Terms of reference

In attendance:            

Tim Score (Senior Independent Director)

Joaquin Ayuso (Non Executive Director)

Jorge Cosmen (Non Executive Director)

Miranda Curtis (Non Executive Director)

Sir Andrew Foster (Non Executive Director)

Chris Muntwyler (Non Executive Director)

Lee Sander (Non Executive Director)

Dean Finch (Chief Executive)

Jez Maiden (Finance Director)

The Secretary

• Responsibility for overall management and long-term success of the Group
• To formulate and approve the  Group's long term objectives and strategy
• To approve changes relating to the Company's capital structure (e.g. rights issues, share division/amalgamation)
• To approve major changes to the Group's management and control structure
• To approve extension of the Group's activities into new business or geographic areas

Financial and internal controls

• Oversight of the Group's operations ensuring:
  • competent and prudent management
  • sound planning
  • an adequate system of internal control
  • adequate accounting and other records
  • compliance with statutory and regulatory obligations
• To approve the Group's annual budgets and business plans*
• To review and approve Group financing, banking and treasury policies*
• To ensure maintenance of a sound system of internal control and risk management*
• To approve the half yearly report, interim management statements and any preliminary financial announcement*
• To approve the Annual Report and Accounts including the corporate governance statement and remuneration report*
• To approve the interim dividend and recommend the final dividend*
• To approve any significant change in accounting policies/practices*
• To approve the remuneration of the auditors and recommendations for the appointment or removal of auditors*
• Monitor the performance of the Group businesses against plan and budget*
• Capital Expenditure Projects - to approve:
  • Unbudgeted expenditure over £250,000 and all expenditure over £1,000,000

Board Membership, Remuneration and Committees

• To approve the appointment of any Executive, Non-Executive Director, Chairman or Chief Executive on the recommendation of the Nomination Committee
• To approve the remuneration of the Non Executive Directors
• To approve the remuneration, terms and conditions of the Executive Directors and other senior management within the Group and approve the fees of the Chairman*
• To approve the appointment of the Senior Independent Director*
• To approve the appointment or removal of the Company Secretary*
• To ensure adequate succession planning for the board and senior management*
• To approve the division of responsibilities between the Chairman and Chief Executive
• To set terms of  reference for and membership of the Committees of the Board and receive reports as appropriate
• To approve the terms of new share incentive plans or major amendments to existing plans*

Communications

• To approve circulars and listing particulars
• To approve major public documents issued by or on behalf of the Company (routine or public statements of a minor nature may be approved by any executive director, the company secretary or the Group Communications Manager)
• To approve resolutions and documentation to put to shareholders at a general meeting

Contracts

• To approve any business acquisition or disposal in excess of £1m
• To approve material contracts entered into by the Company other than in the normal course of business
• To approve unbudgeted material contracts in the ordinary course of business above £500k

Corporate governance matters

• To undertake a formal review of its own performance, that of its own performance, its committees and individual directors
• To determine the independence of directors
• To consider the balance of interests between shareholders, employees, customers and the community
• To receive reports on the views of the Company's shareholders

Policies

• To review and approve the Group's health and safety policy and risk management strategy*
• To review and approve the Group's environmental policy*
• To review and approve policy on charitable and political donations

Other

• To approve the prosecution, defence or settlement of litigation (above £500k or being otherwise material to the interests of the Company)
• To approve overall levels of insurance for the Group and major changes to the Group's insurance programme
• To approve major changes to the Company's pension scheme arrangements
• To approve Board Minutes
• To consider any other matters put to the Board by any Director or the Company Secretary

In attendance (by invitation only):            

Sir Andrew Foster

Chris Muntwyler

Chief Executive as appropriate

Finance Director as appropriate

Other Non Executive Directors as appropriate

External Auditor (at least once a year) as appropriate

Internal Auditor (as required) as appropriate

The Secretary

The quorum for the Committee shall be two.

The Committee is authorised by the Board to investigate any activity within its terms of reference. It is authorised to seek any information it requires from any employee and all employees are directed to co-operate with any request made by the Committee.

The Committee is authorised by the Board to obtain outside legal or other independent professional advice and to secure the attendance of outsiders with relevant experience and expertise if it considers this necessary.

• To make recommendations to the board, for it to put to shareholders for their approval in general meeting, in relation to the appointment, reappointment and removal of the external auditor and to approve the remuneration and terms of the engagement of the external auditor.
• To review and monitor the external auditor's independence and objectivity and the effectiveness of the audit process, taking into consideration relevant UK professional and regulatory requirements.
• To develop and implement policy on the engagement of the external auditor to supply non-audit services, taking into account relevant ethical guidance regarding the provision of non- audit services by the external audit firm; and to report to the board, identifying any matters in respect of which it considers that action or improvement is needed and making recommendations as to the steps to be taken.
• To discuss with the external auditor before the audit commences the nature and scope of the audit and to review the auditors’ quality control procedures and steps taken by the auditors to respond to changes in regulatory and other requirements.
• To review findings of the audit with the external auditor including a discussion on major issues arising from the half year and final audits, and any matters the auditor may wish to discuss (in the absence of management where necessary).
• To review the external auditor’s management letter and management’s response.

