POLB(06)2"¢
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In Strictest Confidence
POLB 06/06 - 06/29
Present:
Sir Michael
Hodgkinson
lan Anderson
Alan Cook
Peter Corbett
Ric Francis
Brian Goggin
Graham
Halliday
Allan Leighton
In attendance:
Richard Barker
Simon Carter
Adam Crozier
Jonathan Evans
Sue Huggins
Neil Owen
David Smith
Jeff Triggs
Apologies:
David Miller
POLB06/06
POLB06/07
Post Office Limited
(company no. 2154540)
Minutes of the meeting of the Board
held at 148 Old Street, London
on February 9" 2006
Chairman, Post Office Limited
Human Resources Director (Acting MD)
Non-Executive Director
Finance Director
Operations Director
Non-Executive Director
Banking & Financial Services Director
Chairman, Royal Mail Grotip
Sales Director
Head of Marketing
Chief Executive, Royal Mail Group
Company Secretary
General Manager - Rural Agency Network (for POLB06/18)
Notes
General Manager, IT (for POLB06/19)
Lawyer, Slaughter & May (for POLB 06/13)
Chief Operating Officer
MINUTES OF PREVIOUS MEETINGS POLB(05)7™ AND
POLB(06)15"
(a) The Board approved the minutes of the Board meetings of
December 14th 2005 and January 13th 2006.
RESIGNATION AND APPOINTMENT OF DIRECTORS
(a) The Chairman reported the resignation of David Mills and
Gordon Steele, effective 31 December 2005 and 31°
January 2006;
(b) the Company Secretary was duly authorised to file the
relevant notifications with Companies House.
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POLBO06/08
Action:
Simon Carter
POLB06/09
Action:
Simon Carter
Action:
Neil Owen
POLBO6/10
POLBO6/11
POLB06/12
In Strictest Confidence
STATUS REPORT POLB(06)05(a) and (b)
(a)
(b)
The Board noted the report, and in addition:
the paper to outline potential online business opportunities
for Post Office Ltd over the next 10 years would be deferred
to the April 2006 Board meeting.
CHAIRMAN’S BUSINESS POLB(06)06
(a)
(b)
Sir Michael’ Hodgkinson reported that the Board would need
to maintain its focus on sales, and a significant part of the
April Board would be devoted to this issue;
in the light of the continuing need to focus on sales in the
context of other important strategic developments (such as
the demise of Card Account) the Board agreed to the
formation of a sub-committee of the Board which would be
chaired by Mike Hodgkinson and include all Executive
Directors. Neil Owen would arrange and communicate
suitable dates. The purpose of the sub-committee would be
to keep a close watch on the performance of the Company,
reporting to the full Board if necessary between scheduled
meetings, of any significant issues which needed to be
brought to its attention.
MANAGING DIRECTOR’S REPORT POLB(06)07
(a)
(b)
(c)
(d)
lan Anderson reported the following matters'to the Board:
Leadership Meeting: Alan Cook and Adam Crozier had
attended the Leadership meeting which had gone well;
POFS: Des Crowley had been appointed as Chairman of
POFS;
Industrial Action: It was likely that 1 day strike action would
take place ata number of North London offices.
Contingency arrangements had been made to ensure the
affected offices remained operational.
PR REPORT POLB(06)08
(a)
The Board noted the report.
BUSINESS SALES AND PERFORMANCE REVIEW POLB(06)09
(a)
Peter Corbett provided the Board with a presentation on
Period 10 business performance, and the 2006/07 budget.
