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©) GrantThornton
Post Office Limited
Governance review — Final
25 June 2024
2 GrantThornton
For the attention of the Board of Directors
Post Office Limited
100 Wood Street
LONDON EC2V 7ER
25 June 2024
Dear Board members,
In accordance with the Statement of Work dated 12 October 2023, we present our report (the
Report) on the effectiveness of the governance practices at Post Office Limited (POL, the
Company, or you).
The scope of our assignment includes; a review of governance design, procedures and practices
at POL, to identify any gaps and provide considerations as to how they may be bridged in the
context of the wider change programmes unified internally under Project Ethos. The purpose is
also to confirm that practices are in aligned with the role as set out by the Secretary of State for
Business and Trade (the Shareholder or DBT) in the foundational governance documents with
POL, and general comparable good governance practice in the market. Details of our scope and
methodology is set out in Appendix 1.
This overall review does not seek to investigate and comment on any perceived or actual past
failings. It is concerned with establishing whether the current governance approach meets the
appropriate standards and is fit for the future based on the Company's unique position
including; its ownership structure, the requirements to resolve the past, fulfilment of social
purpose, and its strategy, to ensure the interests of its stakeholders are properly served.
Appropriate standards considered for the purposes of this review are, the UK Corporate
Governance Code 2018 (the Code) mapped against the Central Government Code 2011 (the
Government Code), the governing Shareholder documents namely; the Articles of Association
e GrantThornton
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dated December 2022, the Shareholder Framework Document dated March 2020, and the
Funding Agreement dated April 2022, (collectively “the foundational governance documents”), in
addition to good practice as observed from other relevant organisations of similar size and
complexity. Our fleldwork for this assignment concluded on 31 January 2024.
This Report is confidential and has been prepared exclusively for you. To the fullest extent
permitted by law, we do not accept or assume responsibility to anyone other than POL for our
work, our report and other communications, or for any opinions we have formed. We do not
accept any responsibility for any loss or damages arising out of the use of the report by the
addressee for any purpose other than in connection with the scope set out in the Statement of
Work.
We would like to thank you and the various employees and Non-Executive Directors (NEDs)
Involved in this initial piece of work for their commitment in giving their time to provide honest and
Insightful feedback, which has supported the review process.
If there are any matte
Jonathan Housto! I or myself.
Yours sincerely
Crane Marron WLP
‘Sarah Bell
Contents
01 Context and key findings Ou
02 Executive summary — Board priority actions 08
03 Executive summary — Executive priority actions 12
04 Summary findings against the Principles of the 15
UK Code
© GrantThornton
05 Appendices 23
Appendix 1 — Scope and methodology 24
Appendix 2 — BoardClic Board and Leadership Surveys 27
Appendix 3 — Principle 1 - Board Leadership and company 32
purpose
Appendix 4 — Principle 2 - Division of responsibilities 4
Appendix 5 — Principle 3 - Composition, succession a
evaluation
Appendix 6 — Principle & - Audit, risk and internal control
Appendix 7 — Principle 5 - Remune
Appendix 8 — List of interviews conducted
Appendix 9 — List of documents reviewed
Appendix 10 - G
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01 Context and key findings
© GrantThornton
01 Context and key findings
Context and
background
EY
POL is wholly owned by the
Secretary of State for Business
and Trade (the Shareholder, or DBT),
the ownership rights of which are
preserved in the Companys Articles.
of Association.
The relationship between the
Shareholder, its representative,
UK Government Investments Ltd (UKGI),
the Company, and the Shareholder’s
expectations of the Company, are
governed by the Shareholder
Relationship Framework Document
(dated March 2020), the Funding
Agreement, and are further
supplemented by an annual letter from
the Shareholder setting out the
Government's broad objectives for POL.
The above forms what we refer to as the
foundational governance documents.
POL is a commercial retail organisation with
a social purpose. Through a variety of directly
managed branches, Postmaster franchises and
partnerships it provides to the public, via its online
platform and nationwide network of c.11,500
branches, a number of products including mails,
identity verification, government services, travel
and insurance, and banking facilities
POL is required, under the Funding Agreement and
the Shareholder Framework Document, to continue
to support a minimum network of 11,500.
We understand across this estate, roughly! RELEVANT!
