Board committees

Composition of the Audit Committee

The Audit Committee comprises three Non-Executive Directors: James Morley (Chairman of the Audit Committee), Chris Masters and Michael Averill, all of whom are considered by the Board to be independent. Biographies of each of the members of the Audit Committee are set out on this website. James Morley is a chartered accountant with over 25 years' experience as a Board member at both listed and private companies. The Board is satisfied that James Morley has recent and relevant financial experience.

The Chairman, Chief Executive and Group Finance Director, together with representatives from the external auditors and the Head of Internal Audit, are invited to attend all meetings of the Committee by the Chairman of the Audit Committee. The external auditors and the Head of Internal Audit meet privately with the Committee and are regularly invited by the Audit Committee to advise them of any matters which they consider should be brought to the Audit Committee's attention without the Executive Directors present. The external auditors may also request a meeting with the Audit Committee if they consider it necessary.

The Group Company Secretary acts as the secretary of the Audit Committee.

Operation of the Audit Committee

The Audit Committee meets at least four times in every financial year. Details of the attendance at Audit Committee meetings in each financial year are set out in Speedy Hire Plc's various annual reports, copies of which can be downloaded from this website.

The Audit Committee's duties include, inter alia:

• monitoring the integrity of the Group's Financial Statements and formal announcements relating to the Group's performance;
• monitoring the effectiveness of the external process including the appointment, cost and independence of the external auditors;
• reviewing the effectiveness of internal controls and the internal audit function; and
• reviewing the Board's process for reviewing and managing significant risk in the business.

The Audit Committee undertakes its activities in line with an annual work plan. The Audit Committee agrees the scope of the external audit work and discusses the results of the full-year audit and half-year review each year with the external auditors and the Group Finance Director and Chief Executive.

The members of the Audit Committee can, where they judge it necessary to discharge their responsibilities, obtain independent professional advice at the Company's expense.

The terms of reference of the Audit Committee are published on this website and are available in hard copy form on application to the Group Company Secretary.

Internal Control and Management

The Board is responsible for the Group's system of internal control and risk management and for reviewing its effectiveness.

The Audit Committee undertakes a regular review of the effectiveness of, and the framework for, the Group's system of internal control and risk management, including financial, operational and compliance controls.

Review of the Work of the External Auditor

Subject to the annual appointment of the external auditors by shareholders, the Audit Committee regularly reviews the relationship between the Group and external auditors. This review includes an assessment of their performance, cost-effectiveness, objectivity and independence.

The Audit Committee is responsible for ensuring that an appropriate relationship is maintained the Group and the external auditors. The Group has implemented a policy to control the provision of non-audit services by the external auditors in order to ensure that their objectivity and independence are safeguarded. This policy requires that the provision of any non-audit services in excess of £30,000 by the external auditor are subject to prior approval by the Audit Committee.

Composition of the Nomination Committee

The Nomination Committee comprises the four Non-Executive Directors: Ishbel Macpherson (the Chair of the Nomination Committee), Chris Masters, Michael Averill and James Morley, all of whom are considered by the Board to be independent. Biographies of the members of the Nomination Committee are set out in this website.

At the invitation of the Chairman of the Nomination Committee, the Chief Executive may attend meetings of the Nomination Committee.

The Group Company Secretary acts as the secretary of the Nomination Committee.

Operation of the Nomination Committee

The Nomination Committee meets at least twice in every financial year.

The Nomination Committee's duties include, inter alia:

• reviewing the size and composition of the Board and membership of the Board;
• evaluating the balance of skills, knowledge and experience of the Board;
• ensuring that succession planning is in place for the Board;
• ensuring that there is a formal and transparent procedure for the Board and making recommendations to the Board on such appointments; and
• the re-appointment of Directors following their retirement by rotation.

