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Rachel Scarrabelotti
Company Secretary
Finsbury Dials
20 Finsbury Street
London
EC2Y 9AQ
PRIVATE AND CONFIDENTIAL
Lorna Gratton
UKGI
1 Victoria Street
Westminster
London
SW1H OET
11 May 2023
Dear Lorna,
Letter of appointment
Following confirmation of consent from the Special Shareholder (as defined in the
Company's articles of association, as amended from time to time (“Articles”)),
the Board of Directors (“Board”) of Post Office Limited (“Company”) approved
your appointment as the representative on the Board for the Secretary of State
for Business, Energy and Industrial Strategy(“Secretary of State") by written
resolution on 6 April 2023.
This letter sets out the terms of your appointment as a Non-Executive Director
(“NED”) of the Company and sets out the only payments you will receive for
performing your duties.
This letter is a contract for services and is not a contract of employment and in
signing you are confirming that you are not subject to any restrictions which
prevent you from holding office as a director or from joining the Company in the
capacity envisaged in this letter (including without limitation any non-competition
restrictive covenant).
1. APPOINTMENT
1.1 Subject to the remaining provisions of this letter, your appointment
commences on 12 May 2023. You may resign this appointment by
giving three months’ written notice to the Chairman and to the
Secretary of State. If you have given written notice, the Chairman
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1.2
1.3
1.4
1.5
1.6
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and the Secretary of State may, at their absolute discretion, elect to
terminate your appointment earlier than the expiry of your notice
period. Your appointment can be terminated by the Company giving
three months’ notice to you.
Your appointment as a NED is made on behalf of the Secretary of
State, but in all other respects is subject to the provisions of the
Companies Act 2006, the Articles and the governance framework for
the Company (as updated from time to time) in the same way as
other directors. Nothing in this letter shall be taken to exclude or vary
the terms of the Articles as they apply to you as a director of the
Company.
As the NED appointed by the Special Shareholder to represent the
Secretary of State's interests, it is for the Secretary of State to
determine your period of appointment; however, the duties that
apply to directors shall apply equally to you as a director of POL.
Continuation of your appointment is contingent on your continued
satisfactory performance and any relevant statutory provisions
relating to removal of a director. If you are retired from office or your
office of director is otherwise vacated under the Articles, your
appointment shall terminate automatically, with immediate effect and
without compensation.
You may be required to serve on one or more Board committees from
time to time. On commencement you will be appointed to serve on
the Company’s Historical Remediation Committee, the Nominations
Committee, the Remuneration Committee, and the Audit, Risk and
Compliance Committee. You will be provided with the relevant terms
of reference as part of your induction materials.
Notwithstanding paragraph 1.1 to paragraph 1.5, the Company may
terminate your appointment with immediate effect if you have:
a) committed a material breach of your obligations under this
letter;
b) committed any, serious or repeated breach or non-observance
of your obligations to the Company (which include an obligation
not to breach your statutory, fiduciary or common law duties);
c) been guilty of any fraud or dishonesty or acted in any manner
which, in the Company’s opinion, brings or is likely to bring you
or the Company into disrepute or is materially adverse to the
Company's interests;
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d) been convicted of an arrestable criminal offence (other than a
road traffic offence for which a fine or non-custodial penalty is
imposed);
e) been declared bankrupt or have made an arrangement with or
for the benefit of your creditors; or if you have a county court
administration order mcide against you under the County
Courts Act 1984;
f) been disqualified from acting as a director; or
g) not complied with the Company's anti-corruption and bribery
policy and procedures or the Bribery Act 2010, or the Company’s
Protecting Personal Data Policy. For copies of the
aforementioned policies, please contact the Company Secretary.
1.7 The rights of the Company under paragraph 1.6 are without prejudice
to any other rights that the Company may have at law to terminate
the appointment or to accept breach of the terms of this letter on
your part as having brought the appointment to an end. Any delay
by the Company in exercising its rights to terminate shall not
constitute a waiver of these rights.
1.8 Should the Company be dissolved, restructured or wound up during
the period of your appointment in respect of the Company, the
appointment would, of course, also cease with effect from that
dissolution or such other date as is specified in any relevant
legislation.
1.9 On termination of your appointment, you shall, at the Company’s
request, resign from your office as an independent Non-Executive
Director of the Company and any offices you hold in any Group
Companies.
