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POLB 13(6")
POLB 13/47-13/50
POST OFFICE LIMITED
(Company no. 2154540)
(the ‘Company’)
Minutes of a Board meeting held on 24 June 2013
Held by conference call
Present:
Alice Perkins Chairman
Neil McCausland Senior Independent Director
Tim Franklin Non-Executive Director 1
Virginia Holmes Non-Executive Director I
Alasdair Marnoch Non-Executive Director
Susannah Storey Non-Executive Director
Paula Vennells Chief Executive Officer
Chris Day Chief Financial Officer
In Attendance:
Alwen Lyons pail Secretary
Mark Davies Commugications Director
Sue Barton Strate: rs I
Kevin Gillilan e aC Cc
POLB 13/47 INTRODUCTION
(a) A quorum being present, the Chairman opened the meeting.
POLB 13/48 2013/20 STRATEGIC PLAN — CURRENT STATUS
(a) The Board received an update on the progress being made to
obtain Shareholder approval for the 2013/2020 Strategic Plan (the
Strategic Plan). The Board were informed that KPMG’s formal
report was due for submission that day and that the focus was now
on engaging with the Department for Business, Innovation and
Skills (BIS) on outstanding issues.
(b) The Board discussed the negotiating mandate, agreed at the May
Board, and focussing on the key topics which had been circulated
' in advance of the meeting. They discussed amendments to the
; mandate in relation to the Government's desire to ensure NFSP
' support for the Strategic plan; access points; the future of the
NFSP and mutualisation.
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(c) The Board agreed that they would prefer any additional money to
be funded by BIS but accepted that the business may need to find
part of the additional investment, but only to the level agreed in the
original mandate They stressed that any increase in compensation
could not increase the long-term cost base of the business and that
the NFSP would need to show active support for Network
Transformation.
(d) The Board would require a Letter of Understanding to lay out the
NFSP commitments to get the maximum possible benefit for any
additional investment.
(e) The Board clarified the assumptions in the plan mandate:
4. Any additional funding for NFSP support should be provided
by BIS
2. The Business could commit to growing the Network by 2000
access points by 2020
3. Include the Future of the NFSP ‘low down’ in the
memorandum/ commitment letter with commitments kept to
a minimum
4. Mutualisation timeline as agreed at the away day to be re-
1 with BIS
culated to the Boag@ before it is sha
required from the
y mittee tS move to a position
1. Post Office funding up to a maximum of £40m in 2015/16
and £40m in 2016/17
2. Commitment to a target for additional access points before
2020
(g) Any changes beyond these assumptions and mandate would need
to return to the Board
(h) The original and amended mandates are show as an Appendix to
these minutes.
(i) I The Chairman summarised that the Board position. They were
reluctant to offer more money for compensation and would like to
stick the original strategic plan. If additional Post Office investment
became unavoidable the Board wanted this kept to a minimum
within the mandate agreed with the maximum benefit possible and
the NFSP specific agreement that they would support the process.
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POLB 13/49 NETWORK TRANSFORMATION PROGRAMME
(a) The Board discussed the Business’s capacity to deliver the
scheduled approach to Network Transformation and whether it
could commit to a target of conversions completed for this year, to
give the Board and the Minister more confidence in the delivery of
both contracts signed and branches opened.
(b) Kevin Gilliland explained the danger in pushing sub postmasters to
open too quickly and achieving a suboptimal result. However he
recognised the need to move with pace and was expecting the vast
majority of contracts signed last year to be open by November. The
Board suggested a split of the investment money to encourage the
ACTION: sub postmaster to complete the project more quickly. Kevin
Kevin Gilliland Gilliland was asked to consider different ways to incentivise the sup
postmasters to try to reduce the time from contract signature to the
(c) branch being open.