The Board noted the presentations, and in particular that:
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lan Anderson
POLB06/13
(b)
(c)
(d)
(e)
(f)
(9)
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sales stood at £975.7m, £13.7m (1%) lower than budget;
operating profit (after allocations and pension funding) was a
loss of £104.7m, £5.9m better than budget;
Year To Date cash outflow was £282m versus a budgeted
outflow of £322m, which was £40m better than budget
(budget included a £100m reduction in network cash);
sales forecast was lower than the budget of £1.178b by
£18.5m;
operating profit was forecast to better the operating loss
target. of £130.9m by £4.5m (mainly due to lower Group
allocated costs);
cashflow forecast was a £177m outflow, £34m better than
the budget of £211m;
Have Your Say results had deteriorated to 59%. This was
due to the higher expectations placed on staff to perform,
coupled with the ongoing franchising programme. lan
Anderson would discuss and work through the options
available;
the target of achieving 845,000 financial services sales was
tracking slightly ahead of target;
the current proposal for the 2006/07 budget was for a
£190m loss (£65m worse than 2005 /06). A review had been
held with the Group Chairman and Chief Executive on 30"
January. Follow up actions were now in progress before a
final decision was made;
traditional income was projected to fall by £100m, and would
be partially offset by a £30m increase in commercial income;
cash outflow was projected to worsen by £108m to £285m
despite £66m of further reductions in network cash (due to
the Fujitsu contract, restructuring, severance payments and
the higher operating loss).
SOLVENCY POLB(06)10
(a)
(b)
Peter Corbett introduced Jeff Triggs to the Board meeting
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The Board
meeting was an opportunity for the Directors to carry out
such a review;
(c) in addition, with the Company’s year end approaching, it
was noted that the directors needed to be satisfied (and if so
satisfied, to convince the Company's auditors) that the
Company was in a position to prepare its accounts on a
going concern basis;
(d) there were produced to the meeting the following
documents:
(i) a paper from Peter Corbett setting out the
Company's current financial position and forecast
cash flows for'the 24 months to 31 March 2008 (the
“Workin: ital ay
()
(iil)
(iv) a draft comfort letter from the Government to the
Company (the “Comfort Letter”), addressing the sort
of comfort which, may be requested from the
Government pending finalisation of a long term
funding solution;
(e) Peter Corbett updated the Board on the current trading and
cash flow position of the Company;
(f) it was noted that the Working Capital Report outlined the
forecast financing headroom of the Company and the
significant dependencies on which that was based. It was
clear from the Working Capital Report that in the absence of
an acceptable funding package. it was unlikely that the
Company would have sufficient cash to meet its liabilities as
they fell due over the next 24 months;
(9) the. Company’s ability to perform in accordance with its
business plan and achieve long term viability and solvency
was dependent on reaching an acceptable long term funding
arrangement with Government, including some or all of the
following elements:
(i) the Company obtaining access to the remainder of
the “Mails Reserve” (approximately £450 million). In
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this regard it was noted that as Royal Mail Group ple
(“Royal Mail”) was currently insolvent on a balance
sheet basis, the fiduciary duties of Royal Mail’s
directors to its creditors might make it difficult for the
Royal Mail dire:
Mails Reserve.
(ii) the existing working capital facility from the DTI
being extended beyond March, 2010, increased and
amended so as to remove the limitation whereby the
maximum amount available to be drawn down is
limited to the amount of cash in the network;
(iii) State aid clearance of funding for the rural network of
up to. £300 million until March 2008. It was noted
thatthe Board was confident that the Government
would ultimately obtain the necessary clearance by
the end of February, 2006; arid
(iv) agreement by the Government to continue
substantial rural funding payments after March, 2008
(and:state aid approval for that);
it was noted that none ofthese dependencies was assured
of being met and that the future of the Company was clearly
dependent.on the success of negotiations with the
Government as to the long term funding of the Company;
the Board noted certain consequences flowing from
insolvency, including:
(i) the requirement for the directors to have regard
primarily to the interests of the Company's creditors
—i.e. by ensuring that the business is run with a view
to minimising loss to the Company's creditors;
(i)
(iii) the ability of the Company to raise funding and to
enter into other commercial transactions;
(iv) the requirement for the directors to keep under
regular review the question of whether the Company
should continue to trade and incur new creditors; and
the likelihood of such insolvency causing
agreements to which the Company is a party being
liable to be terminated;
(v)
the directors were reminded that they needed to be satisfied
on a continuing basis that the Company remains in a
position. to meet its liabilities as they fall due over the
foreseeable future;
it was noted that work was ongoing with a view to
establishing the consequences of the Company's insolvency
under various long term contracts — particularly as to
whether counterparties currently had a right‘to terminate
such contracts and whether there were grounds to believe
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Peter Corbett
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that they were likely to exercise those termination rights.
