1. SCOPE
1.1 Purpose
1.2 Authority
The Committee is a committee of the Board of the Company. The Committee is authorised to retain external legal or other independent professional advisers, including consultants and search firms as required, and to approve the fees and other terms of any such retainer.
The Committee may request any officer or employee of the Company or any adviser to provide information to the Committee and/or to attend its meetings as required.
The Committee may delegate all or any of its responsibilities to a sub-Committee including one established solely for that purpose.
2. RESPONSIBILITIES
The responsibilities of the Committee shall be to:
2.1 Oversee the board’s governance arrangements both internal and external, to ensure that they pay due regard to best practice principles and remain appropriate for a group of the size and complexity of Lloyds Banking Group;
2.2 monitor and make recommendations to the Board on board governance issues including the establishment of appropriate policies and practices to enable the Board to operate effectively and efficiently. In this regard, the Committee will review the Group’s Board and Executive Governance Frameworks at least annually and recommend any changes to the Board;
2.3 review and recommend to the Board the appropriate structure, size and composition of the Board, having regard to the skills, experience, and leadership needs of the company and the need for effective succession planning;
2.4 lead the board appointment process for new directors, establishing appropriate selection criteria and recommending suitable candidates to the Board. Where appropriate, the Committee shall delegate the selection/nomination process to a sub-committee established specifically for that purpose;
2.5 agree the terms and conditions applicable to the appointments of non-executive directors of the Company (including the chairman of the Board). For the avoidance of doubt, this does not extend to the fees payable to non executive directors, which:
2.6 make recommendations to the Board regarding the independence of non-executive directors, the re-appointment or re-election of directors and the suitability of any director to continue in office, having regard to their individual performance and the balance of skills required on the Board;
2.7 keep membership of committees under review, agreeing appropriate changes to committee membership and notifying the Board of changes in the chairmanship or membership of individual Committees for formal ratification at least annually;
2.8 oversee the annual evaluation of the performance of the Board (including the performance of individual directors, as required) and its principal Committees and review with the Board the results of these assessments, recommending actions for addressing any findings and overseeing the implementation of any resulting action plan;
2.9 conduct an annual review of the adequacy of succession arrangements for executive directors, other members of the Group Executive Committee, and their respective direct reports;
2.10 monitor developing trends, initiatives or proposals in relation to board governance issues in the UK and elsewhere in order to determine the extent to which such initiatives impact the Company and make recommendations to the Board on any changes to be implemented;
2.11 approve trustee appointments and re-appointments to the Lloyds TSB Foundations and the Bank of Scotland Foundation, notifying the Board of changes at least annually;
2.12 review and approve the annual Corporate Governance Report for inclusion in the Company’s Annual Report and Accounts;
2.13 at least annually, or at the request of the Board at any time, to review and approve the Terms of Reference of this Committee and all the Committees of the Board, to ensure that they remain appropriate and fit for purpose, and to recommend to the Board any changes considered necessary or desirable; and
2.14 at least annually, to review the effectiveness of the Committee, and to report to the Board thereon.
3. CORPORATE GOVERNANCE STANDARDS
In discharging its responsibilities, the Committee shall have regard to established and evolving best practice corporate governance standards including, where relevant, standards set by voting agencies and voluntary codes. Where departure from the requirements of these standards or codes, including the UK Corporate Governance Code (formerly the Combined Code) is required or believed to be appropriate, the Committee shall recommend to the Board the appropriate explanation or justification or use as required, in the Company’s external disclosures.
4. MEMBERSHIP
4.1 Membership
Members of the Committee shall be appointed by the Board on the recommendation of the Chairman and shall comprise:
The members of the Committee are as shown in the Appendix.
4.2 Chairman
The Committee shall be chaired by the Chairman of the Board or, in his absence, by any other member of the Committee who shall be appointed at the meeting.
4.3 Attendees
The Committee may invite such other attendees as it deems necessary to fulfil its duties as set out above.
4.2 Quorum
Three members, one of which should be the chairman or the senior independent director.
5. MANAGEMENT
5.1 Secretary
The secretary to the committee shall be the Company Secretary or their nominee.
5.2 Papers/Agenda
Group Secretariat will support the Chairman in managing the business of the committee. The agenda and papers will be circulated to all members of the committee at least 4 working days before the meeting.
5.3 Minutes
The Secretary shall minute the proceedings of all meetings of the committee, including recording the names of those present and in attendance. Minutes of Committee meetings will be circulated promptly to all members of the committee, and the Committee Chairman will report formally to the Board on the Committee's proceedings.
5.4 Frequency
The Committee shall meet as often as necessary to fulfil its responsibilities but not less than twice a year.
6. VERSION CONTROL
6.1 Review Requirements
These terms of reference are subject to review at least annually or as required by the Board.
Appendix – Membership
Details of committee membership can be obtained from the Lloyds Banking Group plc Annual Report and Accounts 2012.