The Board would have preferred a formal target for branch
openings for the financial year 2013/14 but accepted the difficulty of
setting such a target. Kevin Gilliland and the CFO were asked to
ACTION: Kevi presentijthe NT scorecard@{including valuejfor money) to the
Gilliland! CF e a C
POLB 13/50 cL
There being no further business the meeting was declared closed
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POLB 13(7")
POLB 13/51-13/55
POST OFFICE LIMITED
(Company no. 2154540)
(the ‘Company’)
Minutes of a Board meeting held on 1° July 2013
held by conference call
Present:
Alice Perkins Chairman
Neil McCausland Senior Independent Director
Tim Franklin Non-Executive Director
Virginia Holmes Non-Executive Director
Alasdair Marnoch Non-Executive Director
Susannah Storey Non-Executive Director
Paula Vennells Chief Executive Officer
Chris Day Chief Financial Officer
In Attendance:
Alwen Lyons Company Secretary
Mark Davies Communications Director
Sue Barton Strategy Director
Kevin Gilliland Network and Sales Director
POLB 13/51 INTRODUCTION
(a) A quorum being present, the Chairman opened the meeting.
POLB 13/52 HORIZON
(a) The CEO apologised for the short notice in keeping the Board
updated but explained that issues had arisen over the last couple of
days. She gave an update on the Horizon review which was being
undertaken by Second Sight and their interim report which was to
be presented at a meeting of MPs on the 8" July. The investigation
to date had found no systemic issues with the Horizon computer
system but had highlighted areas for improvement in support areas
such as training.
(b) The CEO explained that the Horizon, like any large computer
system, would occasionally have anomalies and two were know of
over recent years. The Business had dealt with these anomalies to
ensure no sub postmaster was out of pocket and these anomalies
had not affected any of the cases which Second Sight had
reviewed. Second Sight had been told of these anomalies and they
would include them in their report.
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(c) The CEO was concerned that the report from the independent
forensic accountants was not as factual as expected and could lead
to loose language at the MP meeting.
ACTION: The Board asked the Business to challenge Second Sight .to
CEO/ (d) ensure changes were made to the report where possible and asked
Mark Davies the Business to prepare their communication to combat any
inaccuracies.
oe POLB 13/53
MUTUALISATION TIMELINE
Sue Barton reported that all the changes discussed at the Board
(a) Awayday had been incorporated into the mutualisation timeline and
that it would clearly show that the strategic plan milestones referred
to the year-end dates for 2013-2020. It had been agreed with BIS I
that the report would timeline would be an internal document not for
publication
POLB 13/54
2013/20 STRATEGIC PLAN - CURRENT STATUS
(a) Sue Barton gave an update on the NFSP sessions underway I
where she and Kevin Gilliland had shared the strategic plan. It was i
clear that their main concern was the enhanced compensation
although the NFSP understood that there was no headroom in the
plan for additional payments.
The Chairman explained that the Secretary of State had agreed to
(b) a meeting and was now getting involved in the process and that
she ary the CEO were megting him and thegMinister on the 11" I
Ji t d ich but wants the t
e@ ing t a ‘cli as) sub postmasters to I
fe G) PI r ment. Sue Barton j
explained that this would not persuade Sub postmasters to move
until the date of the ‘cliff as they would want to retain their Core
Tier Payment for as long as possible.
The Board discussed the need to move at pace to defend the I
(c) position especially in the mails market, and whether the move to
network expansion could be the solution. Sue Barton explained that
although the advantage of Network expansion was speed and cost,
the increasing the network could cannibalise the work from existing i
branches and make them even less viable. i
Sue Barton was asked to develop an option which incorporated the
ACTION: Sue Barton (qd) idea of a ‘cliff’ as suggested by the Secretary of State but ensuring
that there were levers to ensure sub postmasters were incentives
to leave early. This was to be presented to the Board before the \
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meeting with SoS on the 11" July
POLB 13/55 OnIOS&E
Thkeechbéiggnodtinitibebbesinessitbemeettigquaascttaddred closed
Redacted
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POLB 13(8"")
POLB 13/56-13/58
POST OFFICE LIMITED
(Company no. 2154540)
(the ‘Company’)
Minutes of a Board meeting held on 9" July 2013
held by conference call
Present:
Alice Perkins Chairman
Neil McCausland Senior Independent Director
Tim Franklin Non-Executive Director 1
Virginia Holmes Non-Executive Director I
Alasdair Marnoch Non-Executive Director '
Susannah Storey Non-Executive Director
Paula Vennells Chief Executive Officer
In Attendance:
Alwen Lyons Company Secretary
Mark Davies sommunications Director
Sue Barton Strategy Director
Kevin “R Networkgand a é
POLB 13/56 e Cte
(a) A quorum being present, the Chairman opened the meeting.