Peter Corbett agreed to update the Board when such work
was completed;
it was also hoted that negotiations with Fujitsu were ongoing
with a view to ‘amending and extending the current IT
outsourcing.agreement for the Horizon system until 2015. It
was agreed that the contract extension should not be
formally signed until the directors were satisfied that the
Company would be likely to be able to meet its liabilities to
Fujitsu for the full extended term of that agreement;
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Peter Corbett reported that he had also made contact with
an insolvency practitioner from PWC on:an informal,and
preliminary basis;
it was noted that so far the: directors had been‘continuing to.
trade ‘in reliance on coming to:an acceptable long term
funding arrangement with Government. In addition, it'was
noted that the. Board was also placing reliance on state aid
clearance for the network funding Curreritly committed,
subject to that clearance, over the next two years;
one of the purposes ofthe meeting was to review: the
progress of the negotiations with the Government as to the
future finding of the Company to ensure that the Board still
believed that such support would be forthcoming;
it was reported that the timetable agreed with Government
had originally set a deadline of 30 September 2005 for
finalising a long term funding package. This deadline had
been. extended to 31 December 2005 and then
subsequently. extended further to the.end of February 2006.
It now appeared highly unlikely that the Government would
be making any firm proposals by the end of February;
it was agreed that it was still the Board’s expectation that a”
funding package Would be agreed with the Government and
that such package would in the directors opinion restore the
solvency and long term viability of the business. However, it
was noted that it was unlikely that the Government would be
in-a position to commit:to:such.an arrangement in the short
term;
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(s) it was considered that, even though the Board thought it was
unlikely that the Government would allow the Company to
go into insolvent liquidation, the directors would require
additional comfort to enable them to continue trading in the
interim period and to approve the Company's accounts for
the year ending March 2006 on a going concern basis;
(t)
(u)
It was noted that the
Government may be considering other options, in particular
some form of short term loan from the Mails Reserve, but
that no formal proposal had been made and it was not clear
how such options would overcome the fiduciary duty and
state aid issues (nor that they would in any case produce
Action: sufficient funds). It was agreed that Peter Corbett would
Peter Corbett continue to progress these short term options with
Government:and keep the Board informed as to progress;
(v) in the meantime it was agreed that in the time available the
most practical solution would be to seek a comfort letter
from the Secretary of State giving the directors assurance
as to the prospects of achieving:an acceptable long term
funding solution and agreeing that, pending such
artangement being entered into; the Company would be
supported to the extent necessary to enable it to meet its
liabilities. as they fell due;
(w) the form of Comfort Letter which had been tabled to the
meeting was considered. Although it was pointed out that.
the draft letter had been prepared on behalf of the Company
and Government had given a preliminary indication that it
would be unacceptable to Government if proposed in its
current form,. it was agreed that in the time available the
most sensible option would be to try to obtain the best
comfort available.from the Secretary of State, so as to allow
the directors to come to the view that the Company could
continue. to trade as a going concern and to approve the
year end accounts of the Company on a going concern
basis;
(x) however, it'was agreed that.the progress towards obtaining
such a Comfort Letter and the wider discussions with the
Government should be kept under regular review with a
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Mike
Hodgkinson
(y)
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view to taking appropriate action should the position change.