IRRELEVANT
One of the longer term aims of Shareholder is for
POL to become financially sustainable, however,
this needs to be reconciled against various
interpretations of POL’s espoused social purpose in
delivering critical infrastructure elements to the UK
community through its wide-reaching network:
“We're here, in person, for the people who rely on
us
Government funding remains critical to the
continuing viability of POL. Funding requirements
are generally negotiated with the Shareholder on a
three-year cycle and appear to be the catalyst for
strategic development within POL, with the current
funding period due to end in March 2025. This
current funding cycle outlines an annual subsidy
requirement of £50 million per annum
The POL 2025 “strategy” and vision is built around
seven key pillars. These pillars are further
synthesised into three key priorities which we
understand inform the operational focus of the
Company, namely; rebuilding trust, transforming
technology, and improving branch profitability.
There are no current unifying metrics which define
the ambition for either the seven key pillars or three
key priorities at a consolidated level. Against this
backdrop:
— there is a continuing Horizon IT Inquiry into the
failings which occurred with the Horizon IT
system at POL, leading to the suspension and
termination of certain sub-postmasters’
contracts and the consequent prosecution and
conviction.
— the operating environment remains extremely
challenging with additional revelations surfacing
as part of the Horizon IT Inquiry, which have
been widely reported in the media. Although
these issues do not form part of the scope of this
review, their impact upon the culture and
running of POL is profound.
— there has been a continued need for additional
government/Shareholder support throughout the
funding cycle in excess of the agreed subsidy,
largely driven by unanticipated costs associated
with the development of the new branch IT
platform (NBIT), the historical remediation of
claims and the support associated with the
Public Inquiry
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there is a government appointed Shareholder
Representative on the POL board, in addition
to two Postmasters (who represent some of
the longest serving Board members which are
due for rotation later this year). All these roles
have the same voting rights and director
fiduciary duty obligations as other POL
Board members.
the National Federation of Sub-Postmasters
(NFSP) released a statement early in 2024
questioning the effectiveness of having
Postmaster nominees sit on the POL Board
for various reasons.
the Chair of the POL Board was removed by
the Shareholder in January 2024.
the reference to Shareholder engagement
and outcomes practically represents a
collated set of views from several government
bodies, which have influence at POL through
the various foundational documents, namely;
UKGI, DBT, Treasury and various Ministers.
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01 Context and key findings
Work in flight
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The past five years have been some of the most challenging in the entire 360+ year existence of POL
+ Since 2019, when a settlement agreement was reached with 555 former or serving Postmasters
against POL, it has been operating year-to-year in crisis mode. There has been much internal and
external scrutiny leading to POL undertaking a number of improvements to systems, processes,
policies and culture to transform aspects of its governance. These have largely been centred on
remediating the position with Postmasters in response to the findings of the High Court (Fraser J.)
+ Over the last few months, since our appointment, POL has driven through further top-down
structural governance improvements to address the issues described above. Ensuring that the
Board and GE are briefed on the operational management and the governance construct of POL.
Noted actions of reference which still need time to bed in include:
— improved leadership capacity at Board and Executive level; with the appointment of Owen
Woodley as Deputy CEO; Karen McEwan, CPO, supported by lan Rudkin, Director of Reward;
Chris Brocklesby, CTO and Kathryn Sherratt, stepping up as interim CFO; and at Board level
‘Amanda Burton, Simon Jeffreys and Andrew Darfoor; all of whom joined the Board as INEDs in
March, April and June 2023 and the creation of two new Board Committees, namely the
Remediation Committee (RC) and the Investment Committee (IC)
the recent simplification of the operating model at executive level to prioritise focus and drive
‘accountability, including a New Leadership Team, with a Strategic Executive Group (SEG) being
formed at its core comprising the CEO, Deputy CEO, Interim CFO, CTO and CPO, and reducing
the number of individualls reporting to the CEO from 12 to 7, with a primary purpose of developing
the future POL strategy
— Improved attention and discipline to areas such as People and Culture (Project Ethos), agendas
(more forward-looking) and minutes (in terms of action remediation)
Whilst the direction of travel is promising, it does not, in our view, address the foundational governance
architecture issues which are ultimately impacting the effectiveness of the governance design
and hierarchy. It is within the context of recent challenges and actions that we focus our comments
‘and recommendations.
e GrantThornton
The accumulated conclusions of this report should not be read to disparage the commitment
of a significant number of individuals both at the Board and within the organisation. This
includes the INEDs, Company secretariat team and Shareholder Representative, all of whom
continue to contribute their time and effort in what is an increasingly challenging
environment, where the business must operate in the past and present, creating more
capacity to address the future in a fast-changing market environment with limited visibility
on the purpose of the organisation and therein funding.