1.10 If matters arise which cause you concern about your role, you should
discuss these matters with the Chairman or Chief Executive. If you
have any concerns which cannot be resolved, and you choose to
resign for that, or any other, reason, you should provide an
appropriate written statement to the Chief Executive or the Senior
Independent Director for circulation to the Board. As the appointee
of the Special Shareholder you are also required to tender your
resignation to the Secretary of State.
2. TIME COMMITMENT
2.1 You will be expected to devote such time as is necessary for the
proper performance of your duties as a director. Overall we anticipate
that you will spend a minimum of 2 days a month on work for the
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2.2
2.3
2.4
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Company after the induction phase referred to in paragraph 8. This
will include attendance at eight scheduled Board meetings per year,
one annual Board away day event a year (which may span over two
days), at least one site visit a year, Board dinners, meetings forming
part of the Board evaluation process, meetings of the committees on
which you serve and training meetings. In addition, you will be
required to consider all relevant papers before each meeting. Unless
urgent and unavoidable circumstances prevent you from doing so, it
is expected that you will attend such of the meetings outlined in this
Paragraph as may be required.
The nature of the role makes it impossible to be specific about the
maximum time commitment. You may be required to devote
additional time to the Company in respect of preparation time and ad
hoc matters which may arise and particularly when the Company is
undergoing a period of increased activity. At certain times it may be
necessary to convene additional Board or committee meetings.
The overall time commitment stated in paragraph 2.1 will increase if
you become a member of any other committees.
By accepting this appointment, you confirm that, taking into account
all of your other commitments, you are able to allocate sufficient time
to the Company to discharge your responsibilities effectively. You
should obtain the agreement of the Chairman before accepting
additional commitments that might affect the time you are able to
devote to your role as NED of the Company.
ROLE AND DUTIES
3.1
The Board as a whole is collectively responsible for the success of the
Company. The Board's role is to:
a) provide entrepreneurial leadership of the Company within a
framework of prudent and effective controls which enable risk
to be assessed and managed;
b) set the Company's strategic aims, ensure that the necessary
financial and human resources are in place for the Company to
meet its objectives, and review management performance; and
c) set the company’s values and standards and ensure that its
obligations to its shareholders and others are understood and
met.
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3.2
3.3
3.4
3.5
3.6
3.7
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As a NED you shall have the same general legal responsibilities to the
Company as any other director. You are expected to perform your
duties (whether statutory, fiduciary or common law) faithfully,
diligently and to a standard commensurate with the functions of your
role and your knowledge, skills and experience.
You shall exercise your powers in your role as a NED having regard
to relevant obligations under prevailing law and regulation, including
the Companies Act 2006 and the UK Corporate Governance Code and
associated guidance.
You shall have particular regard to the general duties of directors in
Part 10 of the Companies Act 2006, including the duty to promote
the success of the Company under which all directors must act in the
way they consider, in good faith, would be most likely to promote the
success of the Company for the benefit of its members as a whole.
In doing so, as a director, you must have regard (among other
matters) to:
a) the likely consequences of any decision in the long term;
b) the interests of the Company's employees;
c) the need to foster the Company's business relationships with
suppliers, customers and others;
d) the impact of the Company's operations on the community and
the environment;
e) the desirability of the Company maintaining a reputation for
high standards of business conduct; and
f) the need to act fairly as between the members of the Company.
You shall have particular regard to the Financial Reporting Council's
UK Corporate Governance Code and associated Guidance on Board
Effectiveness in respect of the role of the Board and the role of the
non-executive director.
You shall have regard to the principles set out in relevant sections of
guidance documents set out in Framework Agreements agreed
between the parties from time to time, currently listed in Appendix 2
of the Company’s ‘Shareholder Relationship Framework Document’.
