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Terms of Reference of the Supervisory Board

08 Jun 2021

These Terms of Reference should be read in conjunction with the Members’ Agreement. In the event of any inconsistency or contradiction, the Members’ Agreement shall prevail.

1. Purpose and Authority

The SB has authority under the Firm’s Members’ Agreement to review, challenge and give guidance to the Management Board on matters which the SB in its sole discretion from time to time considers to be of concern, or potential concern, to the partners, having regard to the interests and wellbeing of the Firm and the partners as a whole.

The SB may investigate any activity within these Terms of Reference and, within its scope of responsibilities in the Member’s Agreement, to seek any information it requires and to ensure the attendance of management representatives at meetings as appropriate.

The SB has the authority to obtain outside legal or independent professional advice. The advisers may attend meetings as necessary and the cost of the advisers shall be borne by the Firm.

2. Membership

The membership of the SB is as follows:

  • Chris Burns, Chair (Global Board member and Audit Partner)
  • Simon Ager (Tax Partner)
  • Glen Babcock (Deals Partner)
  • Kevin Ellis (Firm’s Senior Partner, ex officio)
  • Imran Farooqi (Deals Partner)
  • Karen Finlayson (Risk Partner)
  • Sandie Grimshaw (Consulting Partner)
  • David Kenmir (Risk Partner)
  • Andy Key (Consulting Partner)
  • Duncan Skailes (Global Board member and Deals Partner, ex officio)
  • Dave Walters (Audit Partner)
  • Lorna Ward (Consulting Partner)
  • Kenny Wilson (Audit Partner)
  • Kate Wolstenholme (Audit Partner)

The SB comprises of 12 members elected by partners in the Firm, the Firm’s Senior Partner ex officio (or acting Firm senior Partner ex officio), and partners who have been elected to the Board of PricewaterhouseCoopers International Limited (“PwCI”, or the “Global Board”). Those elected to the Global Board are ex officio SB members and are deemed to be elected members in certain circumstances under the Members’ Agreement (Schedule 5, clause 2.3).

The members of the SB are elected by the partners of the Firm for a term of four years, with six of the twelve seats being subject to election every two years.

  • There is no limit to the number of terms that an SB member can be elected for, save only that no Elected Member will serve for a period of more than four years without submitting themselves for re-election; and
  • Ex officio members continue as SB members while fulfilling the relevant role

Only members of the SB have the right to attend SB meetings. Other individuals may be invited to attend for part or all of any SB meeting, as and when appropriate.

3. Chair and Deputy Chair

The Chair of the SB shall be elected by the SB members (other than the Firm’s Senior Partner) from amongst their number for a term of not exceeding two years, but may offer themselves for re-election for additional terms. No person will be Chair for more than six years in aggregate.

The Firm’s Senior Partner is ineligible for election as SB Chair.

The Chair of the SB will determine and recommend to the SB whether there will be a Deputy Chair of the SB and, if so, the arrangements for appointing them. A Deputy Chair of the SB will be appointed by the elected members (being those SB members elected by the partners as well as ex officio SB members that are also Board members of PwCI) for a term not exceeding two years, but may offer themselves for re-appointment for additional terms. No person will be Deputy Chair for more than six years in aggregate.

In the absence of the Chair or Deputy Chair at any SB meeting, the members present shall appoint a member in attendance as Chair of the meeting.

4. Secretary

The Secretary to the SB is Philip Patterson, a member of the Board Secretariat. In the absence of the Secretary, another member of the Board Secretariat of the Firm may act as Secretary of the SB.

The Secretary will ensure that the SB receives information and papers in a timely manner to enable full and proper consideration to be given to matters, and will be responsible for maintaining accurate records of meetings.

5. Quorum

The quorum shall be eight members of the SB for any meeting.

6. Decisions of the SB

A decision of the SB taken by vote at a meeting shall require a Simple Majority of those present in order to be passed. The chair of any such meeting will have the casting vote.

7. Frequency of Meetings

The Chair of the SB determines a rolling programme of ordinary meetings, which must provide for at least four ordinary meetings in each calendar year.

8. Notice of Meetings

Meetings of the SB will be called by the Secretary at the request of the Chair, or by any of the SB members, with notice of such meetings being provided at the earliest opportunity.

Unless otherwise agreed, notice of each SB meeting confirming the venue, time and date together with an agenda of items to be discussed, shall be forwarded to each SB member in a timely manner. Supporting papers shall be sent to the SB members and other attendees, as appropriate, at the same time.

