be entitled to one vote. The chairman of the ARRC shall not be entitled to a second or casting vote in the case of an equality of votes.

      Board provisions

      Subject to the specific provisions hereof as regards the ARRC, provisions applicable to the proceedings of the Board shall also apply to the proceedings of the ARRC, as appropriate.

      (July 23, 2008)

  2. Health and Safety Committee 
    • Formation

      There shall be a committee of the Board called the Health and Safety Committee ('H&SC').

      Terms of reference

      The scope and responsibilities of the H&SC shall be:

      • Reviewing and advising on the Company’s Health and Safety Policy
      • Reviewing implementation of and compliance with the Company’s Health and Safety Policy and applicable guidance and standards
      • Reviewing and advising on the promotion of heath and safety cultures
      • Reviewing incident and accident prevention performance and policies
      • Reviewing contractor health and safety management and performance
      • Reviewing significant workplace planning, control and reporting issues
      • Any other matter assigned by the Board
      • To make recommendations to the Board in accordance with these terms of reference from time to time.


      Membership

      The Board shall appoint a minimum of four directors to be the H&SC, at least one of whom shall be an independent non-executive director. The CEO, as the director designated by the Board to be responsible for health and safety, shall be a member of the H&SC.

      The Board shall appoint the chairman of the H&SC, who shall report on each meeting of the H&SC to the next meeting of the Board.

      Meetings

      The H&SC shall meet at least two times per year.

      Quorum

      The quorum for the transaction of business shall be two members.

      Voting

      Each member shall be entitled to one vote. The chairman of the H&SC shall not be entitled to a second or casting vote in the case of an equality of votes.

      Board provisions

      Subject to the specific provisions hereof as regards the H&SC, provisions applicable to the proceedings of the Board shall also apply to the proceedings of the H&SC, as appropriate.

      (July 23, 2008)

  3. Nomination Committee 
    • Formation

      There shall be a committee of the Board called the Nomination Committee.

      Terms of reference

      The scope and responsibilities of the Nomination Committee shall be:

      • regularly reviewing the structure, size and composition (including the independence, skills, experience, knowledge and diversity) of the Board, such that the requirements of the business can be met and that changes on the Board and its committees can be managed without undue disruption
      • to make recommendations to the Board with regard to any adjustments that it considers necessary in the light of any review of the Board
      • evaluating the balance of independence, skills, experience, knowledge and diversity on the Board, and, in the light of such evaluation, preparing a description of the role and capabilities required for a particular appointment
      • for the appointment of the Chairman of the Board, preparing a job specification, including an assessment of the time commitment expected
      • leading the process for identifying and nominating all candidates for the approval of the Board on merit, against objective criteria and with due regard for the benefits of diversity on the Board, including gender, to fill vacancies on the Board when they arise
      • being satisfied that regular and appropriate planning is undertaken and that plans are in place for orderly succession to Board and senior management positions, so as to maintain an appropriate balance of skills and experience within the Company and on the Board and to ensure progressive refreshing of the Board
      • reviewing and, if appropriate, endorsing the recommendations of the CEO in relation to the appointment of all senior executives
      • being satisfied that there are sufficient staff and skills sets to enable the Company to achieve its objectives
      • participating in annual Board performance evaluations, including assessment of whether all members of the Board have committed sufficient time to their duties
      • any other matter assigned by the Board
      • to make recommendations to the Board in accordance with these terms of reference from time to time.


      Membership

      The Board shall appoint a minimum of three directors to be the Nomination Committee, in accordance with the Southern Water Code, the majority shall be independent non-executive directors (which may include the Chairman of the Board) and one shall be an investor non-executive director.

      If the Chairman of the Board is a member, he/she shall chair the Nomination Committee, provided that he/she shall not chair the Nomination Committee when it is dealing with the appointment of a successor to the Board chairmanship. The Board shall appoint a different independent non-executive director to be chairman of the Nomination Committee when it is dealing with the appointment of a successor to the Board chairmanship. The Chairman shall report on each meeting of the Nomination Committee to the next meeting of the Board.

      Meetings

      The Nomination Committee shall meet at least once per year.

      Quorum

      The quorum for the transaction of business shall be three members, with the majority being independent non-executive directors.

      Voting

      Each member shall be entitled to one vote. The chairman of the Nomination Committee shall not be entitled to a second or casting vote in the case of an equality of votes.

      Board provisions

      Subject to the specific provisions hereof as regards the Nomination Committee, provisions applicable to the proceedings of the Board shall also apply to the proceedings of the Nomination Committee, as appropriate.

      Greensands

      The Nomination Committee is not required to be involved in the appointment of the two investor directors. Under the published Schedule of Matters, the appointment of all directors to the Board also requires approval at the Greensands level.

      (13 November 2017)

  4. Remuneration Committee 
    • (Compensation and Human Resources Committee to June 23, 2013).

      Formation

      There shall be a committee of the Board called the Remuneration Committee ('RemCom').

      Terms of reference

      The scope and responsibilities of the RemCom shall be:

      • Reviewing the recommendations of the CEO in relation to the appointment of all senior executives and senior management of the Group (other than in relation to the CEO, which shall be a matter for the RemCom to review)
      • Reviewing the performance and advising on the remuneration of all senior executives and senior management
      • Reviewing and advising on salaries and benefits
      • Recommending performance targets for senior executives and senior management
      • Reviewing any proposed incentive or bonus arrangements
      • Any other matter assigned by the Board
      • To make recommendations to the Board in accordance with these terms of reference from time to time.


      Membership

      The Board shall appoint a minimum of two directors to be the RemCom, at least one of whom shall be an independent non-executive director.

      The Board shall appoint the chairman of the RemCom, who shall report on each meeting of the RemCom to the next meeting of the Board.

      The CEO and CFO may attend and speak at (but not vote at) any meeting of the RemCom, subject to the agreement of the RemCom.

      Meetings

      The RemCom shall meet at least once per year.

      Quorum

      The quorum for the transaction of business shall be two members.

      Voting

      Each member shall be entitled to one vote. The chairman of the RemCom shall not be entitled to a second or casting vote in the case of an equality of votes.

      No member of the RemCom shall be entitled to vote in relation to himself or his own emoluments and benefits.

      Board provisions

      Subject to the specific provisions hereof as regards the RemCom, provisions applicable to the proceedings of the Board shall also apply to the proceedings of the RemCom, as appropriate.

      (July 23, 2008; June 26, 2013)

 
 
 
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