In your role as a non-executive director, you shall also be required
to:
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a)
b)
qd)
e)
f)
9)
h)
i)
k)
m
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constructively challenge and help develop proposals on
strategy;
scrutinise the performance of management in meeting agreed
goals and objectives and monitor the reporting of performance;
satisfy yourself of the integrity of financial information and that
financial controls and systems of risk management are robust
and defensible;
be responsible for determining appropriate levels of
remuneration of executive directors and have a prime role in
appointing and, where necessary, removing senior management
and in succession planning;
devote time to developing and refreshing your knowledge and
skills;
uphold high standards of integrity and probity and support the
executive directors in instilling the appropriate culture, values
and behaviours in the boardroom and beyond;
satisfy yourself as to the Company's ongoing and consistent
compliance with any regulatory responsibilities;
insist on receiving high-quality information sufficiently in
advance of Board meetings;
take decisions objectively in the interests of the Company and
not do anything which is harmful to the Company or its
business;
take into account the views of shareholders, including but not
limited to views of the Special Shareholder communicated
annually by way of a letter to the Chair, and other stakeholders
where appropriate;
make sufficient time available to discharge your responsibilities
effectively;
exercise relevant powers under, and abide by, the Articles;
disclose the nature and extent of any direct or indirect interest
you may have in any matter being considered at a Board or
committee meeting and, except as permitted under the Articles
you will not vote on any resolution of the Board, or of one of its
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committees, on any matter where you have any direct or
indirect interest;
n) 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;
0) exercise your power as a director in accordance with the
Company's policies and procedures, internal control framework
and the Bribery Act 2010;
Pp) not do anything that would cause you to be disqualified from
acting as a director; and
q) have regard to Framework Agreements entered into with the
Special Shareholder from time to time.
3.8 In addition to your role as a Non-Executive Director, you will have
additional responsibilities in your role on the committees referred to
at paragraph 1.5. You will be provided with further details and copies
of the relevant terms of reference as part of your induction materials.
3.9 Unless the Board specifically authorises you to do so, you shall not
enter into any legal or other commitment or contract on behalf of the
Company.
3.10 You shall be entitled to request all relevant information about the
Company's affairs as is reasonably necessary to enable you to
discharge your duties.
REMUNERATION AND EXPENSES
4.1 You will not be paid a fee for this role. Accordingly, no remuneration
or other benefits will be provided and you will not participate in any
of the Company’s remuneration or benefit programmes,
arrangements, schemes or plans.
4.2 The Company shall reimburse you for all reasonable and properly
documented expenses that you incur in performing the duties of your
office. The procedure and other guidance in respect of expense claims
is available from the Company Secretary.
4.3 On termination of your appointment, you shall only be entitled to
reimbursement in the normal way of any expenses properly incurred
before that date.
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5. INDEPENDENT PROFESSIONAL ADVICE
5.1
In some circumstances you may consider that you need professional
advice in the furtherance of your duties as a director and it may be
appropriate for you to seek advice from independent advisers at the
Company's expense. A copy of the Board’s agreed procedure under
which directors may obtain such independent advice is available from
the Company Secretary. The Company shall reimburse the
reasonable cost of expenditure incurred by you in accordance with
the Company’s Conflicts of Interest Policy a copy of which can be
requested from the Company Secretary. Please note that the
Company will not cover the cost of advice for you in a personal
capacity but only in relation to the performance of your role as a Non-
Executive Director.
6. OUTSIDE INTERESTS
6.1
6.2
6.3
6.4
You have already disclosed to the Board the commitments you have
outside your role in the Company. You must inform the Chief
Executive in advance of any changes to these commitments. In
certain circumstances, you may have to seek the Board's agreement
before accepting further commitments which either might give rise to
a conflict of interest or a conflict with any of your duties to the
Company, or which might impact on the time that you are able to
devote to your role at the Company.
It is accepted and acknowledged that you have business interests
other than those of the Company and have declared any conflicts that
are apparent at present. If you become aware of any further potential
or actual conflict of interest, these should be disclosed to the
Chairman and Company Secretary as soon as you become aware of
them and you must agree with them any steps or protocols
necessary to prevent, minimise or mitigate the risk of such conflict of
interest, which may include recusing yourself from meetings or parts
of meetings of the Board, agreeing not to receive information on
specific topics or agreeing not to participate in Board discussions or
vote in relation to specific topics.
All information on potential conflicts of interest will be held by the
Company and could be disclosed to the public under the Freedom of
Information Act 2000. In entering into this agreement and accepting
this appointment you thereby consent to this disclosure.
You are expected to ensure that any acceptance of gifts and
hospitality can stand up to public scrutiny. Gifts should be declined
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wherever possible, and any offers should be reported to the Company
Secretary.
7. CONFIDENTIALITY
7A
7.2
7.3
You acknowledge that all information acquired during your
appointment is confidential to the Company and/or any Group
Company and should not be released, communicated or disclosed to
third parties or used for any reason other than in the interests of the
Company and/or any Group Company, either during your
appointment or following termination (by whatever means), without
prior clearance from the Chief Executive. This restriction shall cease
to apply to any confidential information which may (other than by
reason of your breach) become available to the public generally.
