Page 15 - CIMA SCS Workbook November 2018 - Day 2 Suggested Solutions

CIMA NOVEMBER 2018 – STRATEGIC CASE STUDY

efficiently and effectively as possible. As there has been no issue with Anton or his pay, this
suggests that either he has been discharging his duties appropriately and the remuneration
committee are satisfied with his contribution; or it may be that the package is not getting the best
out of him and may need review or it could be that the remuneration committee is not operating
effectively and needs to be reviewed.

Nomination Committee

Another key aspect of corporate governance is the nomination committee; it should lead the
process for Board appointments and make recommendations to the Board. In terms of the make-
up of this committee, Novak should have independent non-executive directors making up the
majority of the membership on this committee, although it would be ok for Novak to have
executive directors involved on this committee too. The chair or an independent non-executive
director should chair the committee, but the chair should not chair the nomination committee
when it is dealing with the appointment of the successor to that role.

The main purpose of Novak’s nomination committee should be to evaluate the balance of skills,
experience, independence and knowledge on the Board and, in the light of this evaluation,
prepare a description of the role and capabilities required for a particular appointment. Given the
current strategic issues within the pharma industry they should be involved in recommending any
areas where Novak is lacking. They are key to the succession planning.

As Novak continues to grow they may consider the human resource management practices within
our organisation or the ability for Novak to continue to be at the forefront of new technologies
and streamlining the testing processes.

Audit Committee

For Novak an audit committee should comprise of at least three independent non-executive
directors. At least one member of the audit committee should have recent and relevant financial
experience.

The work done here is more around the performance of the internal and external audit and risk
management, so while it is a very important committee for Novak, it is less relevant to the issues
outlined by Grie Dee Capital.

Board structure

Considering the structure of the Board is very sensible, particularly given the changing nature of
the pharmaceutical world. Making sure that Novak is set up in the best possible way to move
forward should be a constant consideration.

Regarding Anton Frind’s position he appears to be satisfying the criteria that have been set for
him assuming the remuneration and nomination committee have not expressed any concerns. It
is interesting that you mention he has expressed his frustration at technology playing an
increasing role in the medical world and his dislike of computers. Novak has been at the forefront
of developing new technologies, which would suggest Anton is doing an excellent job. This may,
however, provide an opportunity for Novak to increase the skills within our company by bringing

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