Everyone we met during interviews at all levels of the organisation were well intentioned and
hard-working, devoted to the ideals of what POL can potentially contribute to the economy
and wider society.
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01 Context and key findings
Key findings
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One of the most pressing areas to address to improve the impact of governance design is a purpose/cohesive strategy
at the Group level, which sets direction and ambition.
Overview
POL faces tension stemming from conflicting
objectives, including the dual mandate of serving a
social purpose while maintaining commercial
sustainability, and balancing government ownership
with operation in competitive markets. Navigating
conflicts of interest at the Board, diverse shareholder
‘and government interests, and broader political
‘agendas is further compounded by
the lack of clarity on long-term direction of POL and
funding requirements.
Although a majority of the written policies and
procedures generally align with good practice, their
impact is tactical. The absence of a unifying purpose
and strategy, hinders decision-making and fosters a
culture where it is challenging to hold people to
account.
To priorities efforts, we highlight five key areas to be
addressed.
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‘The lack of a unifying purpose and group-wide strategy between POL and Its Shareholder. POL struggles to establish accountability for d
long-term purpose and strategy, leading to varied interpretations of POL's strategic ambition. This ambiguity raises decision-making costs,
governance impact, and hinders genuine accountability. Additionally, perceived mixed messages from the Shareholder on long-term objectives for POL
contradict foundational governance documents and the ster’s Letter, limiting the Board's ability to add value and hold management account for
performance. The ongoing Horizon IT Inquiry and limited visibility around future funding availability compound these challenges further in terms of capital
prioritisation.
Conflict around the role of the Shareholder versus the Board and breakdown of the relationship. The governance dysfunction at POL stems from confusion over
the roles of the Shareholder and the Board, exacerbated by the presence of a shareholder representative at the Board and inconsistencies in applying the terms
of foundational governance documents in the day-to-day running of POL. This lack of clarity blurs responsibilities and creates misalignment between the
Shareholder and POL, making it difficult to establish accountability. The ongoing Horizon IT Inquiry adds additional concerns and requests for information,
further hinder the relationship. This drvies confusion as to is responsibility for shaping and approving operational aspects such as reward structures and
manifests in a tactical and risk-averse culture and approach to decision-making.
Leadership capacity at POL is currently affected by ongoing and upcoming Board rotations, which inevitably impact leadership cohesion and corporate
memory. Additionally, the lack of detailed succession planning at both Board and Executive levels presents a risk to future operations.
Decision-making forums at Enterprise level lack pace and do not enable accountability. Until December 2023, there were over 100 personnel in the senior
leadership team (LT) with a variety of singular and collective accountabilities, a CEO with 12 direct reports, 12 GE level committees and further innumerable
committees, groups, and forums that resided within the Enterprise levels. This has led to unclear or duplicated remits, limited meeting discipline and decision
output driving many operational decisions up to GE/Board level as a consequence. The significant burden being place on the Board, often due to matters that
should ideally be addressed at a lower level, points to a effectiveness governance issue regarding delegation and escalation protocols below board.
Culture ~ a lack of trust, accountability and performance management. POL is plagued by a pervasive culture of reluctance to make decisions, driven by fear
of public scrutiny, lack of clear accountability, and a reluctance to manage underperformance. This has led to a layering of decision-making forums and a
perception of "them" and “us” within the ownership structure, hindering the ability to make difficult trade-offs and identify leadership capability and capacity
within POL.
These issues highlight the need for; a unifying strategy, greater role clarity through updating foundational governance documents, streamlined decision-making
processes, significant improvements in succession planning and a cultural shift towards accountability and long-term planning.
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O02 Executive summary — Board priority actions
© GrantThornton
02 Executive summary ~ Boa
The resolution of the following Issues are
essential for POL to address the current
weaknesses In the governance structure
+ A-Establishing a Group
strategy/ambition for POL to frame,
prioritise, and guide governance design,
decision-making structures, and inform
culture and performance management.
B - Clarity on the role of the Shareholder
versus the Board including the setting of
objectives for POL.
C - People agenda including succession
planning at Board and Enterprise level.