A special SB meeting may be convened by giving a minimum of two working days notice.

9. Minutes of SB Meetings

The Secretary will minute the proceedings and decisions of all SB meetings, including recording the names of those present and in attendance.

Draft minutes of SB meetings will be circulated first to the Chair, and then to all other SB members for review.

Once approved, minutes will be shared with the Firm’s Management Board and Public Interest Body, unless it would be inappropriate to do so.

10. Duties, Powers and Responsibilities

10.1 General powers

The SB is responsible for matters which the SB considers to be of concern, or potential concern, to the partners having regard to the interest and wellbeing of the Firm and the partners as a whole including national, legal, regulatory and fiscal requirements, implementation of global policies and the arrangements for effective communications between the partners and the Firm’s management. Other SB powers and responsibilities include:

  • to conduct, oversee and, as necessary manage the election process for the Alliance Territory Senior Partner, including specifically setting the framework and procedures (Schedule 5, Clause 29.18 of the Firm’s Members’ Agreement);
  • to determine how any meeting or ballot of the partners is to be called and conducted (Clauses 4.3, 4.7 and 4.17 of the Firm’s Members’ Agreement);
  • to appoint the Special Voting Right Holder, where required (Clause 4.14 of the Firm’s Members’ Agreement);
  • to make arrangements for filing a casual SB vacancy, where necessary (Clause 4.21 of the Firm’s Members’ Agreement);
  • to initiate the process for a ballot for the removal from office of the Alliance Senior Partner (Schedule 5, Clause 29.19 of the Firm’s Members’ Agreement);
  • to review and challenge the Firm’s strategy within the context of the Firm’s Senior Partner manifesto (Schedule 5, Clause 27, of the Firm’s Members’ Agreement);
  • to review and challenge how the Firm manages risk within the context of the Firm’s strategy;
  • to approve the statutory accounts on behalf of the members of the Firm (Clause 8.2 of the Firm’s Members’ Agreement) and adopt the accounts on behalf of PricewaterhouseCoopers United Kingdom Partnership;
  • to approve any statement made by the Firm under the Modern Slavery Act 2015 (Schedule 5, Clause 29.7 of the Firm’s Members’ Agreement);
  • to test in such manner as from time to time it thinks fit, the reactions of a wider body of partners to particular matters and/or issues and/or proposals either upon the SB’s own initiative or at the request of the Firm’s Senior Partner, the Management Board or other individuals (Schedule 5, Clause 29.14 of the Firm’s Members’ Agreement)
  • to seek an effective dialogue between the SB and both the Global Board and the Alliance Leadership Team, to facilitate effective working relationships (Schedule 5, Clause 29.15 of the Firm’s Members’ Agreement);
  • to seek to ensure that there is at all times provision for effective consultation on behalf of PwCI with partners and associates (an associate is defined in the Firm’s Members’ Agreement as being “any partner in a Related Entity or, if the Related Entity is a limited liability partnership, any member of such Related Entity”) and for responding to such enquiries as the board of PwCI may make to identify matters of significant concern to partners and associates (Schedule 5, Clause 29.16 of the Firm’s Members’ Agreement);
  • to consider guidance offered and recommendations made by the Alliance Leadership Team and/or the Alliance Supervisory Board (Schedule 5, Clause 29.17 of the Firm’s Members’ Agreement);
  • to approve, if thought fit, transactions, commitments and arrangements outside the ordinary course of business of the Firm (Schedule 4, Clause 7 of the Firm’s Members’ Agreement); and
  • to refer to a decision of the partners, by a special majority, any matter involving, in the opinion of the SB, a significant change in the form or direction of the Firm and determine the form of resolutions (Clause 17.1 of the Firm’s Members’ Agreement).

10.2 Financial and Operational Matters

The SB has the authority:

  • to approve the statutory accounts of the Firm, drawn up in accordance with the accounting principles determined by the Executive Board (under delegated authority from the Management Board) with the approval of the SB, on behalf of the members of the Firm (Clause 8.2 of the Firm’s Members’ Agreement);
  • to adopt the accounts drawn up in accordance with the accounting principles determined by the EB (under delegated authority from the MB) of PricewaterhouseCoopers United Kingdom Partnership;
  • to approve the Designated Members’ proposed choice of auditor for the LLP (including setting the terms and conditions of such appointments) (Schedule 5, Clause 29.6 of the Firm’s Members’ Agreement);
  • to approve changes to the capital requirements and drawing arrangements for partners as well as determining whether remuneration policies have been appropriately applied to partners and take into consideration the views of the Audit Oversight Body (a Committee of the Public Interest Body) and the Audit Partner Remuneration and Admissions Committee (a Committee of the Audit Oversight Body) in respect of the remuneration relating to Audit partners (Schedule 5, Clauses 29.8 and 29.9 of the Firm’s Members’ Agreement); and
  • to approve the procedures for calculating each partner’s share of profits or losses and the equity interest of each partner (Clause 8.4 of the Firm’s Members’ Agreement).