The Nomination Committee has a formal, rigorous and transparent procedure for the appointment of new Directors to the Board. The candidates are proposed by either the existing Board members or by an external search company. Careful consideration is given to ensure appointees have enough time available to devote to the role and that the balance of skills, knowledge and experience of the Board is maintained. When the Nomination Committee has identified a suitable candidate, the Chairman of the Nomination Committee will make a recommendation to the Board with the Board making the final decision.

When dealing with the appointment of a successor to the Chairman, the Senior Independent Non-Executive Director will normally chair the Nomination Committee instead of the Chairman.

In each financial year, the Nomination Committee reviews the balance of skills, knowledge and experience of the Board together with the size, structure and composition of the Board, and reviews the succession plans for the Board.

The members of the Nomination Committee can, where they judge it necessary to discharge their responsibilities, obtain independent professional advice at the Company's expense.

The terms of reference of the Nomination Committee are published on this website and are available in hard copy form on application to the Group Company Secretary.

Composition of the Remuneration Committee

The Remuneration Committee comprises three Non-Executive Directors: Michael Averill (Chair of the Remuneration Committee), James Morley and Chris Masters. Each of Michael Averill, Chris Masters and James Morley are considered by the Board to be independent. Biographies of the members of the Remuneration Committee are set out on this website.

At the invitation of the Chair of the Remuneration Committee, the Non-Executive Chairman and the Chief Executive may attend meetings of the Remuneration Committee, except when their own remuneration is under consideration.

The Group Company Secretary acts as the secretary to the Remuneration Committee.

Operation of the Remuneration Committee

The Remuneration Committee's duties include, inter alia:

• to make recommendations to the Board on Speedy's framework and policy for the remuneration of the Chairman, Executive Directors, Group Company Secretary and senior executives;
• to review and determine, on behalf of the Board, the executive remuneration and incentive packages to ensure such packages are fair and reasonable;
• to review and approve Directors' expenses;
• to determine the basis on which the employment of executives is terminated;
• to design the Company's share incentive schemes and other performance-related pay schemes, and to operate and administer such schemes;
• to determine whether awards made under performance-related and share incentive schemes should be made, the overall amount of the awards, the individual awards to executives and the performance targets to be used;
• to ensure that no Director is involved in any decisions as to their own remuneration; and
• to review regularly the ongoing appropriateness and effectiveness of all remuneration policies.

The Remuneration Committee meets at least four times in each financial year.

The members of the Remuneration Committee can, where they judge it necessary to discharge their responsibilities, obtain independent professional advice at the Company's expense.

The Remuneration Committee's terms of reference are published on this website and are available in hard copy on application to the Group Company Secretary.

Advisers

The Remuneration Committee receives advice from Hewitt New Bridge Street (HNBS), who are independent remuneration consultants, in connection with remuneration matters, including the provision of general guidance on market and best practice and the development of the Group's performance-related remuneration policy. The Committee also seeks advice from legal advisers, Pinsent Masons LLP, in connection with the operation of Performance Plans, Co-Investment Plans and SAYE Schemes.

Remuneration Policy and Objectives

The remuneration policy with respect to the Executive Directors has been designed to ensure that pay practices at Speedy remain appropriate for both the Group and its shareholders.

The principal objective of the policy is to attract and retain the best talent to deliver Speedy's strategy and to drive shareholder value within a framework of good corporate governance.

The key principles of this policy are:

• between lower quartile and median salaries, but with the potential to earn upper quartile rewards for sustained exceptional performance provided stretching and demanding performance conditions are met;
• a reward structure that balances short-term and long-term performance; and
• competitive incentive arrangements that are underpinned by a balance of financial and operational performance metrics to provide both a focus on business performance and alignment with the interests of shareholders.

There is no restriction on the Committee which prevents it from taking into account performance on environmental, social and governance issues. The Committee notes with approval the continued effort being made by Speedy in motivating responsible behaviour in relation to these issues by encouraging reduced energy consumption and providing incentives to choose more efficient Company vehicles. In addition, the Committee seeks to ensure that the Company's pay policies do not encourage inappropriate operational risk-taking.