POLB 13/57 2013/20 STRATEGIC PLAN —- CURRENT STATUS
(a) Sue Barton reported to the Board that after further negotiations it I
was clear that the NFSP would not support a mandated approach
to conversion. She explained the current discussions taking place,
which sought to secure NFSP support for a mandated exit
approach.
() This scenario, a semi-compulsory approach could deliver the same
outcome as the strategic plan albeit at a higher cost.
The Mandated Exit comprised, incentive conversion with enhanced
compensation and short term protection of Core Tier Payment, but
with a ‘cliff’ where conversion becomes mandatory towards the end
of 15/16
Sue Barton explained that comparing the profile of the two options,
(C) highlights a small shortfall in the number of conversions through to
April 2018, however the Business believed this could be addressed
through network expansion activity.
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(d) The Board asked for a summary page to explain the mandated exit I
ACTION: approach and its effect on investment cost and timing. This
Sue Barton summary is shows as An appendix to these minutes.
@ The Board agreed that the Business should present two
alternatives to the Secretary of State and the Minister, at their
meeting on the 11" July.
1. The preferred Board option as laid out in the strategic plan,
with enhanced compensation.
2. A second approach of mandatory exit including the ‘carrot
and cliff’ for conversion as discussed.
The presentation should be as short as possible but with two slides
articulating the different outcome for cost and timing and stressing
the need for a solution which enables the Transformation to be
completed at pace, because of the rapid changes in the market.
POLB 13/58 CLOSE
There being no further business the meeting was closed
Redacted
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POLB 13(6")
POLB 13/47-13/63
POST OFFICE LIMITED
(Company no. 2154540)
(the ‘Company’)
Minutes of a Board meeting held on 16 July 2013
at 148 Old Street, London EC1V 9HQ
Present:
Alice Perkins Chairman
Tim Franklin Non-Executive Director i
Virginia Holmes Non-Executive Director I
Alasdair Marnoch Non-Executive Director
Susannah Storey Non-Executive Director
Paula Vennells Chief Executive Officer
Chris Day Chief Financial Officer
Apologies for Absence:
Neil McCausland Senior Independent Director
In Attendances
Alwen Lyons os
Sue Barton trateGyED i ite /: 3)
Lesley Sewell Chief Information Officer (13/49 only)
Nick Kennett Director of Financial Services (13/52)
POLB 13/47 INTRODUCTION
(a) A quorum being present, the Chairman opened the meeting.
POLB 13/48 BOARD EFFECTIVENESS REVIEW
(a) The Board received the report of the Board Effectiveness review
carried out in June/July 2013.
(b) The Chairman thanked the Board for their time and explained the
process for one to one feedback. The Board discussed the balance
between challenge, rigour and support and the CEO stressed that
the Business expected to be challenged. She would be
disappointed if the Board did not support through challenge while
being open to the Executives challenging back where they thought
appropriate.
(c) The Board discussed the papers received from the Executive
Committee members and agreed that in future the content of the
papers would not be presented at the Board meeting so as to free
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up time for discussion. The papers needed to be clear, not overly
optimistic, and commercially focussed so questions of fact would
ACTION: not be necessary. They should also arrive in good time. The
The Board Chairman asked the Board to contact the ExCo member
responsible for a paper before the meeting if they were unclear or
didn’t have the necessary detail. The Board also asked for earlier
warning when risks and issues arise to ensure that they were not
‘blindsided’.
(d) The Board thought that it would be valuable to have some
discussions with the minimum of paperwork where the NEDs
shared their own thinking rather than reacting to the Executives’
proposals e.g. on strategic risk.
