POLB(11)5"
POLB11/23-37
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Post Office Limited — Strictly Confidential
Post Office Limited
(company no. 2154540)
Minutes of the meeting of the Board of Directors
held at 148 Old Street, London EC1V 9HQ on 4" July 2011
Present:
Donald Brydon
Matthew Lester
Les Owen
(by telephone
Items 11/23-29)
Paula Vennells
In attendance:
Susan Crichton
Sarah Hall
Alwen Lyons
Jon Millidge
Martin Moran
POLB11/23
POLB11/24
ACTION
Alwen Lyons
ACTION
Susan Crichton
(a)
(b)
(a)
(b)
(c)
Chairman, Royal Mail Holdings pic
Chief Finance Officer, Royal Mail Group
Non Executive Director, Royal Mail Holdings plc
Managing Director, Post Office Ltd
Company Secretary, Post Office Ltd (resigned at meeting)
Financial Controller, Post Office Ltd
Company Secretary, Post Office Ltd (ratified at meeting)
Company Secretary, Royal Mail Group
Commercial Director, Post Office Ltd
MINUTES OF PREVIOUS MEETINGS
The minutes of the meeting of 9 May 2011 were agreed;
the minutes of the meeting of 27 May 2011 were amended:
POLB11/2(c) to delete “would include representation for the
auditors” with this amendment the minutes were agreed;
the minutes of the POFS/FRES Board, the Accounts Sub-
Committee (15 June), POL Board (14 March), POL Board (17 May)
were all noted.
MATTERS ARISING
The Chairman updated the Board on the appointment of the new
Chairman, which would hopefully be concluded by the end of the
week, as they were in the last stages of the process;
the Board noted the resignation of Mike Moores and David Smith
and the Chairman asked for all necessary paperwork to be
completed;
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POLB11/25
ACTION
Paula Vennells
ACTION:
Paula Vennells
POLB11/26
ACTION:
Martin Moran
ACTION:
Nick Kennett
POLB11/27
ACTION:
Jon Millidge
(a)
(b)
(a)
(b)
(c)
(d)
(e)
(a)
(b)
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HEALTH & SAFETY REPORT
The Board noted the report and asked for benchmarking statistics
and commentary to be included in future reports. The Chairman
asked that we ensure the benchmarking is relevant. Paula Vennells
assured the Board that it was robust with supply chain using the
Cash in Transit industry benchmark;
the Board asked for more details at the next meeting.
STATUS REPORT — ACTION UPDATE
POL11/9(b) — Irish Government guarantee
Paula Vennells updated the Board that there appeared to have
been no loss of confidence following the change in the Irish
Government guarantee. Existing customers had been sent a letter
over a year ago when the changes were known and new customers
had different terms and conditions highlighted when they purchased
the products;
the Chairman asked if there was any evidence of customers
reducing their balances to below the new threshold;
POLB11/13(e)
Les Owen clarified that he had been available for interviewing
Financial Services Director applicants — but had withdrawn from the
interviews because of personal knowledge of one of the candidates;
the Board was notified that Nick Kennett has been appointed and
will start on 17 July 2011. The Chairman invited Nick Kennett to the
next Board meeting to give an overview of his first impressions of
the Financial Services Business;
POLB11/16(b)
the Board noted the Travel Money Card paper and Martin Moran
explained that the new Travel Money Card could be used to replace
existing products such as the Postal Order as part of a wider pre-
paid card strategy. The new card was chip and pin enabled and
this was why the new card was not provided by the Bank of Ireland
as they did not have the appetite to invest in the new technology.
MANAGING DIRECTOR’S UPDATE
Paula Vennells advised the Board that Supply Chain negotiations
were ongoing. The business had written to colleagues to advise
them of the offer and had set up processes to get their feedback.
The CWU may undertake a “consultative” ballot;
Matthew Lester asked for a matrix of all the pay negotiations across
the Group to be pulled together. Jon Millidge agreed to ask Peter
Walls to undertake the exercise in time for the September Board.
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ACTION:
Alwen Lyons
ACTION:
Alwen Lyons
ACTION:
Susan Crichton
ACTION:
Jon Millidge
ACTION:
Paula Vennells
ACTION:
Mike Young
ACTION:
Kevin Gilliland
(d)
(e)
(f)
(9)
(h)
()
(k)
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The Chairman agreed that this would be helpful to look at the risk of
arbitrage;
Paula Vennells confirmed that Chris Day would be joining the
Business as CFO on 1 August. The Chairman asked that he be
formally appointed to the Board at the meeting if the FSA point was
covered (POLB11/24(c);
the new Director of Insurance for POFS — Rob Clark, would be
invited to present a report on insurance at the October Board;
Les Owen queried the reporting structure asking if Rob Clark should
report to the Financial Services Director of POL. Paula Vennells
explained that the future structure was part of the negotiations
which were ongoing;
Consumer Credit Licence:
Technology: Paula Vennells confirmed that the new POL IT Audit &
Control Board would pick up all the issues and actions from the
SAS70 audit and that Ernst & Young were not sitting on the Board.
