Committees

The Board has Audit, Nomination and Remuneration Committees as well as an Environmental, Social and Governance (‘ESG’) Committee. Each Committee has formal, written terms of reference which are available. All Committees have at least three independent non-executive directors within their composition with the exception of the ESG Committee which has at least three Board directors (two being non-executive and one being the Chief Executive) and two members of the Rotork Management Board (being the Strategy and M&A Director and the Group HR Director in the first instance). The Company Secretary advises and acts as secretary to the Committees.

In addition to the principal Committees outlined above, the Board also maintains a Disclosure Committee to ensure that Rotork complies with its obligations in relation to the control and disclosure of inside information under the Market Abuse Regulation. Membership of the Disclosure Committee currently comprises the Chief Executive, the Finance Director and the Company Secretary and it operates under formal, written terms of reference.

The Committees have authority to take external, independent professional advice at Rotork’s expense for matters relating to the discharge of their duties.

Audit

Chair: Sally James
Members: Peter Dilnot, Ann Christin Andersen, Tim Cobbold, Janice Stipp

The role and activities of the Committee

The Committee provides oversight of the financial reporting process, the audit process, the Company’s system of internal controls and compliance with laws and regulations. 

The activities of the Audit Committee undertaken during 2020 can be found on pages 104 to 107 of the Annual Report.

Terms of reference for the Audit Committee

Nomination

Chair: Martin Lamb
Members: Sally James, Peter Dilnot, Ann Christin Andersen, Tim Cobbold, Janice Stipp

The role and activities of the Committee

The Committee evaluates and examines the skills and characteristics needed to ensure the Board has the right balance, knowledge and attributes to operate effectively to deliver the long-term success of the Company, in a culture that is aligned with the company Purpose and business strategy, and promotes integrity. It also reviews the succession needs of the organisation and puts in place the appropriate processes for nominating, training and evaluating directors, bearing in mind the need for diversity.

The activities of the Nomination Committee undertaken during 2020 can be found on pages 108 to 109 of the Annual Report.

Succession planning

Succession planning for the Board and senior management is continuous and during the year the Nomination Committee considered the need to maintain an appropriate balance of skills and experience within the Company and on the Board and to ensure progressive refreshing of the Board and senior management.

Diversity and inclusion

The Board seek to attain a diverse mix of skills, experience, knowledge and background. In considering diversity, gender plays an important role but the Board also takes into account social and ethnic background, and other cognitive and personal strengths. The Board Diversity and Inclusion Policy provides a high level indication of the Board’s approach to diversity and inclusion in senior management roles which is governed in greater detail through the Group’s policies.

The Board is committed to the terms of the 30% Club, of which it is a member, and to the aspirations of the Hampton-Alexander objective of 33% female representation by, or as soon as possible after, the target date of 2020. The Group also notes the objectives of the Parker review for at least one BAME Board member by, or as soon as possible after, the target date of 2021.

As at 31 December 2020, there were three female directors at Board level, equating to 37.5% female Board representation, which exceeds the measure recommended by the Hampton-Alexander Review. Details of the percentage of women in senior leadership positions and within the Group can be found on page 62 of the Annual Report.

Board evaluation

The Board performed an internal review of its effectiveness in 2020. The review included an assessment of the effectiveness of the Committee including how it discharged its responsibilities. Further details on the results of this review and any resulting actions can be found at page 99 of the Annual Report.

Terms of reference for the Nomination Committee.

Remuneration

Chair: Tim Cobbold
Members: Sally James and Ann Christin Andersen, Janice Stipp

The role and activities of the Committee

The Committee’s primary function is to recommend to the Board an overall strategy for the remuneration of executive directors and senior management and, within the agreed strategy, determine a remuneration policy for executive directors which is aligned to the long-term success of the Company and its shareholders.

The statement from the Chair of the Remuneration Committee and the activities of the  Committee undertaken during 2020 can be found on pages 110 to 137 of the Annual Report.

Terms of reference for the Remuneration Committee.

Environmental, Social and Governance

Chair: Ann Christin Andersen
Members: Tim Cobbold, Kevin Hostetler (Chief Executive), Vijay Rao (Strategy and M&A Director), Kathy Callaghan (Group HR Director)

The role and activities of the Committee

The Committee provides oversight and direction to ensure that environmental, social and governance concerns are an integral part of the Company’s strategy and culture from the top down.

The activities of the ESG Committee undertaken during 2020 can be found on pages 102 to 103 of the Annual Report.

Terms of Reference for the ESG Committee.