50Glanbia plc Annual Report 2011www.glanbia.comDirectors' Report: GovernanceCommittee ReportsAs part of its responsibilities, the Committee reviews the independence of the Auditors (who as part of the process have confirmed their independence in wriiting) and the amount and nature of non-audit work they perform on an annual basis. ActivitiesThe principal activities undertaken by the Committee in the period under review are set out below.Risk management> Review of the risk reporting processes.> Evaluation of the key areas of risk for the Group and the steps taken to mitigate such risks through a series of risk presentations from senior management.> Oversight of the annual Glanbia Risk Management System which confirmed the continued existence of an operational risk awareness culture throughout the Group.> A full and half-year assessment of the Board's performance against regulatory requirements and best practice guidance was completed, following which the Committee reported to the Board expressing its level of satisfaction with the Group's internal control and risk management systems.Internal controls> The Committee received and considered reports during the year from the Auditors, in order to assess the quality and effectiveness of the internal control system. These included reports on any key matters arising from the statutory audit in relation to the financial reporting process and the Group's Internal Audit function on the work undertaken in reviewing and auditing the control environment. > The Committee assessed the effectiveness of the Group's internal controls in accordance with the Turnbull Guidance and reviewed the related disclosures in the annual report. > Internal controls were assessed in detail as part of the biannual Control Self-Assessment process. > The Committee reviewed and updated the Group Treasury policies.> The Committee formally reviewed the arrangements by which staff of the Group may raise concerns (in confidence) about possible improprieties in matters of financial reporting or other matters and ensured that arrangements are in place for the proportionate and independent investigation and follow-up action required in relation to such matters.Going concernThe Committee reviewed the effectiveness of the process undertaken by the Directors to evaluate going concern, including the analysis supporting the going concern statement and disclosures in the financial statements, and were satisfied that a robust assessment had been made, further detail in respect of which is given on page 76.Financial reportingThe Committee monitored the statutory audit of the annual and consolidated financial statements and:> reviewed the financial statements and, as part of this process, the significant financial reporting estimates contained within them; and > reviewed the financial statements in the 2010 annual report and the 2011 half-yearly report, and received a report from the Auditors on the financial statements.Internal AuditThe Committee:> approved the Internal Audit programme for 2011 based on a Group risk profile assessment across the key financial, operational and regulatory risks;> reviewed the output from the Internal Audit programme during the year and considered progress against the programme; and> reviewed the effectiveness of the Group's Internal Audit function.Auditors The Committee:> agreed the approach and scope of the audit work to be undertaken by the Auditors;> reviewed the Group's processes for disclosing information to the Auditors; > reviewed the effectiveness and independence of the Auditors. Based on the results of this review the Committee proposed to the Board that it recommend that the shareholders support the re-appointment of the Auditors at the 2012 Annual General Meeting; and> agreed the Auditors' fees in respect of the 2011 audit work.Review of Committee performanceThe Board and Committee assessed its performance, covering terms of reference, composition, procedures, contribution and effectiveness. As a result of that assessment, the Committee is satisfied that it is functioning effectively and it has met its terms of reference. On behalf of the Audit CommitteeJohn Callaghan Audit Committee Chairman2011 Committee meeting attendanceAttendance at scheduled Committee meetings during the year ended 31 December 2011MemberAppointedNumber of full years on the Committee2011 meeting attendanceJ Callaghan13 Jan 1998145/5L Herlihy8 June 2001105/5Mn Keane29 June 201015/5H Corbally7 July 200565/5V Quinlan 9 June 2005*52/2P Gleeson26 July 2011Less than 1 year2/2P Haran9 June 200565/5J Liston10 June 200295/5M Merrick26 July 2011Less than 1 year2/2* Retired 26 May 2011
Glanbia plc Annual Report 201151Directors' Report: GovernanceCommittee Reportswww.glanbia.comNomination Committee reportDear Shareholder,I am pleased to present the Nomination Committee Report for 2011. The current composition and size of the Board is driven by the historic custom and practice of Glanbia Co-operative Society Limited, which owns 54.4% of the Company, to nominate from its Board of Directors 14 of the 18 Non-Executive Directors for appointment to the Board of the Company. Much of the work of the Committee in 2011 involved implementation of various changes recommended by Glanbia Co-operative Society Limited.I am aware of the large debate generally arising from the Davies Report about diversity in the board room with particular reference to gender diversity. In 2012, the Committee is planning to review the composition of the Non-Executive Directors and will look at succession planning to evaluate the right balance of independence, skills, knowledge and gender required for our next phase of growth, recognising the challenge in the fact that Glanbia Co-operative Society Limited nominates 14 of our 18 Non-Executive Directors.Liam HerlihyNomination Committee ChairmanGovernance The Committee was in place throughout 2011. Liam Herlihy, the Group Chairman, has been Chairman of the Committee since 2008. The Committee comprises four Non-Executive Directors, of which two members constitute a quorum. The Group Secretary acts as Secretary to the Committee.When dealing with any matters concerning his membership of the Board, the Group Chairman will absent himself from meetings of the Committee as required and such meetings will accordingly be chaired by the Senior Independent Director, John Callaghan. ActivitiesThe principal activities undertaken by the Committee in 2011 are set out below.Re-appointment of DirectorsThe Committee recommended to the Board that all the Directors of the Board be put forward for re-appointment by the shareholders of the Company at the 2012 Annual General Meeting.Review of Non-Executive Directors' independence in accordance with the guidance in the UK Corporate Governance Code and the ISE Annex (the 'Codes'). The Committee reviewed the independence of Non-Executive Directors in accordance with the guidance in the Codes. The guidance in the Codes suggests a number Members. Liam Herlihy (Committee Chairman). John Callaghan (FCA,FIB). Paul Haran (B.Sc., M.Sc.). Jerry Liston (B.A., MBA)Key responsibilities > Making recommendations to the Board on the appointment and re-appointment of Directors.> Planning for the orderly succession of new Directors to the Board. > Keeping under review the leadership needs of the Group both Executive and Non-Executive, with a view to ensuring the continued ability of the Group to compete effectively in the market place.> Recommending to the Board the membership and chairmanship of the Audit and Remuneration Committees. > Keeping the extent of Directors' other interests under review to ensure that the effectiveness of the Board is not compromised.The full terms of reference of the Nomination Committee can be found on the Group's website www.glanbia.com or can be obtained from the Group Secretary. Liam Herlihy Nomination Committee Chairman and Group Chairmanof factors could be relevant to the determination of a Non-Executive Director's independence including: representing a significant shareholder, former service as an executive and extended service to the Board. However, the Codes also make it clear that a director may be considered independent notwithstanding the presence of one or more of these factors. This reflects the Board's view that independence is determined by a director's character and judgement.The Committee concluded that, throughout the reporting period, all Non-Executive Directors demonstrated the essential characteristics of independence and brought independent challenge and deliberations to the Board through their character, objectivity and integrity. This conclusion was presented to and agreed with the Board.