In particular, the position would need to be carefully
considered before the directors could sign the 2005/6
accounts on a going concern basis;
after considerable discussion and having regard to:
(i) the current and projected financial position of the
Company, including its financial performance and
cash flows;
the contents of the Working Capital Report:
‘the risk of action being taken by counterparties to
terminate contractual arrangements on the grounds
of the Company's insolvency and the directors
assessment of-the likelihood of such action being
taken;
(v) the current status of negotiations with the
Government towards entering into a satisfactory long
term funding arrangement;
(vi) the directors continued expectation that a long term
funding package would be agreed with Government;
and
(vii) the prospects of achieving satisfactory short term
funding commitments or comfort pending the entry
into such.a long term arrangement,
it was agreed that:
(viii) it'Was appropriate for the Company to continue to
trade on a going concern basis for the time being;
(ix) the Company should continue to pursue the short
term options with a view to obtaining sufficient
comfort.to enable the Company to continue trading
pending éntry into a Satisfactory long term funding
arrangement with Government, including in particular
a. comfort letter from Government on terms
acceptable to the Board;
(x) the Chairman should write to Government to seek
reassurance that the Board's confidence that a long
term funding solution would ultimately be
forthcoming was not unfounded, and to put forward
the Board’s request for a comfort letter from
Government pending that solution being
implemented; and
(xi) the solvency of the Company should. continue to be
kept under regular review, particularly with regard to
the continuing discussions with Government both as
to the long term funding solution and of the
Company's short term financing requirements
pending entry into such a long term arrangement.
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Action:
Peter Corbett
In Strictest. Confidence
A&L SECURITY AND INTER-CREDIT AGREEMENT POLB(06)11
(a)
(b)
(c)
(d)
(e)
(9)
(h)
(i)
Peter Corbett presented the A&L security and inter-credit
agreement overview paper to the Board, together with the
draft agreements. The Board noted that:
when the Department for Work and Pensions withdrew the
pre-funding of network cash, the Company had signed a
loan agreement with the Department of Trade.and. Industry
(DTI) of £1,150m in order to fund this cash: As security'‘for
this facility the DTI had a floating charge over all the
Company's assets;
Post Office Ltd provided a number of intermediary banking
services on behalf of Alliance & Leicester (A&L) which were
renegotiated in 2004. As part of these new terms of
business it was agreed that Post Office Ltd would settle
funds received from A&L customers on a Day B basis, being
the day after receipt, instead of the current long standing
Day A basis;
negotiations between Post Office Ltd, A&L and the DTI on
the terms of the Security, Intercreditors and Ancillary
documents were nearing completion, and the intention
would be to complete them before the year end;
as this would give A&L a credit risk on the Company they
were only prepared to allow a maximum £150m to be settled
on Day B subject to them having security over our assets
and there being a buffer of at least £100m. If at any time
Post Office Ltd fell below this buffer, A&L could cancel the
facility and return to Day A settlement or reduce the facility
on a pro rata basis;
Post Office Ltd had already given the DTI a charge over its
assets, and this would require the DTI to enter into an
Intercreditors agreement with A&L to share such security on
a pari passu basis;
Brian Goggin raised the concern that such an agreement
would provide other creditors with notice of potential
problems with Post Office Ltd, and this may impact on its
trading position;
Mike Hodgkinson explained that an opportunity existed for
the Government to provide an additional £100m of.funding
by changing the security requirements. A need existed to
ensure this money was not included as part of the £1.25b
working capital requirement;
the Board agreed that further details of the benefits of this
arrangement for Post Office. Ltd would be circulated for
information, but in any event further agreed that Peter
Corbett would be. authorised to conclude the negotiations,
and authority was delegated to Peter Corbett and Graham
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Halliday to sign the Security, Intercreditors and ancillary
documents on behalf of the Board.
