Terms of reference People & Performance Committee 1. Establishment and membership 1.1. The Board has established the People & Performance Committee under section 13 of the Electricity Corporations Act 2005. 1.2. The rules and procedures adopted by the Board from time to time (Board Rules) apply to the committee, except as expressly varied by these terms of reference. 1.3. In addition to the membership criteria set out in the Board Rules: The committee will be comprised exclusively of not less than three non executive directors, a majority of whom are independent directors. The committee chair must be an independent non executive director. The Board chair may not chair the committee. The quorum for any meeting of the committee will be any two committee members. 1.4. No committee member may participate in any discussion or review regarding his or her terms of service or performance (including remuneration). 1.5. A record of the current members of the committee is maintained by the General Counsel 1. 2. Purpose 2.1. The committee s purposes is to assist the Board to discharge its fiduciary and corporate governance responsibilities by: (e) Reviewing Board composition to confirm that it holds appropriate operational and technical expertise to fulfil its duties and functions Assisting the Board Chair to oversee the succession planning for directors, the Chief Executive Officer (CEO) and the CEO s direct reports Assisting the Board in establishing and monitoring compliance of the corporation s remuneration and human resources governance framework, including management policies, strategies and practices Assisting the Board in establishing a framework for the periodic performance review of the Board, its committees, the Chief Executive Officer and his or her direct reports. Attending to any other matter or perform any function referred to the Committee by the Board. 1 DM#13011101 Page 1
3. Powers 3.1. Subject to any resolution of the Board, the committee is required to make recommendations to the Board and does not have any executive powers to commit the Board or Western Power to the implementation of those recommendations. 3.2. Notwithstanding clause 3.1, the Committee has the authority to approve the minutes of its meetings without the endorsement of the Board. 3.3. The committee may by resolution institute any special investigations (including requesting management or external consultants to provide information or access to records) and consult independent experts (at the corporation s cost) if it considers it necessary to fulfil its purposes and/or to carry out its duties, and will make recommendations to the Board arising from such investigations. The committee chair must approve the financial expenditure for any such investigation or expert. 4. Duties The committee has the following duties: 4.1 Corporate governance Provide oversight in the development of, and make recommendations to the Board in relation to, the corporation s governance and other policies. Review the appropriateness of the governance principles including with regard to conflicts of interest) and compliance with its governance policies and procedures, and make recommendations to the Board. 4.2 Human resources management Review and make recommendations to the Board on the effectiveness of the corporation s key human resources management policies and systems and other terms and conditions of service of the corporation s staff and non executive directors (including on remuneration and diversity (including but not limited to the proportion of men and women in the workplace at all levels and remuneration by gender)), to ensure that they are prudent and will allow the corporation to achieve its strategic objectives. 4.3 Staff (other than the CEO) Ensure that there is an effective performance evaluation system. Review, make recommendations to the Board (as required) and oversee implementation of the corporation s remuneration policies, including performance incentive schemes (if any) and superannuation arrangements. Oversee compliance with: minimum standards of merit, equity and probity applicable to the management of the corporation s staff (as per section 21 of the Act); a joint policy on staff transfers (as per section 23 of the Act); and (iii) the corporation s code of conduct (as per section 31 of the Act). Endorse the appointment or removal of the Company Secretary. 4.4 Chief Executive Officer Subject to clause 4.4: Page 2
make recommendations to the Board on the nomination or removal of the CEO and who should act in the position during a vacancy or any period exceeding three months when the CEO is unable to carry out his or her duties 2 ; and develop and make recommendations to the Board (and oversee implementation of) policies relating to remuneration and other terms and conditions of service of the CEO. (e) (f) Ensure that the Minister s consent is obtained to any proposed appointment, or removal, of the Chief Executive Officer, or of any alteration of his or her terms and conditions of service (including remuneration). Ensure that the performance of the CEO and the CEO s direct reports is reviewed annually. Assist the Board Chair, as requested, to conduct an annual evaluation of the performance of the CEO. Ensure that an appropriate succession plan is in place for the CEO and the CEO s direct reports. Make recommendations to the Board regarding the remuneration arrangements of the CEO s direct reports, provided that Board approval is not required in relation to a termination payment proposed to be made to a direct report where the amount in question does not exceed that payable under the relevant contract of employment and the CEO reports details of the termination arrangement to the committee at its next meeting. 4.5 Non executive directors Having regard to the requirements of the Act and the strategic direction of the corporation: (iii) (iv) establish criteria for membership of the Board and its committees; assess periodically the size and composition of, and the skills required to discharge the duties of, the Board and its committees; identify any specific responsibilities of individual members of the Board and its committees (including the Board Chair); and ensure that an appropriate succession plan that takes into consideration an appropriate mix of skills, experience, expertise and diversity is in place for nonexecutive directors. Subject to Board endorsement, seek the Minister s approval of any policy relating to remuneration, and other conditions of service of non executive directors and oversee the application of that policy. Review periodically the time required from non executive directors and whether directors are devoting sufficient time to the discharge of their roles and responsibilities. 4.6 Director and Board performance Endorse and recommend to the Board for approval the processes to assess the performance and effectiveness of the Board, its committees and individual directors. 2 The authority to appoint an acting Chief Executive Officer for periods less than three months has been delegated to the Board Chair (Resolution 081/2015/BD). Page 3
4.7 Accountability to the Board Review the committee s terms of reference biannually and report any recommended changes to the Board. Report regularly to the Board on its activities by way of a verbal report at Board meetings from the committee chair and the provision to the Board of a copy of the minutes of each committee meeting. Prepare any additional reports for the Board as requested by the Board. 4.8 The duties described in paragraphs 4.3, 4.4 and 4.4 (f) do not include the power to approve budgets for remuneration reviews and performance incentive schemes. The committee s authority is limited to making recommendations to the Board for approval. 5. Meetings 5.1 The committee will meet as frequently as required. 5.2 The committee chair may convene a special meeting at any time. The place and time of a special meeting will be decided by the committee chair. 5.3 The following persons may attend committee meetings as invitees (but will not have a vote at committee meetings): (iii) (iv) (v) Chief Executive Officer Executive Manager Customer and Corporate Services; Head of Human Resources or a nominated representative; General Counsel or a nominated representative; any other person approved by the chair of the committee. 6. Review 6.1. Unless review and amendment is required sooner, these Terms of Reference will be reviewed by 1 August 2018 and updated as required. Committee members may at any time submit to the Committee Chair proposed changes to these Terms of Reference for consideration. 6.2. All amendments endorsed by the Committee Chair must be submitted to the Committee for endorsement and subsequently to the Board for approval, prior to taking effect. Page 4
Approval history Version Approved by Approved on Resolution no. Notes 1. Board 01/05/2006 2. Board 22/09/2006 BD/091/2006 3. Board 27/04/2007 BD/015/2007 4. Board 29/06/2007 BD/032/2007 5. Board 21/12/2007 BD/061/2007 6. Board 26/06/2009 044/2009/BD 7. Board 28/08/2009 076/2009/BD 8. Board 17/05/2010 9. Board 30/07/2010 074/2010/BD 10. Board 17/12/2010 115/2010/BD 11. Board 28/08/2012 016/2013/BD 12. Board 28/09/2012 027/2013/BD 13. Board 29/01/2013 047/2013/BD 14. Board 16/08/2013 013/2014/BD 15. Board 02/09/2014 031/2015/BD 16. Board 02/08/2016 014/2017/BD Changes resulting from review. Page 5