10.3. Partner related Matters’

The SB has the authority:

  • to approve the imposition of disciplinary penalties and other sanctions on partners as recommended to them by the Management Board, Executive Board or Partner Matters Committee (being committees of the Management Board) (Clause 14.25 of the Firm’s Members’ Agreement);
  • to approve the nomination of, and recommendation to partners of, candidates for partner (Clause 9 and Schedule 5, Clause 29.10 of the Firm’s Members’ Agreement);
  • to approve the terms and conditions of the readmission of partners who retire from the Firm to take up work for any person or partnership other than the Firm (Clause 11.8.1 and Schedule 5, Clause 29.13 of the Firm’s Members’ Agreement);
  • to constitute an appeals panel (excluding Partner Affairs Committee members) as required to hear appeals by partners against notices requiring them to retire (Schedule 5, Clause 29.12 of the Firm’s Members’ Agreement);
  •  to approve the Tax and Other Amounts policy (Clause 8.7 of the Firm’s Members’ Agreement);
  • to set up a Country Admissions Committee (“CAD”) in accordance with the Firm’s Network Guidelines;
  • to determine procedures for the appointment of the Pensions Management Board and to appoint each of the members of the Pensions Management Board in accordance with such procedures;
  • to approve proposals for changes to the Members’ Agreement (Schedule 5, Clause 29.21 of the Firm’s Members’ Agreement);
  •  to consider an appeal, made in accordance with clause 12.2 of the Members’ Agreement, from a suspended partner against a decision by the Management Board to suspend such partner; and
  • to approve the reduction of any partners’ share of profits as recommended to the Committee by the Management Board (Clause 12.6 of the Firm’s Members’ Agreement)

The SB delegates authority to the Partner Affairs Committee (a Committee of the SB) to:

  • to approve any particular Notice to Retire and the application of the processes in connection with any particular Notice to Retire (Schedule 5, Clause 29.11 of the Firm’s Members’ Agreement); and
  • to review and approve, as recommended to the Partner Affairs Committee by the Management Board, partners working beyond their Normal Retirement Date (Clause 11.9 of the Firm’s Members’ Agreement).

10.4 Operational Matters

The Firm’s Senior Partner or Management Board must consult the SB before putting any matter to the partners for approval or determination by a resolution or ballot.

Subject to limited exceptions ((i) inconsistent with the Members’ Agreement, (ii) vexatious, defamatory or otherwise unlawful; or (iii) to be substantially the same as a matter which has been considered by the Members or so referred within the six months preceding the lodgement of the relevant written instrument) as described in Clause 4.7, of the Members’ Agreement, at least 10% of the partners in number may require the SB to put any matter to the partners for approval or determination by a resolution or ballot.

The SB is also required to consider a matter if requested to do so by not less than 10% of the partners in number.

11. Appointment of Key Roles

The Chair of the SB is responsible for nominating (and replacing at any time) key roles from amongst its members, and such appointments will be approved by the SB, specifically:

  1. Deputy Chair of the SB;
  2. SB representative(s) of the Public Interest Body;
  3. SB representative of the Audit Oversight Body;
  4. Two SB representative(s) of the Board of PwC (Middle East Group) Limited;
  5. Two members of the SB to become members of the Alliance Supervisory Board, in addition to the SB Chair (Schedule 5, Clause 29.20 of the Firm’s Members’ Agreement)
  6. Channel Islands Protector;
  7. Chair of Country Admissions Committee;
  8. Special Voting Right Holder (where the Chair of the SB is not audit qualified);
  9. SB partner engagement and communications leader;
  10. Composition of the SB Committees;
  11. SB liaison for the Pensions Management Board;
  12. SB representative on the Pensions Project SteerCo; and
  13. SB representative on the Partner Savings Committee.

The SB is also responsible for approving the Independent Non Executives appointed to the Public Interest Body from candidates nominated by the Firm’s Senior Partner(Schedule 6, Clause 1.1 of the Firm’s Members’ Agreement).

Approved by the SB on: 8 June 2021

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UK Secretariat

London, PwC United Kingdom

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