D - Board meeting team process —
agendas, MI and minutes.
Ultimately If POL cannot govern Its
businesses to a level akin to Its competitors,
It needs to provide/gain more clarity as to
the value of Its social purpose longer term.
Board priority actions
A- Group strategy / ambition to be considered because... The Board to...
POL's vision for 2025 is expressed in several themes that are not directly measurable and do
not represent a recognised unitary purpose or strategy/ ambition - this is critical in informing
the effectiveness of governance design.
‘The Business Unit level strategy at POL is generally clear. However, a lack of visibility of a
framework/consistent understanding of ‘trade-offs’ at the centre, and connectivity across
business, leads to a high cost of indecision.
B - Clarity on the roles of the shareholder versus the Board because.
The leadership and followership based on the Shareholder requirements at POL are complex
due to the crisis situation and the involvement of the Shareholder Representative at the
Board, who is a Director of POL. The role is one of insights by bringing a government
perspective to aid the POL Board’s decision-making, rather than directing actions and
decision-making on behalf of the Shareholder. In doing so, the Shareholder Representative
also participates in equal collective decision-making around the Board table.
This creates tension at Board between governing for Shareholder value and governing for
social purpose, without a clear longer-term vision to balance these priorities effectively.
The description in the Framework Agreement does not provide clarity on the Shareholder
Representative role. It appears to be drafted from the viewpoint of UKGI’s ‘representative
director’ and lacks acknowledgment of the same legal fiduciary responsibilities as other
NEDs. The Shareholder Representative appointment letter and the UKGI's opening statement
to the Inquiry provide more clarity in this regard.
Confusion around roles, responsibilities, and authorities arises from the purpose of the
Shareholder Representative role, foundational governance documents, and Matters Reserved
for the Board. As an example although empowered under the Matters Reserved for the Board
to share the longer-term direction of the organisation, the Board appears unable to deliver
‘against this remit.
This lack of clarity extends throughout POL, resulting in high decision-making costs and a
lack of accountability, such as the absence of a shared understanding regarding the roles
and responsibilities.
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Agree strategic design principles with the SEG and explore
steps to unlock the impasse on developing a strategy/
ambition which the leadership team can coalesce around
and frame efforts. As part of this exercise the Board:
+ to clarify whether/how POL takes forward the Minister's
letter of supporting ¢.11,500 branches when shaping
future commercial and social ambitions
frame for the Shareholder what POL is about (purpose),
where it wants to get to (strategy and vision) and how it is
going to meet its aims (culture).
The Board to...
Over the next 12-18 months, it is essential to:
Review and update foundational governance
documentation to enhance clarity, aligning with
connected guidelines such as "Managing Public Money”,
UKG'’s recent statements and clearly defining principles
impacting day-to-day operational approvals between
POL and the Shareholder. Address any disparity and
duplication between the Articles of Association, the
Shareholder Framework Agreement, and Funding
Agreement.
Clarify the achievability of Matters Reserved for the
Board and address any points of contention with the
Shareholder.
Evaluate whether an alternative governance or capital
structure can deliver better outcomes for alll stakeholders,
based on shared objectives and market-wide sentiment.
This will improve clarity around the purpose of the
organisation and the roles of the Board and Shareholder
in shaping key governance frameworks going forward.
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02 Executive Summary — Board actions
Board priority actions
(Continued)
C- People agenda (inc!. Succession planning and reward) to be reviewed as... The Board to.
Urgent attention is needed for succession planning at POL, particularly due to anticipated
rotations at the Board and SEG levels, and the current inability to assess leadership capability
and capacity below the SEG level. The new CPO is leading efforts to support this area.
Key departures and lack of visibility on formal planning for executive roles creates a perceived
weak decision-making directive, and management of corporate memory is a concern.
Gaps in technology, digital transformation, central government/Whitehall expertise, retail
franchise, and turnaround and transformation are listed by members as existing at the
Board/SEG level, posing challenges during critical organisational developments.
Clarity is needed on the ownership between Boards and Committees regarding the People
agenda, and improved monitoring in areas such as culture and wider EDS! aspects is
necessary.
Historical governance issues have impacted reward design and sustainability, necessitating
the rebuilding of trust with stakeholders. The involvement of the former UKGI
NED/Shareholder introduced complexity and uncertainty within Rem Co and the organisation
in terms of reward design and approval. However, the new Chair and UKG! NED/Shareholder
are beginning to address historic points, and attention is being paid addressing the output of
the Simmons & Simmons report in this regard.