SALES RESULTS REVIEW POLB(06)12
(a)
(b)
(c)
(d)
(e)
(f)
(9)
Simon Carter circulated a short presentation which
demonstrated the impact of various sales incentives and
marketing initiatives against the sales volumes. of Post
Office Ltd’s focus. products. The Board noted the following:
over the yéar, there had been limited levels of advertising
support behind any of the core Post Office® products,
especially in relation to the highly competitive markets, with
significant investment only taking place during initial launch
periods;
whilst there appeared to be no direct link between
advertising spend and sales capability, at this low
background investment, such spend was below the critical
“cut through” levels, for products where the Post Office® had
low customer.awareness;
there was also no clear link between “Primary” in-branch
focus, and sales uplift. However, HomePhone and Car
Insurance sales had increased 400% (from 8,000 a week to
24,000 & 1,750 to 7,000 sales respectively), since the start
of the calendar year. Credit Card sales had now returned to
launch levels (1,700 a week);
Direct Sales of all three. products were at record levels;
especially on-line, largely due to specific
“aggregator’/"affiliate” activity;
all three products had received intense sales focus, with a
specific branch incentive.scheme. In addition, HomePhone
and Car Insurance had benefited from a market-leading
“£50 off’ sales incentive. Credit Card had been the “Primary”
in-branch campaign;
possible explanations for these results included:
(i) the use of sales incentives had given colleagues
something to promote to customers;
(ii) the £50 discounts represented significant market
leading offers;
(iii) the branch incentive scheme (“Treasure Chest”) had
had a positive motivating. effect on colleagues,
beyond prevailing remuneration;
(iv) the focus on just three products, rather than thirteen
Focus Products (and around 170 counter products)
had simplified matters for colleagues;
(v) the intense sales activity and a level of passion and
enthusiasm across Head Office support teams,
Sales Account Managers;. internal communication
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had garnered activity to new levels;
whilst the immediate focus was delivering the year-end
sales numbers, all of these lessons were being incorporated
into the plans for 2006/7;
Peter Corbett pointed out that the Board. should still have in
mind that the three biggest products accounted for only 2%
of Post Office Ltd’s business, and therefore further growth of
these products was essential;
Alan Cook stated that when he commenced his role as MD,
he would be looking at what the Post Office was for, the
links between the most successful products, and the need
for strong brand associations;
Brian Goggin stated that there would be a continuing need
to weigh up the complexity and profitability of the products.
Allan Leighton further highlighted the need to keep the
products and offers simple and_straightforward for
customers to ensure their success;
Adam Crozier highlighted the importance of good product
design, and for the Board not to become complacent and
lose the market share that had been obtained. Customers
Were now doing their own research using the internet which
was playing an ever increasing role;
Graham Halliday stated that further opportunities would
present themselves as sales volumes continued to grow.
The-signs were that providers were getting behind the
products and would offer better deals as the volumes
increased;
Mike Hodgkinson stated that the foreign currency market
research had indicated that customers with higher incomes
would holiday in the winter, whereas. those on lower
incomes. would holiday in the summer. Post Office Ltd had
been less successful at attracting customers from the higher
income groups. Adam Crozier stated that this highlighted the
need for proper management of the portfolio of products,
and that it should not be assumed that the entire customer
base wanted financial services products. Higher income
groups tended to research the best:deals using the internet;
Allan Leighton explained that one of the key barriers to
achieving the sales targets was the inconsistency of sales
performance within the branch network. The issue of
branches not prepared to dedicate effort to sell the products
would need to be addressed. The costs to the Company
would not be increased by effectively addressing these
performance issues. However, Peter Corbett pointed out
that the importance of reducing costs should not be
underestimated;
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(p) Alan Cook.explained that when Directly Managed Branches
became franchised offices, sales of financial services
products decreased, but profitability of the branch increased;
(q) The Board agreed that:
Action: (i) consideration should be given to excluding sub-
Richard Barker postmasters who refused to sell new products from
lan Anderson the next ‘Share in Success’ scheme;
Action: (ii) further analysis of product and agent sales would be
Simon Carter produced for the April 2006 Board meeting. Alan
Cook requested that he be given more time, on
becoming MD in March, to review the’ sales and
product strategies. Sir Mike accepted that the
Board's consideration of these issues in April would
only be preliminary to a full review of the strategies
which Alan Cook and his team would need to
consider in much more depth.
