HC-4 HC-4 Appointment, Training and Evaluation of the Board
HC-4.1 HC-4.1 Principle
HC-4.1.1
The
licensee must have rigorous and transparent procedures for appointment, training and evaluation of the Board.January 2013HC-4.2 HC-4.2 Nominating Committee
HC-4.2.1
The board must establish a Nominating Committee of at least three
directors which must:(a) Identify persons qualified to become members of the board of directors or Chief Executive Officer, Chief Financial Officer, Corporate Secretary and any other officers of thelicensee considered appropriate by the Board, with the exception of the appointment of the internal auditor which shall be the responsibility of the Audit Committee in accordance with Paragraph HC-3.2.1 above; and(b) Make recommendations to the whole board of directors including recommendations of candidates for board membership to be included by the board of directors on the agenda for the next annual shareholder meeting.January 2013HC-4.2.2
The committee should include only
independent directors or, alternatively, onlynon-executive directors of whom a majority should beindependent directors and the chairman should be anindependent director . This is consistent with international best practice and it recognises that the Nominating Committee should exercise judgment free from personal career conflicts of interest.January 2013HC-4.3 HC-4.3 Nominating Committee Charter
HC-4.3.1
The Nominating Committee must adopt a formal written charter which must, at a minimum, state the duties outlined in Paragraph HC-4.2.1 and the other matters included in Appendix B to this Module.
January 2013HC-4.4 HC-4.4 Board Nominations to Shareholders
HC-4.4.1
Each proposal by the board to the shareholders for election or reelection of a
director must be accompanied by a recommendation from the board, a summary of the advice of the Nominating Committee, as applicable, and the following specific information:(a) The term to be served, which may not exceed three years (but there need not be a limit on reelection for further terms);(b) Biographical details and professional qualifications;(c) In the case of anindependent director , a statement that the board has determined that the criteria ofindependent director have been met;(d) Any other directorships held;(e) Particulars of other positions which involve significant time commitments; and(f) Details of relationships between:(i) The candidate and thelicensee ; and(ii) The candidate and otherdirectors of thelicensee .January 2013HC-4.4.2
The chairman of the board should confirm to shareholders when proposing re-election of a
director that, following a formal performance evaluation, the person's performance continues to be effective and continues to demonstrate commitment to the role. Any term beyond six years (e.g. two three-year terms) for adirector should be subject to particularly rigorous review, and should take into account the need for progressive refreshing of the board. Serving more than six years is relevant to the determination of a non-executivedirector's independence.January 2013HC-4.5 HC-4.5 Induction and Training of Directors
HC-4.5.1
The chairman of the board must ensure that each new
director receives a formal and tailored induction to ensure his contribution to the board from the beginning of his term. The induction must include:(a) Meetings with senior management, internal and external auditors and legal counsel;(b) Visits to thelicensee's facilities; and(c) Presentations regarding strategic plans, significant financial, accounting and risk management issues and compliance programs.January 2013HC-4.5.2
All continuing
directors must be invited to attend orientation meetings and alldirectors must continually educate themselves as to thelicensee's business and corporate governance.January 2013HC-4.5.3
Management, in consultation with the chairman of the board, should hold programs and presentations to
directors respecting thelicensee's business and industry, which may include periodic attendance at conferences and management meetings. The Nominating Committee shall overseedirectors' corporate governance educational activities.January 2013