(e) The Board discussed the use of their time and agreed that the
frequency and length of Board meetings was right and where
possible Sub Committees should not be held on the same day as
Board meetings.
(f) I The focus on risks at the September meeting could help form the
forward agendas for the following year. It was also agreed that the
Board uld help with @takeholder engagement, with more
ler. The Chairman
rl th: turn to a meeting in
th im) th ie i Ri idenberg, Chairman
of UKFI and formerly with UBS where he oversaw the banks’
relationships with HM Treasury, to the November Board.
(g) The Board asked for more exposure to the network and expressed
a need to understand the economics of the different network
models. The Company Secretary was asked to organise individual
branch visits for NEDs if required. The Board agreed that a future
ACTION: meeting would be held at the Camden Branch including a
Company Secretary discussion with the Branch Manager about the economics of
running a Crown Office.
ACTION: (h) The CFO was asked to produce a piece of analysis to explain the
CFO economics of the network models and set up a workshop for those
NEDs who would find it helpful.
(i) I The Board discussed the use of advisors and the CFO was asked
ACTION: to provide a paper highlighting the processes in place for
CFO monitoring the use of advisors, procuring advisors and negotiating
their terms.
(j) I The Board's relationship with the ExCo and the SLT was discussed
and it was agreed that Board members would be advised of the
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ACTION: dates of SLT Quarterly Business Updates and they would be
Company Secretary welcome if they wanted to attend but no other formal SLT
engagement would be put in place.
(k) The Board noted the Board Effectiveness Review and agreed the
actions in the paper along with:
« the Board would continue with 2 away days a year
« the Board would be offered opportunities to attend NT
openings or meetings with stakeholders if they were
available
ACTION: «the production of a forward look for future agendas
Company Secretary ¢ the addition of an index for the Reading Room and a log of
decisions taken at the end of the Board minutes.
POLB 13/49 IT SUPPLY CHAIN PROCUREMENT ACTIVITY
(a) Sue Barton, Strategy Director, and Lesley Sewell, Chief Information
Officer joined the meeting.
IT&C Transformation Programme
vt n, rent status of the
Servic I id a Strategic Data
Ci . r Cea it po: lution would enable
I further outsourcing in the future. Lesley Sewell explained that the
i change would reduce the headcount by 50% whilst giving a
foundation for further outsourcing and enable the Business to move
to more stable suppliers. The Board questioned the timing and
\ whether the SI could be in place before the sub-contracts are
i awarded. Lesley Sewell explained that the Business was being
pushed by RMG separation deadlines and this was the reason that
the SI and sub-contractor had to be done concurrently.
(c) The Board would be asked to approve the award of contracts for
the Data Centre and Service Integrator/Strategic Data Centre to the
Post Office’s selected bidders at the September 2013 meeting. It
was noted that the Service Integrator award would also require
approval from the Shareholder Executive.
Transitional Support Services with Fujitsu
(d) Lesley Sewell presented a paper on the Transitional Support
I Services supplied by Fujitsu. She explained that there were few
options apart from remaining with Fujitsu in the short term.
(e) The CEO flagged two risks to the Board - the first around RMG and
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the preparedness for separation and the second the Horizon risk
around Fujitsu. She explained that the legacy contract had to be
normalised through proper public procurement but that there were
short term issues which were difficult to resolve such as IP,
ownership of which was mixed between the two businesses.
(f) Before it could make a decision on the extension of the contract for
two years the Board asked for more detail on the economics of the
deal being negotiated with Fujitsu, the changes from the current
contract, and its impact on the Strategic plan numbers. Lesley
Sewell and CFO were asked to circulate a paper seeking
ACTION: agreement by correspondence once the Board members were
CFOlLesley Sewell comfortable.
POLB 13/50 PROGRESS REPORT ON GOVERNMENT FUNDING AND
STRATEGIC PLAN
(a) The Board received a verbal update from Sue Barton and the CEO
on the progress with the Government funding and Strategic Plan.
