Download Public Interest Committee Terms of Reference

Public Interest Committee
Terms of Reference
KPMG LLP
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Duties of the Public Interest Committee
The Public Interest Committee shall be responsible for overseeing the public interest aspects
(including having regard to the legitimate interests of clients, government, financial institutions,
employers, employees, investors, the business and financial community and others who rely on the
objectivity and integrity of the accounting profession to support the propriety and orderly functioning
of commerce) of the decision making of the LLP including the management of reputational risks for
LLP. In addition the Public Interest Committee will be responsible for engaging, together with senior
management of the LLP, in dialogue with the Financial Reporting Council and external stakeholders in
particular representatives of shareholders in Public Interest Entities (as defined by the International
Federation of Accountants) audited by the LLP.
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Composition and membership of the Public Interest Committee
2.1
The Public Interest Committee shall comprise at least three independent non-executive. Such
non-executives shall be appointed by the Chair, on recommendation of the Nomination and
Remuneration Committee, and approved by the Board.
2.2
The members of the Public Interest Committee shall be appointed for a term of up to three
years, with the option for this to be renewed for an additional period of up to three years, up to a
maximum term of five years (or as otherwise determined by the Board).
2.3
The members of the Public Interest Committee may be removed at any time by the vote of at
least seventy five percent of the Board. The relevant member will be entitled to make
representations in writing in connection with the voting on such resolution.
2.4
The Public Interest Committee will meet a minimum of four times a year (in person) and at other
times in the year as considered appropriate by the Public Interest Committee Chair.
2.5
The Public Interest Committee will normally meet together with the Audit and Risk Committee
given the commonality of interests. In such meetings the Public Interest Committee will form
their own separate conclusions on matters raised and may adjourn for private deliberations if
thought necessary. In advance of such meeting the Public Interest Committee will meet by itself
to discuss matters relating to its own remit and whatever else the Public Interest Committee
Chair believes appropriate.
2.6
Members of the Public Interest Committee may attend any annual Board strategy meeting
and/or receive an annual presentation from the Chair in order to understand, and if appropriate,
comment on the LLP’s commercial objectives.
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Chair of Public Interest Committee
The chair at meetings of the Public Interest Committee (the ‘Public Interest Committee Chair’) will
be appointed by the Chair and approved by the Board.
Document Classification – KPMG Public
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Quorum
4.1
The quorum for any meeting of the Public Interest Committee shall be two members of the
Public Interest Committee.
4.2
The members of the Public Interest Committee may participate in a meeting of the Public
Interest Committee from separate locations by means of conference telephone or other
communication equipment which allows those participating to hear each other, and shall be
entitled to vote or be counted in the quorum accordingly.
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Public Interest Committee procedures
5.1
The meetings of the Public Interest Committee are convened by its Chair.
5.2
The Chair of the Public Interest Committee can request any papers relevant to its remit subject
to professional confidentiality requirements as might apply to specific client matters as noted
above. Similarly the Chair can request partners or professionals of KPMG LLP to attend its
meetings as it deems necessary.
5.3
On appointment and whenever circumstances change, members of the Committee will supply
the Secretary with a note of any external interests that might give rise to a conflict of interest
including, but not limited to, positions held at audit clients of KPMG LLP and its related entities.
Should there be any discussion relating to such matters then the relevant member will take
steps to recuse themselves.
5.4
The Committee may request specific reports on any matter relevant to its remit. Such requests
will normally be made to the Senior Partner or Head of Quality and Risk.
5.5
Any Public Interest Committee member may commission external legal advice at the expense of
the Group if necessary to fulfil his/her remit. If a member is contemplating requesting such
advice then they should in the first instance discuss it with the Chair of the Public Interest
Committee and the Senior Partner.
5.6 If an individual member of the Public Interest Committee has a fundamental disagreement
regarding the Group’s position on matters concerned with the Committee’s remit then he/she
will raise it with the Committee. If the Committee does not support the member’s views,
then that member may report the matter to the Senior Partner. If the issue is still not
resolved, the Senior Partner will report the matter to the Board. In the event that an
individual member resigns, then this will be reported publically as will the view that the
remaining Committee members are taking in respect of the Group’s position on public
interest matters.
5.7
If the Public Interest Committee overall has a fundamental disagreement with the Group’s
position on matters concerned with its remit, the Chair will report on the matter to the Senior
Partner. If the Chair is not able resolve the issue to his/her satisfaction then the Public Interest
Committee will present a written report to the Board and the Chair and/or any Public Interest
Committee members may appear at the relevant Board meeting to explain the nature of the
disagreement. In the event the matter is still not resolved the Public Interest Committee will
submit a written report to the members of KPMG LLP together with a draft proposal to resolve
the situation on which a Members vote will be called. If the Members do not agree to resolve
the matter and the Public Interest Committee still has a fundamental disagreement with the
Group’s position then in the event of its members resigning, the Group will report these
resignations publically.
