Audit Committee

The Audit Committee currently comprises three independent non-executive directors. At the present time, its members are Garry Watts, Janet Morgan and Iain Duffin. Garry Watts joined the Board as a non-executive director on 1 July 2007 and became Chairman of the Audit Committee from that date. Garry Watts is a former Finance Director and a serving Chief Executive of a FTSE 350 company. The designated Committee member with recent and relevant financial experience is therefore Garry Watts.

The Committee receives reports from major business functions including the Risk Assurance Function. It also receives reports from the external auditors. It considers the scope and results of the audit, the interim and annual financial statements and the accounting and internal control systems in place throughout the Group. The Audit Committee reviews the cost effectiveness, independence and objectivity of the internal and external auditors.

View the Terms of Reference for Stagecoach Group plc Audit Committee in PDF format (67kb)

Remuneration Committee

The Remuneration Committee makes recommendations to the Board for ensuring that the Executive Directors’ and senior management remuneration is appropriate to attract, motivate and retain executive directors and senior managers of the quality needed to run the Group’s business successfully.

During the year ended 30 April 2008, Iain Duffin chaired the Remuneration Committee and the other members were Sir George Mathewson and Garry Watts, who joined the Remuneration Committee on his appointment to the Board on 1 July 2007. All three members are independent non-executive directors. Committee meetings which took place during the period from 1 May 2007 until Garry Watts was formally appointed on 1 July 2007, were attended by at least one other independent non-executive director.

The Committee has responsibility for approving the remuneration and terms of employment for the Executive Directors and the Chairman, including pensions rights and any compensation payments. The Remuneration Committee also monitors and makes appropriate recommendations with respect to the remuneration of other senior management.

The Committee has access to independent research and advice from its remuneration consultants, KPMG, appointed by the Remuneration Committee. KPMG provides certain other services to the Group, from time to time, including due diligence, tax advice, actuarial services and pension scheme audits.

View the Terms of Reference for Stagecoach Group plc Remuneration Committee in PDF format (51kb)

Remuneration Policy

The Remuneration Policy was approved by our shareholders at the 2007 Annual General Meeting. The Remuneration Committee follows the Combined Code in designing performance-related remuneration schemes.

In determining appropriate levels of remuneration for the Executive Directors, the Remuneration Committee aims to provide overall packages of terms and conditions that are competitive in the UK and will attract, retain and motivate high quality executives capable of achieving Stagecoach Group’s objectives and to ensure that they are fairly rewarded for their individual responsibilities and contributions to the Group’s overall performance.

The Remuneration Committee believes that such packages should contain significant performance-related elements and that these performance-related elements should be designed to align the interests of the executive directors and other senior managers with the interests of shareholders.

The Remuneration Committee is able to consider all relevant factors when setting executive directors’ remuneration, including environmental, social and governance matters. Performance targets are established to achieve consistency with the interests of shareholders, with an appropriate balance between short-term and long-term targets.

Performance targets can include traditional financial indicators and personal targets, successful investment, innovation, staff development, customer satisfaction, regulatory requirements and
achievement of health, safety and environmental targets.

The Remuneration Committee ensures that the incentive structure for senior management does not raise environmental, social and governance risks by inadvertently motivating irresponsible behaviour.

The Remuneration Committee regularly reviews the existing remuneration of the Executive Directors, in consultation with the Chief Executive, making comparisons with peer companies of similar size and complexity and with other companies in the public transport industry.

Proposals for the forthcoming year are then discussed in the light of the prospects for the Group. The Remuneration Committee is also kept informed of the salary levels of other senior executives employed by the Stagecoach Group. With regard to pensions, the Remuneration Committee has access to reports from pension scheme trustees and scheme actuaries regarding the cost of pension obligations.

Nomination Committee

The Nomination Committee currently comprises four non-executive directors that the Board considers to be independent, Robert Speirs (who acts as Chairman), Ewan Brown, Janet Morgan and Sir George Mathewson. The Committee also includes, by invitation, the other Non-Executive Directors, as necessary.

The Nomination Committee is responsible for evaluating the balance of skills, knowledge and experience of the Board, and where appropriate suggesting new appointments. Based on its assessment, the Committee will prepare a description of the role and the required attributes for each particular appointment. The description will include a job specification, the estimate of the time commitment expected, and the Group’s policy on directors having other significant commitments. Potential candidates will be asked to disclose their other commitments and confirm that they will have sufficient time to meet what is expected of them. The Directors are also required to report any significant changes in their other commitments as they arise.

The Committee will identify suitable candidates and make proposals for each appointment, although final appointments are the responsibility of the Board as a whole. Potential new non-executive directors are chosen based on a shortlist compiled by the Nomination Committee taking account of known candidates and candidates suggested by the Group’s advisors. For example, the selection of Garry Watts was made following a recruitment process that involved the use of external recruitment consultants and the consideration of a number of candidates. Every director met with Garry Watts prior to his formal selection by the Board. Non-executive directors receive a letter of appointment. For any new appointments, the letter of appointment sets out the expected time commitment. No Director of the Company is currently a chairman of a FTSE 100 company.

View the Terms of Reference for Stagecoach Group plc Nomination Committee in PDF format (68kb)

Health, Safety and Environmental Committee

The Health, Safety and Environmental Committee is chaired by an independent Non-Executive Director, Janet Morgan, and during the financial year comprised one other independent Non-Executive Director, Iain Duffin who joined the Committee in May 2004 and one Executive Director, Graham Eccles. Ann Gloag joined the Committee from June 2005. It was established to discuss health, safety and environmental issues across the Group and to report regularly to the Board on these matters. It has access to internal safety executives and also external consultants. The Committee met twice during the year and again in June 2005.

View the Terms of Reference for Stagecoach Group plc Health, Safety and Environmental Committee in PDF format (57kb)

Individual director participation at meetings

The following is a table of participation in full Board meetings, meetings of committees and the Annual General Meeting by director during the year ended 30 April 2008: