Sat - Post Office Chair Call
26 January 2024 15:22
Time 15:45 - 16:00
Purpose To inform Henry he is being removed as Chair.
Agenda NA
Attendees SoS .
Henry Staunton - Post Office Chair
Private Secretary Annie
Megan
SpAd steers
Subtabs 1. Script
2. Confidential - background
3. Confidential - grounds for termination
WC 22 Jan Page I
BEIS0000930
BEIS0000930
BEIS0000930
BEIS0000930
Script
27 January 2024 11:06
Note: Bits in bold indicate messages you must give in line with legal advice
I'm sorry to be speaking to you under these circumstances. I
understand that given the increased media scrutiny at the moment,
these are difficult times for the Post Office.
I’m speaking to you today, to tell that you that the government, as
sole shareholder, is exercising our power, under the company’s
Articles to remove you as Chair of the Post Office Board.
Now more than ever the Post Office is rightfully under a heightened
level of scrutiny. Culture in an organisation is set right at the top, and
we, as Shareholder, have a duty to make sure the culture in today’s
Post Office is nothing like the Post Office of the past. This includes full
investigation of whistleblowing allegations and fostering an
environment of respect and openness, so colleagues feel able to
speak up.
Unfortunately, we understand that your behaviour regarding open
whistleblowing investigations in Post Office has not met that
standard. We understand that you have repeatedly put pressure
on executive team members and other board members to stop
whistleblowing investigations. We have heard this from multiple
different parties who have expressed their concerns to us.
This unacceptable in any circumstance, but particularly egregious in a
Post Office context, of historic failings in respect of whistleblowing.
We understand your behaviour in the workplace has been
disruptive to the Executive and not in keeping with standards
expected of your position.
Finally, we understand you have displayed a disrespect for due
process on governance matters such as the appointment process
for the SID and other matters requiring approval by the
Shareholder or HMT. Again a matter than is of particular concern in
the sensitive operating environment of the Post Office, and its public
subsidy.
When you were appointed as Chair of the Post Office your Letter of
Appointment set out the expectations of your role, and frankly the
behaviour above does not meet those expectations.
We will notify the Post Office of our decision immediately.
WC 22 Jan Page 2
BEIS0000930
BEIS0000930
Confidential Background
27 January 2024 11:37
Background (not part of script)
1.
On Monday 22 Jan, the Senior Independent Director (SID) of the Post Office
Board telephoned DBT to express serious concerns about Mr Staunton’s
behaviour, and recommended to the Department that you remove him as Chair
of the Post Office Board. UKGI and DBT officials share this view and agree with
this recommendation.
2. The concerns raised by the SID include:
a. Repeated attempts by Mr Staunton to close down a whistleblowing
investigation into his (and, the CEO’s) conduct1. This has included
attempting to pressure both POL staff and Board members into ending the
investigation, which the SID notes reflects a pattern of behaviour on Mr
Staunton’s behalf.
b. Aggressive, intimidating and disrespectful behaviour to other Board
members and members of the Executive Team. This has resulted in
written complaints from Executives to the CEO about the Chair’s conduct
and multiple verbal complaints to the Chief People Officer from different
parties.
c. Continued poor understanding of the public sector operating environment
and poor judgement of appropriate actions given the particular scrutiny
that Post Office operates under. This has not improved over time despite
senior UKGI and DBT staff seeking to assist him with this.
d. Disregard for due process on governance matters, including most recently
announcing a new SID to the Board and seeking to close the ongoing
public appointment process, without formal consultation with the Board,
following Board processes, or seeking Shareholder approval.
e. Lack of constructive support to the CEO, who is under considerable
pressure.
3. These concerns come before, and aside from, the conclusion of a
whistleblowing investigation concerning his conduct (allegations of misogyny
and racism). We expect the initial findings of that investigation this
week. However, regardless of those findings, the view of the SID, RemCo
Chair, UKGI and DBT officials is that we should require him to step down given
the concerns set out above.
The concerns that have been raised would indicate conduct that is not in
keeping with Mr Staunton’s obligations under his Letter of Appointment
(between POL and Mr Staunton dated September 2022, LoA) or POL’s Articles
of Association (AoA) (see below for further detail).
WC 22 Jan Page 3
BEIS0000930
BEIS0000930
Confidential Grounds for Termination
27 January 2024 11:40
1. The Secretary of State for the Department Of Business And Trade has enhanced
rights under the Articles of Association (AoA) as the Special Shareholder of POL
including in relation to the appointment and removal of directors.
2. Article 42(A) of the AoA states “The Special Shareholder shall be entitled from time
to time to appoint and/or remove any person as chair of the company by notice in
writing delivered to the company and signed on behalf of the Special Shareholder.”
Under this provision there is no requirement to provide grounds for the removal of
the chair.
3. The Chair has entered into in a Letter of Appointment (LoA) when he became chair
which sets out the terms of the appointment. Paragraph 1 of the LoA sets out the
terms of the appointment are subject to the AoA and therefore including Article 42(A)
above. On removal by the SoS the Appointment terminates automatically with
immediate effect.
4. Article 3 sets out the roles and responsibilities of the Chair. These include, inter alia,
requirements to:
1. Article 3.7(i): “uphold the highest standards of integrity and probity and
support the executive directors in instilling the appropriate values,
behaviours and culture in the boardroom and beyond;”
2. Article 3.7(0): “immediately report your own wrongdoing or the wrongdoing
or proposed wrongdoing of any employee or other director of the Company
of which you become aware to the Senior Independent Director’;
3. 3.8(h): “Develop productive working relationships with all executive
directors and the Chief Executive Officer”.
4. 3.8(j): “Demonstrate ethical leadership and promote and highest standards
of integrity, probity and corporate governance throughout the Company
and particularly at Board lever’;
5. 3.8(m): “Promote a culture of mutual respect, openness, and debate, by
facilitating the effective contribution of non-executive directors in particular
and ensuring constructive relations between executive and non-executive
directors”
5. Under the LoA Mr Staunton is required to have regard to:
1. 3.4: The general duties of directors in Part 10 of the Companies Act 2006,
including the duty to have regard to the interests of the Company’s
employees.
2. 3.3: The relevant obligations of the UK Corporate Governance Code,
which states that the Chair should facilitate constructive Board relations
and promote a culture of openness and debate (“Principle F”), with
appointments to the board subject to a “formal, rigorous and transparent
procedure” (“Principle J”).
3. 3.7(i): uphold the highest standards of integrity and probity, supporting the
WC 22 Jan Page 4
BEIS0000930
BEIS0000930
executive directors in instilling the appropriate values, behaviours and
culture in the boardroom and beyond.
4. The Whistleblowing Code of Practice, which requires an employer to
“make a commitment that all disclosures raised will be dealt with
appropriately, consistently, fairly, and professionally” and “create an
organisational culture where workers feel safe to raise a disclosure”.
6. Mr Staunton is also required, under paragraph 3.8 of the LoA to:
1. 3.8(h): “Develop productive working relationships with all executive
directors and the Chief Executive Officer;
2. 3.8(i): “Consult the Senior Independent Director on Board matters in
accordance with relevant obligations of the UK Corporate Governance
Code;”
3. 3.8(j): “Demonstrate ethical leadership and promote and highest standards
of integrity, probity and corporate governance throughout the Company
and particularly at Board level;”.
WC 22 Jan Page 5