The code states that if there is an effective and independent Audit Committee, the board is able to objectively review the Audit Committee’s judgments and suggestions. The company’s financial statement is a reliable source of information.
The code further explains that the Audit Committee should retain a wide range of necessary skills to perform and complete it duties and should be financially knowledgeable and able to understand matters. In order for the Board to achieve that, the Nominating Committee has to identify qualified individuals to serve as Board members and recommending such candidates for appointment to the Board and Board Committees. They have to carry out periodic evaluations for assessment of the effectiveness of the Board as a whole, Board Committees and contribution of individual Directors, including Independent Directors
The main aims of the Committee in relation to the remuneration function is to recommend the remuneration framework to attract and retain the Directors and Senior Management required to run the Company successfully for the Board’s approval. The remuneration package should be associated with the business strategy and Company’s long term objectives. The NRC oversees matters related to nomination of new Directors, annually reviews the required mix of skills, experience and other requisite qualities of Directors as well as undertakes the annual assessment of the effectiveness of the Board as a whole, its Committees and the contribution of each individual Director; and. The NRC is also primarily responsible for recommending to the Board the remuneration framework for Directors, reviewing the remuneration package for Executive Directors and Senior Management as well as the remuneration framework of employees of the Group.
Each individual Director should be annually reviewed and disclosed in the annual report The Board via the Nomination and Remuneration Committee shall establish a set of criteria for the assessment of all Directors including Independent Directors. In establishing these criteria, attention shall be given to the values, principles and skills required for the Group. These criteria will serve as a source of reference for prospective and incumbent Directors for the Board’s annual assessment and shall be reviewed regularly to maintain their relevance.
The evaluation shall cover the performance of the Board, the various Board Committees and each individual Director. The Board should disclose how it has conducted such assessment and its outcome in the annual report including the identity of the third party if the assessment is conducted by an independent third party. The Board, in assessing a Director’s independence should focus not only on whether a Director’s background and current activities qualify him or her as independent but also whether the Director can act independently of Management and free from any business or other relationship which could interfere with the exercise of independent judgement or ability to act in the best interests of the Company.