Vector > Corporate > Investor relations > Governance > Board Committees

Board Committees

The board committees review and analyse company policies and strategy, usually developed by management, within their terms of reference. They also examine proposals, and where appropriate, make recommendations to the full board. Committees do not take actions or make decisions on behalf of the board unless specifically mandated beforehand by the board to do so. Committee members and chairpersons are appointed by the board. Directors may attend any meeting of a board committee.
 
Attendance records of board and committee meetings for the year ended 30 June 2010 are provided in the table below:
 
  Full Board Audit Committee Nominations Committee

Regulatory Committee

 Remuneration Committee Risk and Assurance Committee
Total Meetings 10 4 1 2 2 4
Current Directors            
Michael Stiassny 10 3 1 2 2 4
Peter Bird 10 1* 0 2 2* 1*
James Carmichael 10 4 0 2 2* 4
Tony Carter 10 2* 1 1* 2 4
Hugh Fletcher 10 4 1 0 2* 0
James Miller 10 4 0 2 2* 4
Alison Pateron 9 4 1 1* 2 3
Karen Sherry 10 3 0 2 2 4
Bob Thomson 9 4 0 2 2* 4
 
*Director attending committee meeting who is not a member of the committee
 
There are currently five board committees, which have been set up to assist in the execution of the board’s responsibilities, each of which is subject to a defined charter. The five board committees are:
  • Audit Committee
  • Regulatory Committee
  • Risk and Assurance Committee
  • Nominations Committee
  • Remuneration Committee. 
 
Audit Committee
The audit committee must comprise at least three directors, each of whom is a non-executive and the majority of whom are independent. The chairperson must be an independent director who is not the chairperson of the board. Alison Paterson (chair), James Carmichael, Hugh Fletcher, James Miller, Karen Sherry, Michael Stiassny and Bob Thomson are currently members of the audit committee. The committee extends a standing invitation to the chief executive and chief financial officer where appropriate.

At least one member of the committee must have an adequate accounting or financial background, which requires the following:

  • membership of the Institute of Chartered Accountants of
    New Zealand; or
  • has held a chief financial officer position with a listed company for more than 24 months; or
  • has successfully completed a NZX approved course for audit committee membership; or
  • has experience and/or qualifications deemed satisfactory by the board.

Of the current audit committee, Michael Stiassny and James Miller meet these criteria.

The terms of reference for the audit committee are defined in the audit committee charter. In summary, the committee is responsible for:

  • assisting the board to perform its oversight responsibilities in relation to financial reporting and regulatory compliance;
  • reviewing financial reporting processes, internal controls, the audit process and the company’s process for monitoring legal and regulatory compliance; and
  • reviewing treasury risk management controls.
The committee also acts as a forum for communication between the board and senior financial management and internal and external auditors where appropriate. The committee meets with external and internal auditors at least once a year, and, for at least part of that meeting, no company employees are present.
 
The committee considers and recommends to the board the appointment of external and internal auditors. This includes considering the independence of external and internal auditors (including reviewing the range of services provided by the auditors in the context of all consulting services bought by the company). While rotation of audit firms is not required, the committee shall ensure that the same audit partner does not lead the company’s audit for more than five consecutive years.
 
Regulatory Committee
The regulatory committee must comprise at least three directors. The committee extends a standing invitation to the chief executive and general manager regulation & pricing where appropriate. James Miller (chair), Peter Bird, James Carmichael, Karen Sherry, Michael Stiassny and Bob Thomson are currently members of the regulatory committee.
 
The terms of reference for the regulatory committee are identified in the regulatory committee charter. In summary, the committee is reponsible for:
  • providing strategic guidance and feedback to the board and management on Vector's regulatory policy and practice; and
  • act as a formal forum for the free and open communications between the board and management on regulatory issues.
Risk and Assurance Committee
The risk and assurance committee must comprise at least three directors, and a standing invitation exists for attendance to the chair of the executive risk and compliance committee (ERAC). Karen Sherry (chair), James Carmichael, Tony Carter, James Miller, Alison Paterson, Michael Stiassny and Bob Thomson are currently members of the risk and assurance committee.

The terms of reference for the risk and assurance committee are identified in the risk and assurance committee charter. In summary, the committee is responsible for:

  • assisting the board to perform its oversight responsibilities relating to the identification, analysis and management of risks which may have a significant influence on the performance of the company; and
  • considering and, if appropriate, approving the recommendations of the ERMC for submission to the board and to provide strategic guidance and feedback to the board and ERAC on Vector’s risk management policy.
Nominations Committee
The nominations committee must comprise at least three directors of which the majority will be, wherever possible, independent and non-executive directors. Michael Stiassny (Chair), Tony Carter, Hugh Fletcher and Alison Paterson are members of the nominations committee.
The terms of reference for the nominations committee are identified in the nominations committee charter. In summary, the committee is responsible for:
  • establishing and reviewing criteria for determining the suitability of potential directors, and identifying and recommending suitable candidates for director nomination or appointment;
  • the engagement and induction of all directors;
  • board review and evaluation process and procedures; and
  • making determinations about the independent status of all directors.

The committee’s charter provides for the nominations committee to undertake non-binding consultation with the AECT prior to finalising any board recommendation regarding a director nomination or appointment.

Vector’s constitution requires that AECT approval be obtained to the appointment or removal of directors of subsidiary companies (except listed and non-operating subsidiaries).
 
Remuneration Committee
The remuneration committee must comprise at least three directors, and extends a standing invitation to the chief executive officer and the general manager corporate where appropriate. Tony Carter (chair), Alison Paterson, Karen Sherry and Michael Stiassny are currently members of the remuneration committee.

The terms of reference for the remuneration committee are identified in the remuneration committee charter. In summary, the committee is responsible for:

  • considering all senior management appointments (chief executive and senior executive positions), including contractual conditions;
  • monitoring the outcomes of policy implementation at senior management level, including incentive payments; and
  • reviewing company remuneration policy, at least annually.

Vector’s policy is that remuneration of executives and directors shall be at fair and reasonable levels measured against a competitive market. Remuneration levels for executives are determined in accordance with the company’s remuneration policy, a summary of which is available on Vector’s website. Directors’ remuneration is determined on the basis of an independent assessment of the competitive market and authorised by an ordinary resolution of shareholders.