Financial  Statements

• To review the half-year and annual financial statements, and any formal announcements relating to the company's performance, before submission to the Board, focusing particularly on:
  • critical accounting policies and practices and any changes to them
  • major judgmental areas
  • the extent to which the financial statements are affected by any unusual transactions in the year and how they are disclosed
  • the clarity of disclosures
  • significant adjustments resulting from the audit
  • the going concern assumption
  • compliance with accounting standards
  • compliance with the UKLA's Listing Rules and other legal requirements
  • all material information presented with the financial statements, such as the business review / operating and financial review and the corporate governance statement (insofar as it relates to the audit and risk management)
  • reviewing the company's statement on internal control systems prior to endorsement by the board and to review the policies and process for identifying and assessing business risks and management of those risks by the company

• To review the internal audit programme, ensure co-ordination between the internal and external auditors, and ensure that the internal audit function is adequately resourced and has appropriate standing within the Group
• To approve the appointment or dismissal of the head of internal audit or, if applicable, external firm providing internal audit services
• To consider the major findings of the internal audit investigations and management's response.

Other matters

• To review the effectiveness of the Company's internal control, financial reporting, corporate governance and risk management systems
• To review and approve the statements to be included in the annual report concerning internal controls and risk management
• To review procedures for detecting fraud
• To review the company's procedures for handling allegations from whistleblowers and ensure that arrangements are in place for the proportionate and independent investigation of such matters and for appropriate follow up action.
• To review the company's systems and controls for the prevention of bribery and receive reports on non-compliance.
• To arrange for periodic reviews of its own performance and, at least annually, review its constitution and terms of reference and recommend any changes it considers necessary to the board for approval.
• To consider other topics, as defined by the Board. 

In attendance:            

Miranda Curtis (Chairman)

Lee Sander

Tim Score

The Secretary

Remuneration consultants (as appropriate)

The Chief Executive and the Chairman may as appropriate be invited to attend and speak at meetings of the Committee.  However, no Director shall attend any discussion or participate in any decision concerning their own remuneration.

The Committee is authorised by the Board to seek any information it requires from any employee of the Company in order to perform its duties.

The Committee is authorised by the Board, when the fulfilment of its duties requires, to obtain legal or other professional advice including the advice of independent remuneration consultants, to secure the attendance of external advisors at its meetings, if it considers this necessary, and to obtain reliable, up-to-date information about remuneration in other companies, at the Company's expense. 

• Determine and agree with the Board the framework for the remuneration of the Chief Executive, Executive Directors, the Chairman, the Company Secretary and other members of the senior management team as it is designated to consider.
• Adopt as the objective of such policy the recommendation of the UK Corporate Governance Code ("the Code") on Directors' Remuneration. That is to provide a level of remuneration "sufficient to attract, retain and motivate directors of the quality required to run the company successfully", but avoid paying more than is necessary for this purpose and to structure a proportion of the remuneration to link rewards to corporate and individual performance.
• The remuneration of the Non-executive Directors is a matter for the Board alone.
• Within the terms of the agreed policy, determine the fees for the Chairman
• Determine the remuneration and conditions of employment of the Chief Executive and Executive Directors including bonus payments, pension arrangements and share incentive awards.
• Approve the remuneration and conditions of employment of the Company Secretary and other members of the senior management team as it is designated to consider.
• Note the remuneration and conditions of employment of other senior management and note remuneration trends across the Group.
• In determining such packages and arrangements, give due regard to the comments and recommendations of the Code, the UK Listing Authority's Listing Rules and best practice of interested investor groups.
• Ensure that contractual terms on termination, and any payments made, are fair to the individual and the company, that failure is not rewarded and that the duty to mitigate loss is fully recognised.
• Be aware of and advise on any major changes in employee benefit structures throughout the company or Group.
• Agree the policy for authorising claims for expenses from the Chief Executive and Chairman.
• Ensure that provisions regarding disclosure of remuneration, including pensions, as set out in the Directors' Remuneration Report Regulations 2002 and the Code, are fulfilled.
• Review and approve the Directors' Remuneration Report in the annual report and accounts.
• Be exclusively responsible for establishing the selection criteria, selecting, appointing and setting the terms of reference for any remuneration consultants who advise the committee.
• Make the committee's terms of reference publicly available. These should set out the committee's delegated responsibilities and be reviewed and, where necessary, updated annually.
• Review and approve the design of all share incentive plans for approval (where appropriate) by shareholders. For any such plans determine individual awards to be made and performance targets to be used.
• To approve the grant of awards or options under any of the Company's share incentive plans.
• Determine targets for any performance-related pay schemes operated by the company.
• To arrange for periodic reviews of its own performance and, at least annually, review its constitution and terms of reference and recommend any changes it considers necessary to the board for approval.
• To consider and decide upon such other matters as the Board may refer to it. 