POLBO06/16
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Action:
=~ Irrelevant
lan Anderson
POLBO6/17 CARD ACCOUNT UPDATE POLB(06)14
(a) Graham Halliday circulated a paper and highlighted. the
following matters:
(b) DWP reconfirmed that the current card account contract
would not be extended beyond March 2010, moreover that
no payments would be made by Government to Post Office
Ltd for any card accounts still in operation after 31st March
2010. Post Office Ltd therefore need to ensure they manage
their card account operations accordirigly;
(c) DWP also confirmed that the last credit would be made to
an active customer card account in September 2009. This
was with the intent of providing customers with sufficient
time to withdraw all their funds and close their accounts prior
to 31st March 2010;
(d) Government reconfirmed that the pilots to test migration
strategies would be commencing during February and that
results would. be shared with Post Office Ltd when these
were available;
(e) DWP did not rule.out contracting with a new supplier fora
low — end customer product. The Government was likely to
view positively a solution provider that included within its
solution access to cash via Post Office branches. If Post
Office Ltd could bring a product forward that matched the
Government's expectations on cost per account, product
attributes, and service requirements, then they would be ina
very strong position to win the business;
(f) The Board noted the formation of:
(i) across business-working group to develop the
potential solutions for the card account; also
identifying and assessing the most.suitable suppliers
for such a solution;
(ii) a card account EC Steering Group with responsibility
for directing and agreeing the strategic solution for
the business.
POLBO06/18 CARD ACCOUNT MARKET RESEARCH - POLB(06)15
(a) Graham Halliday provided a presentation which was noted
by the Board.
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POLB06/19 POST-CARD ACCOUNT DECISION STRATEGY - POLB(06)16
(a) Richard Barker introduced Sue Huggins'to the Board. A
presentation was circulated to update the Board on the
progress of the alternative network scenarios given the
Government's recent decision to manage down the Card
Account;
(b) many stakeholders now accepted thatthe network was too
large, and the expectation that POL/RMG could financially
support anything other than a commercial network was
increasingly untenable. Any network required for social
purposes would need to be funded by Government: There
was an inevitability about the need for network size
reduction and the need for policy decisions to determine the
extent of that reduction. It was acknowledged that this was
difficult and sensitive and that it remained’ a.matter for
Government;
(c) a‘thought-piece’ of five policy scenarios from a Government
perspective were presented for discussion;
(d) the Board considered each of the scenarios which included
options to:
(i) continue to support current network but remove need
for ‘like for like’ replacement activity;
(ii) replacing rural branch overprovision with outreach;
(iii) a mix of closure and outreach activity in urban and
rural social areas;
(iv) a mix of closure and outreach activity with more
emphasis: on closure so that future social provision
was primarily via outreach;
(v) amajor closure programme resulting in a purely
commercial network with no ongoing funded social
provision;
(e) after some discussion the Board agreed that option (ii) was
the most appropriate, and would be the most effective
means of providing a viable structure to the network. The
Action: Board further agreed that the scenario would be discussed
Sue Huggins with Alex Smith and communicated to Government in the
Adam Crozier "appropriate manner.
(f) In addition, the Board agreed that discussions of the options
with Government, the term ‘Base Case’ and ‘scenarios’
would be-used.
POLB06/20 HORIZON NEXT GENERATION BUSINESS CASE
POLB(06)17
(a) Ric Francis introduced David Smith to the Board and the
Horizon Next Generation Business Case was discussed.
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(c)
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The Board noted that:
it was essential that Post Office Limited achieved significant
reductions in IT costs to return the business to sustainable
profitability. The major opportunity to do this resided with the
Horizon. system that was provided by Fujitsu Services under
a contract that expired in March 2010;
in March 2005 Fujitsu Services proposed a major
investment in application, branch and data centre hardware
which would simplify the solution enabling significant
reductions in recurring operating costs on the basis that the
term of the existing contract was. extended to March 2015.
However, this proposition gave no scope for further
reductions once the benefits of the upfront investment had
been realised;
Post-Office Limited had negotiated a new deal with Fujitsu
that delivered significant guaranteed cost reductions on.
radically different terms to thosein the current contract.
Under'these revised terms Post Office Limited would be
able to market test all components of the contract and
Fujitsu Services were incentivised to achieve further year on
year reductions in costs;
Alan Cook raised the matter of network size and cost
variability. Ric Francis clarified that, variability was primarily
driven by the number of transactions rather than number of
branches;
having considered the P&L.and pre-tax cashflow impact'for
Horizon Next Generation, the Board agreed a further £4m
investment (in addition to the.£6m already authorised) to
continue development work in order to maintain the
necessary progress to meet the Post Office Business Plan.
