Nomination Committee

Nomination Committee

The Nomination Committee's principal responsibility is to keep the composition and balance of the Board under review, consider succession planning, lead the process for Board appointments and make recommendations to the Board on all new appointments and re-appointments of Directors. The Nomination Committee also makes recommendations for the membership of the Audit Committee and the Remuneration Committee.

During the period the Nomination Committee met primarily to discuss the composition of the Board and the recruitment of new Non-Executive Directors to help with the Company's objective of moving the composition of the Board towards compliance with the 2010 Code. Subsequent to period end, it met to discuss the appointment of two new Non-Executive Directors and the process for the recruitment of a new Chief Financial Officer of the Group.

Meetings: The Nomination Committee meets when necessary and will normally meet no fewer than twice a year. The Nomination Committee met three times during the period.

Members and chairman: The Nomination Committee is chaired by the Senior Independent Director, David Grigson, and all of the other Non-Executive Directors (including the Chairman) are members of the Nomination Committee. The composition of the Nomination Committee changed during the period with the appointment of Douglas McCallum effective on 3 October 2011 and will change subsequent to period end with the appointments of Wendy Becker and Alex Mahon.

Independence: The 2010 Code requires that a majority of members of a nomination committee be independent non-executive directors.

The Nomination Committee, as at the date of this annual report, comprises seven members. The Directors expect that at the time that the various Board appointments and resignations (noted above) take effect the Nomination Committee will comprise eight members, including the Chairman, five independent Non-Executive Directors, and two Non-Executive Directors who are not deemed to be independent for the purposes of the 2010 Code. Accordingly, the Company will comply with the relevant requirements of the 2010 Code.

Non-Executive Director Appointments: The Company had previously stated its objective to re-balance the Board in favour of Non-Executive Directors who are considered independent under the 2010 Code. The Nomination Committee's work has resulted in the recruitment of three new independent Non-Executive Directors, namely, Douglas McCallum, Wendy Becker and Alex Mahon.

In each case of Non-Executive Director appointment, the process was led by the chairman of the Nomination Committee. Professional services consultants, Lygon Group and The Zygos Partnership were instructed by the chairman of the Nomination Committee in connection with separate recruitment processes. In each case, the Nomination Committee considered the skills, knowledge, background and experience required for the role of the non-executive director, and prepared a job specification for the role. A number of Directors including the chairman of the Nomination Committee, the Chairman, the Chief Executive Officer and other Directors interviewed numerous candidates for each role of non-executive director. The Nomination Committee also specified the time commitment expected of the role and confirmed with candidates that each had sufficient time available to devote to the role. Following extensive searches, the chairman of the Nomination Committee made separate recommendations to the Board to appoint as independent Non-Executive Director Douglas McCallum, Wendy Becker and Alex Mahon. As noted above, the appointments of Wendy Becker and of Alex Mahon to the Board were made following the period end.

Executive Director Appointments: The Nomination Committee's and Board's deliberations during the period included a discussion about the size and composition of the Executive Director team. The Board felt that additional executive support for the Chief Executive Officer would be needed in overseeing the Group's operations. Consequently, in January 2011, the Board approved the appointment of Mark Richardson, previously Head of Technology and a long-standing member of the Management Committee to the position of Operations Director. This new Executive Director role means that Mark Richardson has taken responsibility for the day-to-day technical and operating side of the business, and in turn allows the Chief Executive Officer to spend additional time on the Group's strategy and growth plans. This appointment was also significant in that it was the Group's first internal promotion to executive director level.

Following the announcement on 23 January 2012 that Executive Director and the Chief Financial Officer, Andrew Bracey, had indicated that he intended to resign from the Board, the Nomination Committee commenced a formal process to identify his successor. This recruitment process which is being conducted by Tim Steiner and the Company's director of Human Resources, under the oversight of the Nomination Committee, is ongoing as at the date of this annual report.

Reviewing Board composition: The Nomination Committee will continue to meet regularly to consider the Board size and composition and to ensure that plans are in place for the orderly succession of appointments to the Board including Executive Director roles.

The Company will continue to seek to recruit new non-executive directors so that the Board meets the independence requirements of the 2010 Code. Given the large number of changes to the Board in the past 12 months the Nomination Committee has decided to allow some time for the current Board composition to settle before making further appointments.

As part of this process, the Nomination Committee expects to reassess in due course the current balance of skills and experience of the re-composed Board with the aim that it will highlight areas of skill and experience that could be filled by any new Board appointees, in future.

Diversity: In considering the size and composition of the Board the Nomination Committee had taken account of various factors including skills, experience and diversity of the existing Board. The Nomination Committee remained conscious of the need to address the diversity of the Board, including gender diversity, as part of its plan to recruit new non-executive directors. As noted above, both of the most recent appointments to the Board are women.

Terms of reference: As described earlier in the Statement of corporate governance, the Nomination Committee has reviewed its own performance and terms of reference to ensure it is operating effectively and has recommended any changes it considers necessary to the Board for approval. As a result, amendments to the Nomination Committee's terms of reference were made and approved by the Board.

The Nomination Committee's revised terms of reference are available on the website (www.ocadogroup.com/corporate-responsibility/corporate-governance.aspx) and set out the Nomination Committee's responsibilities.

David Grigson
Chairman of the Nomination Committee