The CEO explained that the meeting with Secretary of State (SOS)
and Minister had enabled the Business to explain that inaction or
delay was not an option. The feeling was that_if the Minister would
suppoffmandated exit the SOS would also dg@so.
t! r I fang he Minister realised
tl cl i rategic plan was still
i the Board's and the Business’s preferred option. She explained that
the alternative approach, which the Business had considered after
pressure from the NFSP and the shareholder, could have some
benefits. Ministers would need to be advised as to whether to
alternative approach has the Board’s backing before their meeting
with officials the following day.
(c) Sue Barton explained the alternative approach as set out in
appendix A of these minutes. The Board agreed to the following
recommendations provided they stayed within the Board mandate
and were positioned as a last resort:
1. To continue to position £218m as the amount necessary to
deliver a mandated exit option
2. That no deferral be offered as part of the solution, as this
would leave the Business exposed in the later years of the
plan and put breakeven back by a year.
3. To position the incremental cost of this alternative option as
investment which BIS would need to fund
1 (d) The Board agreed to the principles of the alternative approach
I subject to the conditions that:
e There is a cliff within the alternative solution. This is
transparent, clearly communicated both at a national and
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individual sub-postmaster level, backed by Government.
Individual letters would be sent out to sub-postmasters
e¢ Cost of the option is covered by additional Government
funding. A shortfall can be covered by the business within
the agreed mandate
« NFSP support must be clearly set out in a MOU and must
include agreement to support openly and unconditionally
e Must have a mandate to exit sub-postmasters.
(©) The CFO confirmed that he remained comfortable that the
headroom of £40m in 2015/16 and 2016/17 would be available and
therefore supported the mandate.
(f) Sue Barton would write to BIS setting out the alternative approach
as agreed by the Board. The Chairman offered to write to the SOS
at an appropriate time to explain that while the Board understood
ACTION: the political difficulties, this alternative was not our preferred
Sue Barton approach and the risks it brought to the business.
(9) The Board discussed the protection of community offices and Sue
Barton explained the conflict for the NFSP as some of their
members who run offices which will be designated ‘community’
would be restricted from exiting. This was still being worked
through with the NFSP.
T x king on the proof of
k exténsit although this was
po raetiveth al lependencies which
i needed to be understood and it would be the last quarter of the
year before the Business could sign up to any targets.
(i) The Board asked whether the Business could sign up to a
conversions target by 2014/15, either a number or percentage of
i branches converted. Sue Barton said it would be difficult to suggest
I a target without NFSP co-operation to the programme. The NFSP
were calling a special conference to agree any proposal so any
agreement was likely to be at the beginning of September.
() The Board agreed to weekly Board calls over the summer whilst
ACTION: the negotiation continues and requested a paper 24 hours before
Company Secretary any call setting out an update and the substance of any discussion.
. (k) The Chairman asked for a note setting out the expected timeline
ACTION
. and milestones over the next two months.
Sue Barton
(!) The Chairman thanked Sue Barton for some excellent work and
Sue Barton left the meeting
1 (mM) The Chairman asked the CEO to consider additional support for the
i Strategy Director during the negotiations. The CEO explained that
1 things had been moving very quickly but accepted that the
Business needed to be better at anticipating and ‘horizon-
scanning’.
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POLB 13/51 HORIZON UPDATE
(a) The CEO explained that although the Second Sight report had
been challenging it had highlighted some positive things as well as
improvement opportunities. The Business had been praised in
Parliament for setting up the independent review; the
proportionality of the tiny number of cases had been emphasised;
and no systemic issues had been found with the Horizon computer
system. However there were cultural issues which had to be
addressed to improve the support we gave to sub-postmasters.
The CEO stressed that this was now a catalyst to make changes in
the Business.
(b) IThe Board were concerned that the review opened the Business up
to claims of wrongful prosecution. The Board asked if Susan
Crichton, as General Counsel, was in anyway implicated in the
prosecutions. The CEO reported that, up until eighteen months
ago, Royal Mail Group Limited (RMG) had run the criminal law
team and many of the cases in the review had arisen before
separation. The CEO explained that the Business was a
prosecuting authority and as such brought its own prosecutions.