Strengthen succession planning at Board and Enterprise level, including formalising Postmaster rotations and
reviewing the selection process. Ensure the Nom Co has the capacity to deliver against its wider ToR.
In terms of Board Composition and Executive Roles, develop a formal plan for key Executive roles and manage
the composition of the Board to maintain a strong decision-making body. In doing this exercise the Board to
agree on key criteria for assessing required composition. Consider the operational horizons of the historic
Horizon IT Inquiry, the continuing transformation to stabilise the operational platform, and the future
strategic options when evaluating and developing the composition of the Board. Furthermore,
— Evaluate and develop the Postmaster NED role and fill skills and experience gaps in technology, digital
transformation, government relations, and franchise expertise.
— Consider the composition of Nom Co committee membership to align with market norms, comprising
the Chairs of the Board and Committees to bring a diverse perspective on the management pipeline.
Build out LED across the Board and Executive leadership, considering strategic priorities, principal risks, and
skills matrices to supplement any succession planning work.
Address governance issues and reward design at Rem Co by addressing historical governance issues
impacting reward philosophy and design. Clarify the role of the Rem Co against the Code and discuss any
mitigating actions around independence of members and review the suitability of LTIPs.
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02
Executive Summary ~ Board actions
Board priority actions
(Continued)
D - Review underlying team processes (Ml, A\
da, minutes etc) to.
Improve transparency, efficiency, and effectiveness. With a relatively new Board
‘and an absence of long-serving corporate memory, clear agendas and MI are
essential for comprehensive debate and action follow-up. Feedback loops must
ensure timely resolution of actions.
Address the impact that poor MI has on the effectiveness of discussion and
decision making at Board (and other decision-making forums) thereby reducing
accountability and effectiveness within POL’s governance hierarchy.
Many comments made around the lack of informal get-togethers and unstructured
dialogue at Board. All comment this format is critical in building trust between
members and driving more efficiency at formal meetings.
Trust is lacking between Board members, exacerbated by the perception that there
‘appears to be a two-tier Board with some NEDs/INEDs excluded from certain
decision-making, which is carried out informally by a sub-group of the Board.
Address a lack of clarity noted through reviews of 12-14 months of
Board/Committee minutes, as to whether actions had been resolved or removed
because of inaction.
The Board to.
+ Overhaul MI with higher-quality papers, simplified and streamlined content. Consider the addition of dashboards for
measurement and insights and the use of training / Al tools. Look at shutting down the reading room in order to drive
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Review rolling agendas to ensure sufficient balance between historical, operational and strategic matters
= Provide greater oversight of the work of Nom Co and Rem Co, with time allocated for full updates and debates on
delivery against ToRs to assess whether elements of the people agenda needs to be picked up at Board
- Consider regular informal get-togethers to allow for unstructured discussion and building of trust and engagement.
more ownership of content in Board papers. Equally empower the Secretariat to reject papers which do not meet
standards for the board and instil the same discipline within the Enterprise governance hierarchy with clearer
‘accountabilities and actions recorded.
Although discipline around actions and feedback loops in minutes has improved more recently with the updates on
‘actions provided for in the Matters Arising Schedule, maintaining this discipline will ensure proper oversight,
‘accountability and delivery (and root cause assessment).
Promote transparency by allowing all NEDs to access content from Board and Committee meetings. Additionally,
evaluate the validity of the two-tier board structure and address concerns about informal decisions being made outside
of the Board to ensure that the purpose and value of the Board debate is not bypassed.
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O3 Executive summary — Executive priority
actions
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03 Executive summary ~ Executh
Executive priority actions
E - Division of responsibilities to be reviewed because... At Enterprise level...
