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@ Shareholder
Executive
HM Government Commercial - In Confidence
Minutes of Shareholder Executive Board
Wednesday 12 September 2012 at 15.00
Members _ Patrick O'Sullivan (Chair) (PO’S) Attendees: Rachel James (Item 2) (RJ)]
present: Claudia Arney (CA) Oliver Griffiths (Item 4) (OG)
Gerry Grimstone (GG)
Jeremy Pocklington (JP)
Tony Watson (TW) Secretary: Peter Batten
Stephen Lovegrove (SL)
Anthony Odgers (AO)
Mark Russell (MR) Apologies: Lord Carter
1. Apologies for absence, Chair’s welcome and introduction, minutes
from last meeting, declarations of interest
1.1.PO’S welcomed the Board, noting Lord Carter's apology. The minutes
of July’s meeting were discussed. The recruitment of the new IE
Director, Ken McCallum (KMC), who will join the Board, was
confirmed. CA suggested that the composition of the Board should be
evaluated to ensure compliance with the Combined Code.
1.2.Board actions were discussed, with AO providing an oral update about
GIB governance, noting that the GIB CRO provides an independent
check on investments at the moment. [action] Once governance
matters have been agreed with the GIB ARC and incoming CEO, AO
will submit_a paper to the Board. (Update included in CEO report).
1.3.SL explained that he was due to meet Lord Browne at the end of
September. Other actions were noted pending their discussion later in
the meeting.
2. Chief Executive’s Report
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2.3.
2.4.)
25.
. IRRELEVANT
2.7)
2.8.1
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. Cabinet Office Commercial Models
3.1.SL provided an overview of the Cabinet Office (CO) work, which is in
response to the Minister for the Cabinet Office’s aim for a structured,
employee-led outsourcing of non-essential Government functions,
such as shared services. SL noted that there has been open
engagement between ShEx officials and Ed Welsh (CO lead official).
3.2.PO’S was interested to understand how this work impacted on BIS
policy with regard to Post Office Ltd (POL). SL assured the Board that
despite CO interest in POL, there was no threat to ShEx policy
ownership.
3.3.CA was concerned about the impact on the ShEx brand, and noted the
possible confusion among portfolio assets caused by CO involvement.
GG was concerned that the establishment of this group outside of
ShEx was a challenge to ShEx’s cross-Government role.
3.4. TW was also interested to learn about ShEx’s involvement in the GPU.
MR noted that ShEx sits on the GPU Steering Board, but that without
the anticipated major disposals of Government property assets, there
had been no role for ShEx. The Board noted ShEx’s technical ability
in this area through the nearly-completed disposal of c. £500m of
Royal Mail Pension Plan property assets.
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4, Green Investment Bank
4.2,
" IRRELEVANT
44)
5. Royal Mail
5.1.SL presented the Royal Mail (RM) paper, noting the need to focus on
the company’s revised business plan and Chairman. SL noted that
the revised business plan was supported by higher than expected
revenues, but was not as ambitious with regard to modernisation.
5.2.SL noted that the figures are undergoing rigorous scrutiny, and ShEx
will be keen to ensure the business plan appropriately challenges and
stretches the company. [action] The Board requested an update
detailing the findings of this scrutiny process. (See CEO update, also
RL to attend November Board).
5.3.SL noted that the RM Board preference has been for a full IPO as the
only acceptable option. SL explained that this was not a view held by
ShEx, and that officials were working on a range of disposal scenarios,
including where a disposal is not possible. Under such circumstances
it was noted that the continuing modernisation would be a priority.
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5.4. TW was interested to understand the role of ShEx should there be a
full disposal. SL noted that ShEx would retain a shareholder role as
long as the Government was a shareholder. This role would cease
once all shares had been disposed. However, Government would
remain involved in the sector as a result of postal regulation.
5.5. Changing the focus of the discussion, PO’S noted that it was apparent
that Donald Bryden (DB) had not notified Smiths of his Sage
appointment, and that given DB’s recent illness there is pressing need
to resolve the concerns expressed by the ShEx Board in July.
5.6.SL described the range of issues thrown up by DB’s current position.
The Board was of the view, both, that he should be asked to drop a
Chair role as soon as possible, and that a replacement for David
Currie should be appointed with a view to be able to fill in as Chair
should that ever prove necessary. [action] SL to brief the Board
following discussion with DB. (Completed, see CEO update).
5.7. [action] The Board also requested that an external review (possibly by
Barclays) to assess the skills of the Board and to identify any skills
gaps, which would be common practice as a company prepares for a
transaction. (Update on progress to be given at November Board).
5.8.SL thanked the Board for a helpful discussion
6. Any other business
6.1.PO’S thanked the members for their contributions and closed the
meeting.
ShEx Board Secretary
September 2012
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7. Actions
Completed actions
Minute I Action point Action Due Status
oe ef officer... oe
Paper detailing GIB Anthony Sept I Oral report at
governance and Odgers 2012 I Sept Board, with
accountability update in paper
(12)20.
28 i
5.2
5.6
5.7 - Commission an external
review of RM Board to map
skills and identify gaps.
Outstanding actions
Agend I Action point Action Due Status
a ltem officer date
5 es
7 IRRELEVAN TT)
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