16. Composition of the management body and the appointment and succession of its members

Without prejudice to national company law, the management body should have an adequate number of members and an appropriate composition and should be appointed for an appropriate period. Nominations for re-appointment should take place only after considering the assessment result regarding the performance of the member that has been observed during the last term.

All members of the management body should be suitable. Without prejudice to members being elected by and representing employees, the management body should identify and select qualified and experienced members and ensure appropriate succession planning for the management body that is consistent with all legal requirements regarding composition, appointment or succession of the management body.

Without prejudice to the shareholders ’ rights to appoint members, when recruiting members of the management body the management body in its supervisory function or, where established, the nomination committee, should actively contribute to the selection of candidates for vacant management body positions in cooperation with human resources and should:

• a. prepare a description of the roles of and capabilities for a particular appointment;
• b. evaluate the adequate balance of knowledge, skills and experience of the management body;
• c. assess the time commitment expected; and
• d. consider the objectives of the diversity policy.

The recruitment decision should, where possible, take into account a shortlist containing a preselection of suitable candidates which takes into account the diversity objectives set out in the institution’s diversity policy and the elements in Title V of these Guidelines. The decision should take into account the fact that a more diverse management body fosters constructive challenge and discussion based on different points of view. Institutions should not however recruit members of the management body with the sole purpose of increasing diversity to the detriment of the functioning and suitability of the management body collectively, or at the expense of the suitability of individual members of the management body.

The member of the management body should be aware of the culture, values, behaviours and strategy associated with that institution and its management body, where possible, before taking up the position.

Without prejudice to the shareholders’ rights to appoint and replace all members of the management body simultaneously, when establishing a succession plan for its members the management body should ensure the continuity of decision-making and prevent, where possible, too many members having to be replaced simultaneously. Succession planning should set out the institution’s plans, policies and processes for dealing with sudden or unexpected absences or departures of members of the management body, including any relevant interim arrangements. Succession planning should also take into account the objectives and targets defined in the institution’s diversity policy.