You acknowledge the need to hold and retain Company and any
Group Company information (in whatever format you may receive it)
under appropriately secure conditions.
Nothing in this paragraph shall prevent you from:
a) making any disclosure of information to Ministers, their officials,
UK Government Investments Limited ("UKGI"), their
professional advisers, Parliament, parliamentary committees,
the National Audit Office, or any other relevant body which
audits public bodies, to the extent that disclosure occurs in the
course of your employment at UKGI (including, but not limited
to, this appointment) or is otherwise reasonably necessary;
b) making any disclosure of confidential information which has
been authorised in writing in advance by the Chair;
c) making any disclosure of confidential information which is
required by law;
d) making any protected disclosure within the meaning of section
43A of the Employment Rights Act 1996 (provided that the
disclosure is made in accordance with the provisions of that Act
and you have complied with the Company’s policy from time to
time in force regarding such disclosures);
e) reporting a suspected criminal offence to the police or any law
enforcement agency or co-operating with the police or any law
enforcement agency regarding a criminal investigation or
prosecution;
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10.
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f) complying with an order from a court or tribunal to disclose or
give evidence;
g) doing or saying anything that is required by HMRC or a
regulator, ombudsman or supervisory authority;
h) making a disclosure of relevant confidential information to, or
co-operating with any investigation by, HMRC or a regulator,
ombudsman or supervisory authority regarding any misconduct,
wrongdoing or breach of regulatory requirements; or
i) disclosing information to HMRC for the purposes of establishing
and paying (or recouping) tax and National Insurance liabilities
arising from your appointment or its termination.
The Company acknowledges that, as a consequence of your
employment with UKGI, you may come into the possession of
commercially sensitive information or policy information that you are
not able to disclose to external third parties, including the Company.
In circumstances where you consider that the knowledge or receipt
of such information could affect your ability to comply with your
duties as a non-executive member of the board of the Company, you
agree to notify the Board as soon as practicable and to take
appropriate steps, including, but not limited to, agreeing to recuse
yourself from relevant decision-making processes.
TRAINING
8.1
On an ongoing basis, the Company will arrange for you to develop
and refresh your skills and knowledge in areas which are mutually
identified as being likely to be required, or of benefit to you, in
carrying out your duties effectively. You should try to make yourself
available for any relevant training sessions which may be organized
for the Board.
REVIEW PROCESS
91
The performance of the whole Board and its committees is evaluated
annually. If, in the interim, there are any matters which cause you
concern you should discuss them with the Chairman as soon as you
can.
INSURANCE AND INDEMNITY
10.1
The Company has directors’ and officers’ liability insurance and it
intends to maintain such cover for the full term of your appointment.
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10.2
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The indemnity limit is £60m (current at the date of this letter). A copy
of the policy document is available from the Company Secretary.
In addition, a deed of indemnity is in place for the directors, providing
an alternative to relying on or claiming against the Directors’ and
Officers’ Policy, if for any reason there was a failure to renew a D&O
policy, insufficient cover or general issues in getting an insurer to
pay. The procedure for the Board in relation to the indemnity is
available from the Company Secretary.
11. CHANGES TO PERSONAL DETAILS
11.1
You shall advise the Company Secretary promptly of any change in
your address or other personal contact details.
12. RETURN OF PROPERTY
12.1
On termination of your appointment with the Company however
arising, or at any time at the Board's request, you shall immediately
return to the Company all documents, records, papers or other
Property belonging to the Company which may be in your possession
or under your control, and which relate in any way to the Company's
business affairs and you shall not retain any copies thereof. For the
avoidance of doubt, there shall be no requirement to return, retrieve
or destroy any documents, records, papers or other property
belonging to the Company which have been transferred to the Special
Shareholder or UKGI prior to the termination of your appointment
with the Company.
13. MORAL RIGHTS
13.1
You hereby irrevocably waive any moral rights in all works prepared
by you, in the provision of your services to the Company, to which
you are now or may at any future time be entitled under Chapter IV
of the Copyright Designs and Patents Act 1988 or any similar
provisions of law in any jurisdiction, including (but without limitation)
the right to be identified, the right of integrity and the right against
false attribution, and agree not to institute, support, maintain or
permit any action or claim to the effect that any treatment,
exploitation or use of such works or other materials, infringes your
moral rights.
