52Glanbia plc Annual Report 2011Directors' Report: GovernanceCommittee Reportswww.glanbia.comThe Committee acknowledged that:> John Callaghan had served on the Board for 14 full years;> Jerry Liston had served on the Board for nine full years;> William Murphy, who retired as Deputy Group Managing Director in September 2005, remains on the Board as a Non-Executive Director; and> 14 of the Non-Executive Directors are nominated by the Board of Glanbia Co-operative Society Limited, for appointment to the Board of the Company, of which both Liam Herlihy and Henry Corbally had served as Directors for nine years or more.Appointment of Directors of the CompanyDuring 2011, the Committee recommended the appointment of four new Non-Executive Directors, William Carroll, David Farrell, Patrick Murphy and Eamon Power to the Board. The Committee noted their nominations by Glanbia Co-operative Society Limited, the experience and suitability of the nominees and recommended their appointment to the Board of the Company which was subsequently approved by the Board.Appointment of Henry Corbally as Vice-Chairman of the CompanyThe Committee recommended the appointment of Henry Corbally as Vice-Chairman of the Company to the Board. The Committee noted his nomination by Glanbia Co-operative Society Limited, the experience of Mr. Corbally and his suitability for the role of Vice-Chairman of the Company and recommended his appointment as Vice-Chairman of the Board of the Company which was subsequently approved by the Board.Board and Committee membership During the year the Committee recommended to the Board that Henry Corbally be appointed to the Remuneration Committee following the retirement of Victor Quinlan. The Committee also recommended that Patrick Gleeson and Matthew Merrick be appointed to the Audit Committee. These changes were implemented during the year by the Board.Review of the time required from a Non-Executive DirectorThe Committee assessed the time dedicated to the Company by each Non-Executive Director. This review also considered the extent of the Non-Executive Directors' other interests to ensure that the effectiveness of the Board is not compromised by such interests.The Board and Committee are satisfied that the Group Chairman and each of the Non-Executive Directors commit sufficient time to the fulfilment of their duties as Group Chairman and Directors of the Company respectively. The Group Chairman held a number of other directorships during the year including Irish Dairy Board Co-operative Society Limited and Irish Co-operative Organisation Society Limited (from which he resigned during the year) and farms at Headborough, Knockanore, Tallow, Co. Waterford, but the Committee and the Board considers that these did not interfere with the discharge of his duties to the Group.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. The Committee did not use an external search consultancy or open advertising for the appointment of the new Non-Executive Directors as they were nominated by the Board of Glanbia Co-operative Society Limited for appointment to the Board.On behalf of the Nomination Committee Liam HerlihyChairman2011 Committee meeting attendanceAttendance at scheduled Committeee meetings during the year ended 31 December 2011DirectorAppointedNumber of full years on the Committee2011 meeting attendanceL Herlihy5 June 200832/3J Callaghan8 June 2001103/3P Haran9 June 200563/3J Liston10 June 200293/3
Directors' Report: GovernanceGlanbia plc Annual Report 2011Committee reportswww.glanbia.com53Composition of the Remuneration Committee and attendance at meetingsThe Remuneration Committee comprises six Non-Executive Directors, of which three members constitute a quorum. The Remuneration Committee met eight times during 2011.The Group Managing Director and the Group Human Resources/Operations Development Director attend Committee meetings by invitation only. They absent themselves when their remuneration is discussed and no Director is involved in considering their own remuneration. The Group Secretary acts as secretary to the Remuneration Committee.Advice and assistance to the Remuneration CommitteeThe Remuneration Committee received independent external advice from Towers Watson Remuneration Consultants, particularly in the formulation and design of the executive remuneration policy 2012-2014, market trends and competitive positioning of remuneration packages, as required. Towers Watson is a member of the Remuneration Consultants Group and adheres to the Voluntary Code of Conduct in relation to executive remuneration consulting. Legal advice to the Remuneration Committee has been provided by Arthur Cox, who also provided other legal services to the Group during the year. The Remuneration Committee also received assistance and advice on remuneration policy, when required, during the year from the Group HumanResources/Operations Development Director, Brian Phelan.Remuneration Committee reportDear Shareholder,I am pleased to present the Remuneration Committee Report for the year ended 31 December 2011. The report details the remuneration principles, policy and actual remuneration of the Group's Executive Directors for that period. The report also details the proposed changes to executive remuneration policy, which was reviewed by the Remuneration Committee in 2011 and which will be effective from 2012 to 2014 inclusive. The revised executive remuneration policy was approved by the Board in November 2011. The key objectives of the 2012-2014 policy are to ensure that Glanbia's remuneration policy represents:> an executive reward system designed to drive superior performance and sustainable, growth for the Group;> best practice in executive reward; and> latest governance practice.An advisory non-binding resolution to approve this report and an ordinary resolution to approve an amended 2008 LTIP will be put to the Annual General Meeting ('AGM') on 9 May 2012.Jerry Liston Remuneration Committee Chairman Jerry Liston Remuneration Committee ChairmanMembers. Jerry Liston (B.A., MBA)(Committee Chairman). Liam Herlihy (Group Chairman). Martin Keane (Vice-Chairman). Henry Corbally (Vice-Chairman). John Callaghan (FCA, FIB). Paul Haran (B.Sc., M.Sc.)Executive remuneration principles and policyRemuneration policy is based on attracting, retaining and motivating executives to ensure that they perform in the best interests of the Group and its shareholders by growing and developing the business. Performance-related elements of remuneration are designed to form an appropriate portion of the overall remuneration package of Executive Directors. These link remuneration to Group performance and individual performance, whilst aligning the interests of Executive Directors with those of shareholders.Key responsibilities> Determine and agree with the Board the framework or broad policy for remuneration of the Non-Executive Directors, the Executive Directors and other senior executives as required.> Determine, within the agreed policy, individual total compensation packages for the Non-Executive Directors, the Executive Directors and other senior executives as required.> Recommend to the Board any employee share-based incentive schemes, award levels and vesting and any performance conditions to be used for such schemes.> Consider and approve Executive Directors' and other senior executives total compensation arrangements annually.The full terms of reference of the Remuneration Committee can be found on the Company's website www.glanbia.com or can be obtained from the Group Secretary.