CHARTER (REVIEWED APRIL 2019)
1. THIS CHARTER
This Charter sets out the functions and responsibilities of the FRC Nominations Committee (Committee).
The functions of the Committee are:
- to review annually the composition of, and criteria for appointment to, the Australian Accounting Standards Board (AASB) and the Auditing and Assurance Standards Board (AUASB);
- to make recommendations annually to the Financial Reporting Council (FRC) for the appointment of members to the AASB and AUASB;
- to review, periodically, the succession needs of the AASB and AUASB in discussion with the Chair of the AASB and AUASB respectively; and
- to consider and report, at least annually, to the FRC on the performance review of the AASB and AUASB Members.
The Committee will:
- establish and periodically review Guidelines concerning the framework for appointments to the AASB and AUASB1 and publish them on the FRC website.
- make a recommendation, annually, to the FRC on the desired size and composition of the Boards including skill and mix and the eligibility criteria for appointment.
- advertise periodically to seek applications from persons interested in being considered for appointment to the AASB and/or AUASB as a member, other than the Chair;
- maintain a schedule of eligible nominees who meet the eligibility criteria established by the FRC on the recommendation of the Committee for AASB and AUASB members, including the Chair;
- for appointments to the AASB and AUASB, other than the Chair, interview and evaluate candidates on the basis of merit and make recommendations to the FRC for its consideration;
- recommend appointments to the AASB and/or AUASB for a maximum of 3 years with the possibility of extension for a further 2 terms. For members to be reappointed for the third time they must re-apply through an open interview process. Appointment for a second term may occur without a further FRC interview, provided the peer review results and Chair feedback are satisfactory;
- consider casual vacancies as appropriate, when advised by the Chair of the AASB or AUASB, as a result of mid-term resignations or extended leave of absences permitted under the ASIC Act Sections 236D and 236H;
- recommend termination of the appointment of a member of the AASB or AUASB (other than the Chairs), if the member becomes bankrupt, applies to take the benefit of any law for the relief of bankrupt or insolvent debtors, compounds with their creditors, makes an assignment of their remuneration or property for the benefit of their creditors, or contravenes S237 Confidentiality requirements (ASIC Act S236C, S236G). The Committee may recommend termination of the appointment of a member of the AASB or AUASB (other than the Chair) for misbehaviour or physical or mental incapacity or breach of the terms and conditions of the member's appointment after taking due legal advice and providing all interested parties are afforded hearing of their views (ASIC Act S236B, 236G);
- oversee the process by which Members of the AASB and AUASB are expected, as part of their duties, to complete and provide feedback on the annual peer review for the AASB and AUASB. The review will be analysed by the Committee and feedback given to the respective Chair and the FRC on Board Member performance. In the event a peer review is not completed, the relevant Chair will be advised to follow up on the matter. The relevant Chair is responsible for providing feedback to the individual Board member. Committee feedback on the AASB and AUASB Chairs is provided as part of the FRC member peer review process; and
- as part of the recruitment of AASB and AUASB members, consider upcoming appointments to key relevant international bodies requiring financial reporting, assurance, external reporting or educational responsibilities in these areas, where it is important that Australia has influence, and where appropriate identify suitable candidates to promote for appointment.
4. MEMBERSHIP OF THE COMMITTEE AND QUORUM
Members of the Committee are appointed by the FRC.
The Committee comprises a member of the FRC as Chair, at least one other FRC Member and the Chairs of the AASB and AUASB. The FRC Chair is a Member ex-officio.
A quorum is any three Committee Members.
Members will advise the Committee of any potential or actual conflicts of interest at the commencement of any meeting. If a Member becomes aware outside a meeting of a potential or actual conflict that may give rise to questions being asked over a Member's role/involvement on the Committee, the Member will raise the matter with the Committee Chair2 and/or the FRC Chair.
As appropriate, the Committee may invite other relevant persons to attend meetings and provide input as necessary, including as an observer only.
The Committee will meet at least semi-annually, and more frequently as required.
Minutes of the meetings of the Committee will be drafted and confirmed at the following meeting and should ordinarily be included in the papers for the next full FRC meeting.
The key matters discussed at each Committee meeting are to be reported by the Committee Chair to the FRC at the next scheduled FRC meeting. The report will include all matters that are relevant to the function and responsibilities of the Committee.
7. OTHER MATTERS
The Committee shall also perform any other activities consistent with this Charter that the Committee or the FRC deem appropriate.
The Committee will review its Charter on a regular basis, at least every two years.
1 - FRC Nominations Committee
2 - Where the Committee Chair has a potential or actual conflict of interest, the matter is to be raised with the FRC Chair for their consideration.