The Board agreed the deal with Fujitsu in principle, but the
board noted that it;would be necessary to make the next
investment decision in the April-May timeframe when the
overall position on the potential to sign the long-term
contracts would be clearer.
ASSOCIATE COMPANY ITEMS FOR NOTING
POLB(06)18
The Board noted the POFS minutes of 8" November 2005.
Graham Halliday clarified that synergies between financial
services products were being examined by Project Rainbow;
there were no further FRTS Board minutes available for
noting.
FUNCTIONAL REPORTS
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(b)
(c)
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FINANCE FUNCTIONAL REPORT POLB(06)19
The Board noted the report;
issues in relation to business performance, sales
performance, and solvency had already been discussed;
Impact: The programme to replace Post Office Ltd's legacy
systems was nearing completion. Preparations were being
made to hand over 'to business as usual: All planned
financial benefits were forécast to be delivered.
SALES & SERVICE REPORT POLB(06)20
The Board noted the report, and also noted that:
Restrictions: on 16th December Post Office Ltd provided its:
response to comments on Postmasternet's publicised
response to the OFT’s provisional decision to close its case
file. Earlier this month the OFT advised that a further
meeting with Post Office Ltd was unlikely to be necessary.
The OFT hoped to be in a position to inform of the "next
steps" by the end of January and no later than mid-
February. It was thought likely that the Company's position
would be supported and the matter closed;
Instant Saver: The instant saver product had been launched
and a positive reaction had been received. Over 600 events
had been organised to promote the product.
MARKETING & DIRECT SALES POLB(06)21
BANKING & FINANCIAL SERVICES POLB(06)22
The Board noted the report-and in addition that:
ATM Strategy: 20 Post Office® / Bank of Ireland free ATMs
had now been installed. Bank of Ireland were still
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In Strictest Confidence.
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POLBO06/27
POLB06/28
(a)
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experiencing problems with BT in terms of communication
lines, although the target for the end of the year was still 75.
An issue.concerning the branding of the ATMs had meantit .
had not been possible to provide much publicity to the
launch.
OPERATIONS REPORT POLB(06)23
The Board noted the. report, and in addition that:
Cash Services: Negotiations continued around exiting . I
unprofitable activities. The Have Your Say score for Cash
Services had increased to 65%, but it was thought that this
could decrease if the issue was balloted. VSS was being
considered on a depot by depot basis. lan Anderson and
Tony McCarthy were providing advice as necessary;
Network Resilience: Software to enable network
improvements was now in advanced stages of testing and
was on track for deployment in April. Prolonged loss of
network connectivity in individual branches continued on a
downward trend.
HUMAN RESOURCES REPORT POLB(06)24
The Board noted the report.and in addition that:
Have Your Say: Work was in progress on the revision of the
Agents’ survey. This would launch in the first quarter of
2006-07. Analysis of Cash Services figures was needed to
determine the statistical significance (or otherwise) of the
steady rise in results. The Directly Managed Branches,
which were the cause for most concern, required the
heaviest engagement and advice to assist in turning around
their scores. This had been planned for the first quarter of'
2006. HYS-related interventions in certain administration
units (e.g. IT and Marketing) offered the basis for reviewing
Improvement Planning and engagement across other such
teams: this'would be researched, and workable options
cascaded later in the:year;
[A ballots for London North and Thornaby: Both ballots
closed on 1 February. Despite extensive engagement
activity to win the ballot both ballots were comfortably in
favour of Industrial Action. Industrial Action was likely to be
on 13 February. Contingency planning was in place to
minimise disruption. Mary Fagan had been linked in to
provide appropriate PR support.
SEALINGS POLB(06)25
The diréctors approved the affixing of-the common seal of
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In Strictest Confidence
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the Company to the documents set out against item number
01/06 and 47/06 inclusive in the seal register;
(by the directors agreed the amendment to the list of authorised
signatories to Neil David Owen, Andrew Philip Poole.and
Elizabeth Paterson Schumann.
POLB06/29 CLOSE
(a) There being no further business, the meeting was closed.
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