Nomination Committee

Reference to "the Committee" shall mean the Nomination Committee.
Reference to "the Board" shall mean the Board of Directors.

1. Duties

1.1. The Committee shall:

1.1.1. regularly review the structure, size and composition (including the skills, knowledge, experience and diversity) required of the Board, as set out in the Board Composition and Succession Plan, compared to its current position and make recommendations to the Board with regard to any changes;

1.1.2. give full consideration to succession planning for members of the Board and for Group and Divisional Directors in the course of its work, taking into account the challenges and opportunities facing the Society, and what skills and expertise are therefore needed on the Board in the future;

1.1.3. be responsible for identifying and nominating for the approval of the Board, candidates to fill Board vacancies as and when they arise;

1.1.4. before any new appointment is made to the Board, evaluate the balance of skills, knowledge, experience and diversity on the Board, and, in the light of this evaluation, prepare a description of the role and capabilities required for a particular appointment. In identifying suitable candidates the Committee shall:

1.1.4.1. use open advertising or the services of external advisers to facilitate the search;

1.1.4.2. consider candidates from a diverse range with regard to background and gender;

1.1.4.3. consider candidates on merit and against objective criteria, but with due regard to the benefits of diversity, including gender diversity, on the Board;

1.1.4.4. consider candidates by reference to the FSA's 'fit and proper' test and the competence and capability criteria set out as part of the FSA's 'more intrusive' approach to approving individuals; and

1.1.4.5. take care to ensure appointees have enough time available to devote to the position, having regard to their other commitments;

1.1.5. keep under review the leadership needs of the Society, both executive and non-executive, with a view to ensuring the continued ability of the Society to compete effectively in the market place;

1.1.6. review the time commitments required of non-executive directors and consider annually whether each non-executive director has been able to devote enough time to adequately fulfil his/her duties;

1.1.7. ensure that prior to any new appointment of a chairman or senior independent director of the Society, a job specification is prepared for the role, including the time commitment required; and

1.1.8. ensure that on appointment to the Board, both executive and non-executive directors enter into a service contract or receive a formal letter of appointment, respectively, setting out clearly what is expected of them in terms of time commitment, Committee service and involvement outside Board meetings.

1.1.9. conduct an annual review of the Directors' Register of Interests and, if appropriate, recommend to the Board the authorisation of interests shown in the Register.

1.2. The Committee shall also make recommendations to the Board concerning:

1.2.1. formulating plans for succession for both executive and non-executive directors and in particular for the key roles of Chairman and Chief Executive (but see 1.2.7 below);

1.2.2. suitable candidates for the role of senior independent director;

1.2.3. membership of the Audit, Remuneration and Risk Committees, in consultation with the chairmen of those Committees;

1.2.4. the re-appointment of any non-executive director at the conclusion of his/her specified term of office having given due regard to his/her performance and ability to continue to contribute to the Board in the light of the knowledge, skills and experience required;

1.2.5. the re-election by members of any director under the annual re-election provisions recommended by the UK Corporate Governance Code having due regard to his/her performance and ability to continue to contribute to the Board in the light of the knowledge, skills and experience required and the need for progressive refreshing of the Board;

1.2.6. any matters relating to the continuation in office of any director at any time including the suspension or termination of service of any executive director as an employee of the Society subject to the provisions of the law and his/her service contract; and

1.2.7. the appointment of any director to executive or other office other than to the positions of Chairman and Chief Executive, the recommendation for which would be considered at a meeting of the full Board.

2. Reporting Responsibilities

2.1. The Committee Chairman shall report formally to the Board on its proceedings after each meeting on all matters within its duties and responsibilities.

2.2. The Committee shall make whatever recommendations to the Board it deems appropriate on any area within its remit where action or improvement is needed.

2.3. The Committee shall make a statement in the annual report about its activities, the process used to make appointments and explain if external advice or open advertising has not been used.

3. Other

3.1. The Committee shall, at least once a year, review its own performance, constitution and terms of reference to ensure it is operating at maximum effectiveness and recommend any changes it considered necessary to the Board for approval.

3.2 The Committee shall give due regard to applicable laws and regulations, including the FSA's Principles and Rules, the UK Listing Authority's Listing Rules and Disclosure and Transparency Rules and to the recommendations in the UK Corporate Governance Code, as appropriate.

4. Authority

4.1. The Committee is authorised to seek any information it requires from any employee of the Society in order to perform its duties.

4.2. The Committee is authorised to obtain, at the Society's expense, external legal or other professional advice on any matters within its terms of reference.

4.3 The Committee shall have access to sufficient resources in order to carry out its duties, including access to the Society's Secretariat for assistance as required.

Nomination Committee Composition

1. Membership

1.1 Members of the Committee shall be appointed by the Board and the majority of the Committee shall be independent non-executive directors.

1.2 Only members of the Committee have the right to attend Committee meetings. However, other individuals such as the Chief Executive, Group Director, HR & Corporate Affairs and external advisers may be invited to attend all or part of any meeting as and when appropriate.

1.3 Appointments to the Committee shall be for a period of up to three years, which may be extended for a further three year period (or, in exceptional circumstances, two such periods), provided the majority of the Committee members remain independent.

1.4 The Board shall appoint the Committee Chairman who shall be either the Chairman of the Board or an independent non-executive director. In the absence of the Committee Chairman and/or an appointed deputy, the remaining members present shall elect one of themselves to chair the meeting. The Chairman of the Board shall not chair the Committee when it is dealing with the matter of succession to the chairmanship.

Nomination Committee Quorum And Meetings

1. Secretary

1.1 The Secretary of the Society or their nominee shall act as the Secretary of the Committee.

2. Quorum

2.1 The quorum necessary for the transaction of business shall be two members. A duly convened meeting of the Committee at which a quorum is present shall be competent to exercise all or any of the authorities, powers and discretions vested in or exercisable by the Committee.

3. Frequency of Meetings

3.1 The Committee shall meet as required.

4. Notice of Meetings

4.1 Meetings of the Committee shall be summoned by the Secretary of the Committee at the request of any of its members.

4.2 Unless otherwise agreed, notice of each meeting confirming the venue, time and date together with an agenda of items to be discussed, shall be forwarded to each member of the Committee and any other person required to attend no later than 5 working days before the date of the meeting. Supporting papers shall be sent to Committee members and to other attendees as appropriate, at the same time.

5. Minutes of Meetings

5.1 The Secretary shall minute the proceedings and resolutions of all meetings of the Committee, including recording the names of those present and in attendance.

5.2 The Secretary shall record any conflicts of interest divulged at the meeting.

5.3 Minutes of Committee meetings shall be circulated promptly to all members of the Committee and, once agreed, to all members of the Board (unless it would be inappropriate to do so).

6. Annual General Meeting

6.1 The Chairman of the Committee shall attend the Annual General Meeting prepared to respond to any member questions on the Committee's activities.

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