 In attendance:            

Jorge Cosmen

John Devaney (Chairman)

The Secretary

The Committee shall meet at least once a year.

The Chief Executive may as appropriate be invited to attend and speak at meetings of the Committee. However, no Director shall attend any discussion concerning their own appointment to any position.

The Committee is authorised by the Board, when the fulfilment of its duties requires, to obtain legal or other professional advice including the advice of independent recruitment consultants, to secure the attendance of external advisors at its meetings, if it considers this necessary at the Company's expense.

• To regularly review the structure, size and composition of the board (including skills, knowledge, experience and diversity) and make recommendations to the board with regard to any changes.
• To identify and nominate for the approval of the board, candidates to fill board vacancies as and when they arise.
• Before making an appointment, to evaluate the balance of skills, knowledge, experience and diversity on the board and, in the light of this evaluation, prepare a description of the role and capabilities required for a particular appointment.
• To review annually the time required from a non-executive director. Performance evaluation will be used to assess whether the non-executive director is spending enough time to fulfil their duties.
• To consider candidates from a wide range of backgrounds and look beyond the "usual suspects".
• To give full consideration to succession planning in the course of its work, taking into account the challenges and opportunities facing the company and what skills and expertise are needed on the board in the future.
• To keep under review the leadership needs of the organisation, both executive and non-executive, with a view to ensuring the continued ability of the organisation to compete effectively in the marketplace and make recommendations to the board.
• To make a statement in the annual report about its activities; the process used for appointments and explain if external advice or open advertising has not been used; the membership of the committee, number of committee meetings and attendance of members over the course of the year.
• To make publicly available its terms of reference explaining clearly its role and the authority delegated to it by the board.
• To ensure that on appointment to the board, non-executive directors receive a formal letter of appointment setting out clearly what is expected of them in terms of time commitment, committee service and involvement outside board meetings.
• To make recommendations to the board concerning any matters relating to the continuation in office of any director at any time.
• To arrange for periodic reviews of its own performance and, at least annually, review its constitution and terms of reference to and recommend any changes it considers necessary to the board for approval.
• To consider  and decide upon such other matters as the Board may refer to it.

In attendance:            

The Secretary

The Committee is authorised by the Board to approve routine matters as detailed below within the normal course of business

• To approve the opening of new bank accounts, the persons to act as authorised signatories and the limits of authority in the UK and overseas.
• To approve arrangements with financial institutions for loan and other bank facilities.
• To approve guarantees and indemnities in connection with the issue of bonds, guarantees, indemnities, letters of credit or the operation of any bank account or other financial arrangement by any bank or financial institution.
• To approve amendments to the operation of the Company's Business Visa Card Account.
• To consider and approve issues relating to the National Express Group Staff Pension Plan which require the approval of NX as Principal Employer.
• To consider and approve routine amendments to the terms of the Group's Train Operating Company Franchise Agreements.
• To consider and approve routine amendments to the rules of the Company's share incentive plans where necessary for administrative or tax reasons.
• To approve changes to the share structure of subsidiary companies including the transfer of shares held by the Company in any subsidiary.
• Final fixing of interim and final dividends pursuant to guidance from the full Board.
• To approve routine circulars and listing particulars.
• To approve charitable donations up to £25,000 in any one year.
• To agree the terms of and approve the granting of any power of attorney given on behalf of the Company.

In attendance:            

Chris Muntwyler (Chairman)

Joaquin Ayuso

Miranda Curtis

Jorge Cosmen

John Devaney

Sir Andrew Foster

Lee Sander

Tim Score 

As appropriate:

Safety and Environment Director

Executive Directors

The Secretary

The Committee is authorised by the Board to seek any information it requires from any employee of the Company in order to perform its duties.

The Committee is authorised by the Board, when the fulfilment of its duties requires, to obtain legal or other professional advice, to secure the attendance of external advisors at its meetings, if it considers this necessary at the Company's expense.

• To review Group safety practices, procedures and record and make recommendations of changes to the board as appropriate.
• To review Group environmental practices, procedures and record and make recommendations of changes to the board as appropriate.