14, POST-TERMINATION RESTRICTION
14.1
By countersignature of this letter you agree that, in order to protect
the confidential information, trade secrets and business connections
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of the Company to which you have access as a result of your
appointment, you will not (without the previous consent in writing of
the Company (such consent not to be unreasonably withheld) and
the Secretary of State), for the period of six months immediately after
the termination of your appointment, whether as principal or agent
and whether alone or jointly with, or as a director, manager, partner,
shareholder, employee consultant of, any other person, (carry on or
be engaged, concerned or interested in any business which is
substantially similar to or which is (or intends to be) in competition
with any business being carried on by the Company or any Group
Company with which you were involved or had material management
or strategic oversight in the 12 months prior to the termination of
your appointment (other than in a de minimis way).
15. DATA PROTECTION
15.1 By signing this letter you acknowledge that the Company (and where
relevant its Group Companies) may hold and process data about you for
legal, personnel, administrative and management purposes in connection
with your appointment. Your personal data will be processed by the
Company in accordance with any relevant policies in place from time to
time. You acknowledge that this processing will or may involve the
Company processing special categories of your personal data (being those
categories of data as set out in Article 9(1) of the General Data Protection
Regulation 2016/679 ("GDPR")) and/or personal data relating to criminal
convictions and offences (as set out in Article 10 of the GDPR). This may
include (without limitation):
(a) information about your physical or mental health or condition in
order to monitor sickness-related absence and take decisions as to
your fitness to perform your duties;
(b) your racial or ethnic origin or religious or similar beliefs in order to
monitor compliance with equal opportunities legislation; or
(c) information relating to any criminal proceedings in which you have
been involved for insurance purposes and in order to comply with
legal requirements and obligations to third parties.
15.2 You acknowledge that the Company may make such information available
to Group Companies, those who provide products or services to the
Company (such as advisers and payroll administrators), regulatory
authorities, governmental or quasi-governmental organisations and
potential (or actual) purchasers of all or part of the Company.
15.3. When handling personal data in connection with your appointment by the
Company on the terms of this letter, you shall comply with the Company's
Protecting Personal Data Policy. A copy of the Company’s Protecting
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16.
17.
18.
19.
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Personal Data Policy is available on the Post Office Intranet or by request
from our Data Protection Officer. Post Office may change its Protecting
Personal Data Policy at any time and you will be notified through the
appropriate channels.
For more information, please contact our Data Protection Officer by sending
an email to data.protection,
THIRD PARTY RIGHTS
16.1 No one other than you and the Company shall have any rights to
enforce the terms of this letter.
ENTIRE AGREEMENT
17.1 This letter constitutes the entire terms and conditions of your
appointment and supersedes and extinguishes all previous
agreements, promises, assurances, warranties, representations and
understanding between you and the Company; whether written or
oral, relating to its subject matter.
17.2. You agree that you shall have no remedies in respect of any
representation, assurance or warranty (whether made innocently or
negligently) that is not set out in this letter and you shall not have
any claim for innocent or negligent misrepresentation or negligent
misstatement based on any statement in this letter.
VARIATION
18.1 No variation of this letter shall be effective unless it is in writing and
signed by you and the Company (or respective authorised
representatives).
GOVERNING LAW AND JURISDICTION
19.1. Your appointment with the Company and any dispute or claim arising
out of or in connection with it or its subject matter or formation
(including non-contractual disputes or claims) shall be governed by
and construed in accordance with the law of England and Wales and
you and the Company irrevocably agree that the courts of England
and Wales shall have exclusive jurisdiction to settle any dispute or
claim that arises out of or in connection with this appointment or its
subject matter or formation (including non-contractual disputes or
claims).
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20. GENERAL
20.1 For the purposes of this letter the following words and expressions
shall have the following meanings:
"Group" means together the Company, any holding company or
parent undertaking of the Company and any subsidiary or subsidiary
undertaking of the Company or of any such holding company or
parent undertaking from time to time, in each case as each as defined
in the Companies Act 2006; and
"Group Company" means any member of the Group, other than the
Company, from time to time.
Please indicate your acceptance of these terms by signing and returning to the
attached copy of this letter to me.
Yours sincerely
Rachel Scarrabelotti (Company Secretary)
For and on behalf of Post Office Limited
I agree to the above terms of my appointment as Non-Executive Director of Post
Office Limited as set out in this letter.
Signed on 11/05/2023
Lorna Gratton
Non-Executive Director
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