Matthew Lester asked if the Audit picked up other systems as well
as Horizon. Paula Vennells explained that when the issue came to
the last POL Board and the RM ARC it referenced other Group
systems as well as Horizon. Jon Millidge to ensure Alex Smith is
aware;
Matthew Lester asked that they also pick up the Separation issues
for technology. Les Owen emphasised that the advantage of
asking Fujitsu to comply with SAS70 audits meant that we could
rely on those reports. The Board discussed the best way to engage
with Fujitsu. Paula Vennells explained that she was meeting them
and would raise the issue;
a detailed technology paper to cover these issues to be presented
at the next POL Board meeting;
Network Development: the Board was advised that the Pilots were
progressing although there were some issues with the NFSP who
were unhappy with the transition agreements and compensation
being offered. Paula Vennells suggested that the Board is updated
on the Network Transformation programme at the next meeting;
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ACTION:
Paula Vennells
POLB11/28
POLB11/29
ACTION:
Martin Moran
ACTION:
Martin Moran
POLB11/30
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(I) the launch of “The Post Office Story” has already produced some
good feedback. There could be a problem with measuring the
effect on colleague engagement and satisfaction as the new Group
baseline is not due until September, and the POL programme will
have been running for 6 months by then. The Chairman suggested
Paula Vennells discuss the issue with RM CEO to try to find a more
effective solution, as this needs to feed into objectives;
(m) NS&l Update: Martin Moran confirmed that NS&I are withdrawing all
products except Premium Bonds from POL. (Premium Bonds
account for 80% of sales.)
(a)
(b)
(a)
(b)
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Action: I
Martin Moran
Irrelevant
(c;
POLB11/31 SEPARATION WORKPLAN
(a) The Board noted the timeline and milestones for POL Separation;
(b) the Board noted the risks in the plan. The Chairman explained that
in the negotiations, if the parties did not agree on an issue, the
governance was to take that to POL MD and RMG CEO and if
agreement was still not reached it would go to the Chairman and
then on to ShEx, if resolution was still not possible;
(c) both the Chairman and the Managing Director stated no such issue
had arisen to date.
POLB11/32 STATE AID
(a) The State Aid paper was noted;
ACTION: (b) it was agreed that POL Board could give approval to the full
Susan Crichton submission electronically as timescales to achieve submission
before the EU Commission summer recess were very tight.
POLB11/33 PROJECT EAGLE UPDATE
(a) Martin Moran explained that there were two issues outstanding; the
on-going income from POFS products and ownership of the
insurance business;
(b) the work will be ready for the Board to consider at the September
Board;
ACTION: (c) I the Chairman is meeting Des Crowley next week. Martin Moran to
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Martin Moran
ACTION:
Martin Moran
POLB11/34
ACTION:
Paula Vennells
POLB11/35
ACTION:
Alwen Lyons
ACTION:
Alwen Lyons
ACTION:
Alwen Lyons
POLB11/36
ACTION:
Martin Moran
POLB11/37
(d)
(a)
(b)
(c)
(a)
(b)
(c)
(a)
(b)
(c)
(a)
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provide a paper with key messages;
the Board agreed that the new Financial Services Director and CFO
need to be engaged with the work as soon as they joins the
Business.
PAY NEGOTIATIONS (SLP & MANAGERS)
The Chairman emphasised that the pay remit needed the approval
of RMG CEO — to ensure it is aligned with Group strategy;
the Board approved the remit subject to the above;
the Board appointed Paula Vennells and Matthew Lester as the
sub-group should the mandate need revisiting.
POST OFFICE LIMITED - COMPANY SECRETARY
The Board noted the resignation of Susan Crichton as Company
Secretary, with effect from 4 July 2011. The Board approved the
appointment of Alwen Lyons as Company Secretary, with effect
from 4 July 2011;
the Chairman asked for the new Company Secretary to discuss
meeting schedules with the new Chairman. It was suggested that
monthly meetings might be necessary from September this year
moving to seven per year from April 2012;
the new Chairman would be appointed to the Board and elected as
Chairman at the end of the September meeting.
ANY OTHER BUSINESS
The ATM paper was noted. The improved terms were welcomed by
the Board, although the paper would have benefitted from
competitor/market benchmarking. Martin Moran to supply;
the Chairman questioned whether POL was robust enough in
challenging its contracts. Paula Vennells acknowledged that
reports which come to the Board should be validated with market
analysis and benchmarking;
the next Board Meeting to be advised — first two weeks in
September.
CLOSE
There being no other business, the Chairman closed the meeting.
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