However since separation the General Counsel had proposed
moving to the more normal position of using the CPS for
prosecutions; this was being explored.
(c) The Board expressed strong views that the Business had not
managed the Second Sight review well and stressed the need for
better management and cost control going forward.
(d) The rd accepted that this was an independent review and
thi rs ct Gi d the control of the
However tl ings that Could be managed by the Business
needed to be well managed with strong leadership and the Board
asked the CEO if she had considered changing the person leading
for the Business.
(f) IThe CEO had considered this and recognised that the Business did
not have good governance in place around Second Sight, but that
the independence of the review, and the input from MPs and
Justice for Sub-Postmasters (JFSA) had made this complicated.
ACTION: Susan (g) The Chairman asked for a review, a post mortem, to report to the
Crichton ARC explaining how we awarded and managed the contract. This
should be put in hand swiftly.
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(h) The Board asked the CEO to decide on the way forward in terms of
ACTION: CEO the leadership of this work based on the option which had least risk
for the Business.
(i) I The CFO was asked what the insurance position was. He
promised the Board a note on this. He was also asked to ensure
ACTION: CFO the both RMG and the Business’ insurers were given notice of the
review findings.
POLB 13/52 FINANCIAL SERVICES STRATEGY UPDATE
(a) Nick Kennett, Financial Services Director, joined the meeting and
took questions on the Financial Services Strategy update paper.
ACTION: (b) The Board asked for a noting paper setting out the Mercer
Nick K nett recommendation for the new Financial Services Sales incentive
rex Renn scheme.
(c) The Board congratulated Nick on the pace at which things were
changing and suggested that, because of the scale of the
contributions to the strategic plan and the reputational risk of the
manngm of delivery, a Board Sub-Committee be convened to
R a a ‘te
pany Secretary and
ACTION: com at inia Holmes) to draw
Nick Kennett up Terms of Reference for the FS Board Sub-Committee.
(e) Nick Kennett explained the work being undertaken to enhance the
Brand and make the Post Office a destination point for FS
products.
(f) IThe Board asked when the Business would know if the strategy to
move up the value chain with its additional benefits, costs and risks
was working. Nick Kennett suggested it would be Autumn 2015
before this was clear.
(g) Nick Kennett was asked for a note to be circulated to the Board
explaining the impact on the strategic plan in 2015/16 and 2016/17
of the transition from Junction for general insurance, and the effect
ACTION: on the bottom line.
Nick Kennett
The Directors noted the Financial Services Strategy update, and
the Success Criteria for Project Polo.
POLB 13/53 FINANCIAL PERFORMANCE UPDATE
(a) The Board received a financial performance update for period 2
2013, and the flash results for Period 3 from the CFO.
(b) The CFO explained that the results for period 3 had seen an
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improvement on period 2, although the greatest risk to the plan
remained in mails income. The Mails team were still comfortable
that they would recover the position after what had been a
significant downturn in small packets after the price rise.
(c) The CFO explained that the risk to income has put more pressure
on cash and the need to reduce the cost of service delivery support
functions by 20% over the next 3 years. He explained that the
ExCo were going through a reforecasting exercise and this would
make it clearer how much pressure would need to be put on
reducing spend.
(d) The Board asked for visibility of the decisions being taken by the
ExCo. The CFO was asked to produce a note to the Board by the
end of July beginning of August showing the reforecast and the list
of optional spend decisions which the Business has taken, or could
take if required. This would be spend which didn’t drive revenue
ACTION: CFO this year or next year.
POLB 13/54 CHIEF EXECUTIVE’S REPORT
(a) The Board noted the Chief Executive’s report and discussed the
following specific items:
(b) The CiWU had called a halfj day strike on tl
5 it g
17" July and were
louse. The feedback
lasting detriment to
ort to the September
ACTION: KevI
Gilliland Board with options on the way forward.
POLB 13/55 PENSIONS
(a) Chris Day updated the Board on three Pensions issues.