5.8
The Chair of the Public Interest Committee will be available to the Head of Quality and Risk
Management to discuss any matters of concern in relation to professional risk, in the widest
sense, should this be considered necessary by that individual.
Document Classification – KPMG Public
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5.9
The Secretary of the Public Interest Committee shall attend to take the minutes of the meeting
and provide appropriate support to the Chair and the Committee members.
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Public Interest Committee Resolutions
6.1
The Public Interest Committee shall reach decisions by a simple majority of those voting on the
issue in question. If the numbers of votes for and against a certain proposal are equal, the Public
Interest Committee Chair shall have a casting vote.
6.2
Any resolution evidenced in writing or by electronic or voice recognition means, by such
member or members of the Public Interest Committee as would have been necessary to pass
such resolution had all members of the Public Interest Committee been present at a meeting to
consider such resolution, shall be valid and effective as if it had been passed at a meeting of the
Public Interest Committee duly convened and held, provided that notice and details of the
proposed resolution have been given in advance to each member of the Public Interest
Committee.
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Matters dealt with by the Public Interest Committee
7.1
The Public Interest Committee is responsible for the following matters, or as delegated
by the Board:
7.1.1 To receive and provide comment/recommendations relevant to professional risk management
and the public interest on presentations on the key elements of the LLP’s business. In particular
consider and where appropriate provide comment/recommendations on:
(i)
The LLP’s key policies and procedures relating to professional risk management, quality
and ethics and independence (including an assessment of their robustness,
appropriateness and effectiveness);
(ii)
The annual professional risk management business plan;
(iii)
The outcome of the various risk and independence compliance programmes operating
within the LLP (including the annual KPMG International QPR and Risk Compliance
Programme) and the proposed remedial actions;
(iv)
Any significant risk management judgement calls made within the LLP;
(v)
The status of, and significant findings from, any regulatory inspections or regulatory
violations that have occurred in the period;
(vi)
An assessment of the adequacy of the levels of PII and other insurance cover maintained
for the LLP (including through both KPMG International’s captive insurer and any local
insurance arrangements);
(vii) An annual summary from the money laundering reporting officer on any financial crime;
(viii) The position on any significant claims and circumstances and how the associated ‘lessons
learned’ have been fed back into KPMG UK;
(ix)
A summary of matters reported to LLP’s whistle-blowing hotlines and conduct of
investigations into any significant matters reported to the hotline;
(x)
The LLP’s commercial risk appetite;
(xi)
Internal audit reports related to professional risk management; and
(xii) The LLP’s financial position and risk.
7.1.2 Consider and where appropriate provide comment/recommendations on LLP’s people
management policies and procedures. This will include periodically meeting with the head of
people and/or his/her delegates.
Document Classification – KPMG Public
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7.1.3 Receive an annual report detailing how the LLP has met its various obligations under the Audit
Firm Governance Code.
7.1.4 Provide comment on the LLP’s Annual Report and Transparency Report and confirm to the
Board whether they appropriately reflect the Public Interest Committee’s activities and their
understanding of the LLP’s professional risk management.
7.1.5 Attend periodic meetings with representatives of the Financial Reporting Council (and, if
required, other regulatory authorities); and
7.1.6 Attend (as individuals) periodic meetings with representatives of shareholders of
public interest entities.
Changes to the Public Interest Committee duties are subject to approval by the Board.
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Notice of meetings
The Public Interest Committee meeting agenda and papers should be circulated at least one week
prior to the Public Interest Committee meeting.
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Documentation, Communication and Reporting
9.1
Minutes of the Public Interest Committee are to be kept and filed by the Public Interest
Committee secretary and held at the registered office.
9.2
The Public Interest Committee reports to the Board, and to the partners at the annual partners’
meeting for reporting and statutory matters.
The information contained herein is of a general nature and is not intended to address the circumstances of any particular individual or entity.
Although we endeavour to provide accurate and timely information, there can be no guarantee that such information is accurate as of the date it
is received or that it will continue to be accurate in the future. No one should act on such information without appropriate professional advice
after a thorough examination of the particular situation.
© 2016 KPMG LLP, a UK limited liability partnership and a member firm of the KPMG network of independent member firms affiliated with
KPMG International Cooperative (“KPMG International”), a Swiss entity. All rights reserved.
Document Classification – KPMG Public
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