Since EVRAZ’ Board was reduced to eight directors in early 2016, the Nominations Committee has monitored the Board’s composition to ensure that it remains appropriate and continues to uphold the integrity of the Company’s corporate governance. As a committee, we are satisfied that this is the case but will continue to keep this in view during 2017. Although we anticipate that there will be a period of stability in the Board’s membership for the foreseeable future, the Nominations Committee is beginning to look at its long-term succession planning to ensure that new directors are brought on to the Board who can maintain and, where appropriate, further enhance the skills, experiences and perspectives brought to bear on the Board’s business and decisions.
Nominations Committee report
Sir Michael Peat Senior Independent Non-Executive Director, Chairman of Nominations Committee
The Nominations Committee is responsible for making recommendations to the Board on the structure, size and composition of the Board and its committees, and overseeing succession planning for directors and senior management.
Committee members and attendance
The members of the Nominations Committee at 31 December 2016 were Sir Michael Peat (chairman), Alexander Izosimov, Karl Gruber, Alexander Abramov, and Eugene Shvidler. Sir Michael Peat served as the chairman of the Nominations Committee throughout the year.
Three of the five members of the committee were independent non-executives.
The committee met on two occasions during 2016.
The CEO attended all meetings and the company secretary acted as the committee’s secretary.
Activity during 2016
During 2016, the committee considered the following issues.
Board evaluation output
In early 2016, the committee reviewed the output from the internally facilitated Board and committee evaluation process undertaken at the end of 2015. The committee conducted a further evaluation exercise in late 2016 and considered whether there were any issues that needed to be reviewed in relation to the composition of the Board. Whilst no immediate issues were identified, the committee continues to monitor any evolving needs in relation to Board membership. The committee also considered the results of the Board Committees Effectiveness review questionnaires issued in October 2016 and collated for review in December 2016.
The composition of the Board and its committees
Following the resignations from the Board in March 2016, the committee considered the composition of the Board and the new composition of the Audit and Remuneration committees, and agreed that the size and composition of each was appropriate to the ongoing needs of the Board and the Group. The committee agreed that the Board represented a good mix of skills and experience, and that the Group had benefited from having a stable board and a group of people who interact well.
The committee considered succession planning for the future non-executive directorate, recognising the length of service of each of the current independent non-executive directors. The committee noted that the process of succession planning would need to begin in the next three years.
In August 2016, members of the committee joined the members of the Remuneration Committee to receive a presentation from the chief executive officer on succession planning among the senior executive team. The committee also received reports from the chief executive officer on the recruitment process for the chief financial officer, who was appointed in November 2016.
Independence of non-executive directors
The committee undertook a review of the independent status of the non-executive directors based on the provisions in the UK Corporate Governance Code and confirmed the appropriateness of the independent status of each of the independent non-executive directors.
Best practices for Nominations Committee
The committee undertook a detailed review of the most recent developments in corporate governance impacting the work of the Nominations Committee. This included the FRC feedback statement published in May 2016 on ‘UK Board Succession Planning’; and the updated target set by the Davies Review for 33% of FTSE350 directors to be female by 2020.
The committee also discussed the joint report issued by Ernst & Young and the ICSA in May 2016, entitled “Coming out of the Shadows” and used the 12 questions for Boards and Nomination Committees set out in that report as a basis for identifying future areas for development in relation to the role of the committee.
Performance of the chairman and individual directors
The senior independent non-executive director sought views from all directors about the performance and contribution of the chairman. The conclusions of this review were considered by the independent non-executive directors at a meeting on 27 January 2017. It was concluded, as previously, that the chairman continues to make an important contribution to the Group, including his knowledge and experience of, and contacts in, the industry. Prior to the Nominations Committee meeting on 27 January 2017, the chairman of the Group and the chairman of the Nominations Committee discussed the performance of the individual directors, including time available to devote to the Group’s business.
The Board’s diversity policy is to have board membership that reflects the international nature of the Group’s operations and at least two women as board members. Following Olga Pokrovskaya ceasing to be a director on 14 March 2016, this objective has been re-introduced. The Board will be reviewing its diversity policy with a view to 33% representation of women on the Group’s board by 2020.