(b) The pension actuarial valuation has been delayed and the Trustee
has informed the pensions regulator. The final date for the
valuation is set at 30'" September.
(c) The formal consultation for changes to the pension scheme started
on the 21® June and will run until the 25"" August. To date the CMA
are engaged with the process but do not support the changes, and
the CWU have not engaged with the process.
(d) The Business has agreed the investment allocation with the
Trustee who were rebalancing the asset allocation.
POLB 13/56 GROUP STRUCTURE
I (a) The Board received a paper on the planned changes to the
i structure of the wider Group to facilitate an IPO of RMG.
ACTION: CFO (b) The CFO was asked to check with the corporate insurers to ensure
. this had no detrimental effect to the cover or cost.
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(c) The CFO was asked for a note to the Board explaining the
ACTION: CFO implications for Tax and VAT of any structure changes and
subsequent total separation
(d) The Board:-
(i) noted the planned changes to the structure of the wider
Group to facilitate an IPO of RMG;
(ii) noted the anticipated changes to the operation of Royal Mail
Holdings pic (RMH);
(iii) noted the additional duties that were likely to become Post
Office Limited’s responsibilities and that they would incur
additional cost; and
(iv) approved delegation of authority to Alwen Lyons, the
Company Secretary, and/or Susan Crichton, HR &
Corporate Services Director (in the form set out in Appendix
1) to approve and execute any documents necessary to
remove the references to the RMG Special Share and the
ACTION: RMH Special Share in the Company's Articles of
Association and to do any act or thing required to be done
Company Secretary by the Company to give full effect to, or in connection with,
e actions outlined in the Board paps
POLB 13/57 S. TTERS ARISING
I ul tl r q 21 May 2013 were
i approved for signature by the Chairman.
I (b) The noted of the discussions and actions from the Board Awayday
held on 18 and 19 June 2013 were noted.
i The CFO reported that the work on outsourcing, discussed at the
I Awayday, was progressing and the India visit was set for
September. This would be brought back to the September Board.
POLB 13/58 COMMITTEE MEETING MINUTES FOR NOTING
(a) The Board noted the minutes of the Remuneration Committee
meeting held on 1 May 2013.
POLB 13/59 STATUS REPORT
(a) The Status Report, showing matters outstanding from previous
Board meetings, was noted.
POLB 13/60 ITEMS FOR NOTING
I (a) The Board noted the Health and Safety report.
The Board asked if there was a reason for the increase in Road
Traffic accidents. The CEO explained that this had already been
identified by the Business and the issue was being reported back to
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the September ‘Road Forum’ for investigation. Any actions would
be reported to the Board in a future Health and Safety report.
(b) The Board noted the Significant Litigation report.
(c) The Board noted the Report on Sealings and resolved that the
affixing of the Common Seal of the Company to the documents
set out against items numbered 1040 to 1058 inclusive in the
seal register was hereby confirmed.
POLB 13/61 PROPOSED BOARD DATES 2014 AND Q1 2015
(a) The Company Secretary tabled proposed Board, and some
Committees, dates for 2014 and Q1 2015. The Board members '
ACTION: ALL were asked to feed back any issues by 19" July. \
POLB 13/62 ANY OTHER BUSINESS
The CFO reported that the Report & Accounts had been signed
with a target date of the 7" August for publication.
POLB 13/63 CLOSE
There being no further business, the meeting was then closed.
Redacted
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POLB 13(6")
POLB 13/64
POST OFFICE LIMITED
(Company no. 2154540)
(the ‘Company’)
Minutes of a Board meeting held by Correspondence on 26 July 2013
Alice Perkins Chairman
Neil McCausland Senior Independent Director
Tim Franklin Non-Executive Director
Virginia Holmes Non-Executive Director
Alasdair Marnoch Non-Executive Director
Susannah Storey Non-Executive Director
Paula Vennells Chief Executive Officer
Chris Day Chief Financial Officer
Alwen Lyons Company Secretary
POLB 13/64 Transitional Support Services with Fujitsu
It was noted that a meeting of the Board was to be held by
R da to considegmore an the fon negotiations for
eC cte joard held on 16 July
I 2013, the Board had asked for additional detail on the economics of
I the deal being negotiated with Fujitsu, the changes from the current
contract, and its impact on the Strategic plan numbers, before it
could make a decision on the extension of the contract for two
years. Lesley Sewell and CFO had circulated a paper to all
Directors setting out the requested information on 19 July 2013.
