Nominations Committee report.

Composition

The Nominations Committee comprises the following Directors:

Name Nominations Committee position
Roy Brown Chairman
Tufan Erginbilgic Member (from 9 May 2011)
Shonaid Jemmett-Page Member
Richard Parry-Jones Member
John Sheldrick Member
Nigel Stein Member (from 1 January 2012)
Michael Turner Member

Sir Kevin Smith was a member of the Committee until his retirement from the Board on 31 December 2011.

In accordance with the provisions of the UK Corporate Governance Code, the majority of members are independent non-executive Directors.

The secretary to the Committee is Judith Felton, Company Secretary.

Role

The role of the Nominations Committee is to lead the process for identifying, and making recommendations to the Board on, candidates for appointment as Directors of the Company and as Company Secretary, giving full consideration to succession planning and the leadership needs of the Group. It also makes recommendations to the Board on the composition of the Nominations Committee and the composition and chairmanship of the Audit and Remuneration Committees. It keeps under review the structure, size and composition of the Board, including the balance of skills, knowledge, experience, ethnicity and gender and the independence of the non-executive Directors, and makes recommendations to the Board with regard to any changes. The Nominations Committee follows Board-approved procedures in making its recommendations.

Written terms of reference that outline the Committee’s authority and responsibility are available on our website at www.gkn.com. The terms were considered as part of the Board’s performance evaluation review as described in the corporate governance statement.

Advice provided to the Committee

From time to time the Committee appoints external search consultants to provide support in recruiting and selecting individuals for potential appointment to the Board. During 2011, MWM Consulting and Zygos Partnership were engaged by the Committee. Neither of these firms provides any other services to the Group.

Activities

The Committee met on five occasions in 2011. Members’ attendance at these meetings is set out in the table in the corporate governance statement.

The Committee’s main focus in the year was on the succession process for both the Chief Executive and the Chairman roles.

In identifying a new Chief Executive to take over from Sir Kevin Smith on his retirement at the end of the year, the Committee’s focus was to find an individual with proven leadership capabilities in a multinational business who could lead the development of the Group’s strategy in particular driving future growth, both organic and through acquisition. An extensive process was conducted involving consideration of both internal and external candidates, following which the Committee recommended Nigel Stein to the Board as successor to the Chief Executive.

The process for the selection of a Chairman, to succeed Roy Brown on his retirement in May 2012, was conducted by a Selection Panel comprising those non-executive Directors who did not wish to apply for the role, and with support from Roy Brown, Sir Kevin Smith as Chief Executive and Nigel Stein as Chief Executive Designate. Following a thorough process during which the Panel considered both internal and external candidates, Michael Turner was recommended to the Board as GKN’s next Chairman.

Both these appointments were unanimously approved by the Board.

The Committee also recommended, and the Board approved, changes in the executive Director responsibilities (of Marcus Bryson and Andrew Reynolds Smith) as a consequence of Nigel Stein’s appointment as Chief Executive. In addition, following a successful search process by the Committee, the Board approved its recommendation to appoint Tufan Erginbilgic to strengthen the non-executive membership of the Board following the retirement of Helmut Mamsch in late 2010.

Performance evaluation

Details of the Board and Committee evaluation process which took place during the year can be found in the corporate governance statement.

On behalf of the Committee

Roy Brown
Chairman of the Nominations Committee

27 February 2012