The Nomination Committee is chaired by the Chairman of the Board or an INED and comprises a majority of INEDs.

Its key role is Board recruitment. It must assess the optimal composition of the Board, taking into account the issuer’s culture, strategies and objectives and diversity considerations. To identify proper candidates, the Nomination Committee should develop a list of desirable skills, perspectives and experience at the outset of the selection process.

The Nomination Committee also meets to consider the performance of the Board and benchmark against other peers.

The Nomination Committee should consider the need to refresh the board regularly to avoid entrenchment and to attract fresh thinking. It must also consider succession planning to ensure the long-term success of the issuer.

The Audit Committee is chaired by an INED and comprises a majority of INEDs.

It is mainly responsible for monitoring the integrity of the issuer’s financial statements, annual and interim reports and accounts, as well as maintaining an appropriate relationship with the issuer’s external auditors. The Audit Committee also recommends the appointment of the external auditors, and their engagement terms.

The Audit Committee is responsible for monitoring the issuer’s risk management and internal controls.

The Audit Committee also has oversight of the internal audit function (where such function exists) to ensure that internal audit is adequately resourced, has appropriate standing within the issuer, and works effectively.

To learn more on what the terms of reference for the Audit Committee should cover, please consider Code Provision D.3.3 of the CG Code. 

The Remuneration Committee is chaired by an INED and comprises a majority of INEDs.

Its main role is to advise the Board on the remuneration of directors and senior management and formulate an appropriate strategy and policy for that purpose and set formal and transparent procedures to implement the policy.

To learn more on what the terms of reference for the Remuneration Committee should cover, please consider Code Provision E1.2 of the CG Code.

The Board has the option to set up a Corporate Governance Committee for oversight of corporate governance policies and procedures. The Corporate Governance Committee may also deal with any specific compliance issues that come to the Board’s attention.

A dedicated Corporate Governance Committee helps ensure an issuer devotes appropriate attention, time and resources to corporate governance and to the identification and remediation of issues including such that involve Listing Rule compliance. It is important for issuers to continuously tailor their compliance with evolving standards and business needs.

The Board has the option to set up a separate Risk Management Committee for monitoring and managing relevant business and regulatory risks.

Regular risk assessments and reviews of the risk management systems will help the Board determine whether the systems in place (including the internal controls) are robust enough to deal with the risks faced by the issuer.