Having considered the information, the Board recognised that the
Business had little choice other than to renew.
The Board therefore:
(a) approved the 2 year TSS agreement with Fujitsu valued at up to
£83M; and
(b) noted that approval for authority to contract the TSS agreement
with Fujitsu would need to be sought from the Shareholder
Executive in July, which would allow the Business to conclude
negotiations and execute the TSS agreement with Fujitsu
before 30 September 2013.
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POLB 13(10")
POLB 13/65-13/67
POST OFFICE LIMITED
(Company no. 2154540)
(the ‘Company’)
Minutes of a Board meeting held on 31% July 2013
held by conference call
Present:
Alice Perkins Chairman
Neil McCausland Senior Independent Director
Alasdair Marnoch Non-Executive Director 1
Chris Day Executive Director I
In Attendance:
Sue Barton Strategy Director
Apologies for absence:
Tim Franklin Non-Executive Director
Virginia Holm Non-Executive Director
Susannah St Non-Ex@@utive Director
Paula Vennell ea aC Cc
POLB 13/65 INTRODUCTION
A quorum being present, the Chairman opened the meeting.
POLB 13/66 2013/20 STRATEGIC PLAN - STATUS UPDATE
(a) The Board noted the Status Update dated 29 July 2013 for the I
2013/20 Strategic Plan. Sue Barton advised that it was now clear
that including a commitment around the future of the NFSP would
be essential to securing agreement. It was reported that the team
were progressing on the basis of the negotiating mandate which
had been given by the Board. This was noted by the Board with the
view that being proactive and having some control on this activity
could be beneficial.
(b) The Board discussed the form and timing of the cliff. There was
concern around the extent to which this could impact upon our
ability to deliver the outcome we need on the transformation of the
network. Having heard more detail from the team around the
context, possible alternative approaches and the testing/evaluation
which the team were progressing, the Board agreed the following:
(i) The team can continue to explore alternative options around
conversion.
(ii) The outputs of this analysis activity must be clear for any
POLB 13/67
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proposed option: I
e The timing and format of any future compulsion
¢ The impact of the approach in terms of numbers and
profile of conversion (update of red/grey/yellow line
graph)
¢ The impact of the approach in terms of funding
e The underlying assumptions and conditions
e The conditions we would put in place to ensure we
get ‘bite’ in commitment from NFSP and
Government.
(iii) I The realpolitik of securing a NFSP special conference ‘yes’
vote should be considered — testing the reaction of different
populations to the future network transformation proposals.
(©) The Board agreed that the next weekly call should take place on 19 I
August 2013.
CLOSE
There being no further business the meeting was closed.
Redacted
PC 13/28-13/29
Strictly Confidential
POST OFFICE LTD
PENSIONS SUB-COMMITTEE
Present:
In Attendance:
PC 13/28
PC 13/29
Action: Secretariat/
Sarah Hall
on 1 August 2013
Held by Correspondence
Virginia Holmes (VH)
Chris Day (CD)
Susannah Storey (SS)
Larissa Wilson (LW) Secretariat
INTRODUCTION
It was noted that a meeting of the Committee was to be held by
correspondence to consider an update on the professional fees incurred
since last discussed on 4 March 2013 and to seek authority for new fees
arising.
PROFESSIONAL FEES
i Ci i s for Aon Hewitt
a 0) er) ones its consideration
Committee members responded in writing to LW. They noted the fees
incurred to date and approved the fees proposed in paragraph 2.2 of the
Paper.
However, VH and SS raised concerns over the quantum of fees. It was
agreed that the approach to professional fees be considered at the next
Pensions Committee in the Autumn. VH recommended that the
Business consider negotiating a fixed fee structure or a fee cap.
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