annual report 2007 - the Admiral Group plc

26 CORPORATE GOVERNANCE· Reports from the external auditors on their audit, proposed audit scope, fees and auditorindependence;· Performance of the internal audit department through self assessment (the internal auditdepartment is subject to external assessment once every five years);· The Group’s ‘whistleblowing’ procedures.The Committee adopted a policy on non-audit services that, amongst other things, requires thatthe Committee approve all proposals for expenditure of over £30,000 on non-audit services.The policy was last reviewed on 28 November 2007. The Group’s auditors, KPMG Audit plc,provide some non-audit services, the majority of which comprise compliance services on thevarious taxation issues within the Group, and which are not considered by the Committee tocompromise their independence as auditors. In addition, the Committee reviewed the fees withrespect to VAT services in relation to the Group’s Gibraltan insurance Company and agreed thatthe work carried out did not compromise the auditor’s independence. The level of non-audit feesis reviewed at each Committee meeting and details are included in note 10 of the Report andAccounts.The Head of Internal Audit is invited to all Committee meetings and provides a range ofpresentations and papers to the Committee, through which the Committee monitors theeffectiveness of the Group’s internal controls. Committee members receive copies of allinternal audit reports and are given the opportunity to raise questions on the content andrecommendations contained within the reports. The Committee approves the internal auditprogramme at the start of each calendar year and monitors the progress made in achieving theplan.During the year, the Committee received a presentation from the Group’s external actuaries, Ernst& Young, on reserving methodologies used in assessing the Group’s claims reserves.The Committee also approves the annual compliance review plan and receives copies of thesereports. The Group’s Company Secretary, who has responsibility for the Compliance and Riskmanagement functions, provides the Committee with a quarterly Compliance Officer’s reportsummarising the activities in this area.The Committee has a policy that provision of external audit services be tendered every fiveyears. This was last carried out in 2006 when the decision was made to retain the services of theincumbent external auditors. At the same time the external audit partner was rotated.The Nominations CommitteeThe membership at the year-end was Keith James (Chairman), Lucy Kellaway and Alastair Lyons.The Company Secretary acts as Secretary to the Committee. The Committee normally invitesthe Chief Executive to attend meetings.The Committee has formal terms of reference, which were last reviewed on 22 November 2007.The Committee met on two occasions during 2007.The Committee leads the process for making appointments to the Board or where the appointeeis likely to become a Board member. The Committee ensures there is a formal, rigorous andtransparent procedure for the appointment of new Directors to the Board through a fullevaluation of the skills, knowledge and experience of Directors. The Committee also ensuresplans are in place for orderly succession for appointments to the Board, and reviews the plans forother senior management positions. Responsibility for making senior management appointmentsrests with the Chief Executive.