+ The accountability chain for POL is complex and further + Streamline the executive level committees to drive transformation and decision-making.
complicated by no clear purpose and strategy from which This is being addressed through the reorientation around a newly formed SEG to review
to performance manage and prioritise efforts. The web of the subsequent DoA, Committee structures, and identify define leadership roles and assess
stakeholders and their related interests in POL has subsequent leadership capability and capacity thereafter. As part of this exercise consider
influenced an unnecessarily multifaceted governance reorientating some current forums (such as the Health and Safety Committee and the
framework at Enterprise level where resolution to issues has Pensions Plan Governance Group below SEG level) and further reduce the number of
been through layering of Committees and passing direct reports going into the CEO, with a presentation to the Board. Furthermore,
Te decisions up rather than streamlining the accountability = embed new Leadership Team (L7) with performance-bused job descriptions
essential at Entorprise le ri pisses a earifsani eaten on the Board cus ts = implement clear RACI system and focus on performance management
e current weaknesses In the governance ,
structure matters that should ideally be addressed at a lower level. - review the DoA spend approvals to drive relevant decisions being taken at the
Efficient governance structures typically involve a clear appropriate levels, thereby managing and reducing the frequency of simple matters
+ E- Division of responsibilities - simplify delineation of decision-making authority and the delegation escalated to board (1. OPEX approvals)
the delegated authorities reporting up of operational and lower-level issues to appropriate levels
into the SEG within the organisation. When lower-level matters are ~ design ToR and DoA for Committees reporting Into SEG, ensuring single point
. F 4 consistently escalated to the Board, it can impede the accountability.
F - Leadership capacity and succession
Board's ability to focus on strategic oversight and impactful.
Secretariat to provide interim reviews of the revised structures or consider internal audit
decision-making.
lannin
a d reviews to identify root causes of delay within the Sub Committees as they develop.
G - Strategic focus
H- Risk Management F - Strategic direction to be defined because... At Enterprise level...
+ Clarity on strategic design principles is needed within POL + _SEG to agree on strategic design principles with the Board and establish a cadence for
and the SEG to ensure cohesion and accountability as a progress updates. Agree on cultural/leadership principles and hold each other
leadership team in a competitive and transforming market. accountable, and model these in the organisation.
+ There is a need to address leadership capacity within POL *-_~Ensure any strategic design is supported by a culture framework/dashboard with
te beter dafeina tla clerhau andl etoorenabitg, cloves performance management as a key pillar. Consider a refresh of values, aligning with the
y ‘9 ty Us 9 culture framework, and ‘Project Ethos’ work.
the people agenda, addressing skill gaps and rebuilding
collective leadership confidence and capacity, emphasising * Create high-level communication plan with key milestones for POL to signal a wider
performance management, collaboration, ambition, and organisational reset. Consider three themes around the topics of; Reset (governance and
ania leadership), Renew (strategie framework), Reboot (culture and behaviours) and highlight
some expectations / metrics under each.
+ Prioritise fully developed ideas for submission to DBT/the Shareholder on the long term
ambition of POL with a timeline, during annual Strategy days.
03 Executive summary — Executive actions
Executive priority actions
(Ccontinued)
G - Leadership capacity and succession to be reviewed because...
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At Enterprise lev
Limited focus on SEG and LT succession planning poses an operational risk and leadership capability and
capacity below SEG level is not clear. As an example, there is limited thought and focus given to succession
planning around the CEO (and Deputy CEO) and CFO roles.
ric rotation of personnel in the Head of People/CPO role has exacerbated people issues and requires
attention from the Board, Rem Co, Nom Co and the Executive. Although we are encouraged by the work
being undertaken by the new CPO.
There is a need to address concerns around transparency and EDI in recruitment processes.
Urgently address Executive succession planning, including EDSI principles, with input from Nom
Co and SEG. Consider potential strategic skill gaps and succession, potentially introducing a
Chief Operating Officer role.
Seek clarity from the Shareholder on the CFO role and its impact on board resolutions and interim
candidates.
Develop a skills matrix for the LT and job descriptions with performance metrics aligned to the DoA
and governance structure review being undertaken below SEG. Implement wider SEG and
leadership training/communication plan regarding this refresh covering purpose, meeting
discipline, Ml formats and accountability.
Review the recruitment process, addressing concerns and enhancing consistency around EDSI.
Establish clear policies and processes for people management, including role descriptions,
accountabilities, and performance management procedures, which we understand is being driven
by the CPO.
H - Risk management to be enhanced as...
Feedback suggests that while POL has a well-established risk policies and processes and an internal audit
function there is a need to review aspects around the practical application to create a more dynamic and
proactive risk environment, which fosters a culture of accountability and ambition, namel
+ Address the risk-averse culture at POL, it's crucial to review how the control environment contributes to this
dynamic. Overcoming any resistance to change is important to shift the ownership of risk into the business
and away from the second line of defence. This shift will deliver improved outputs and encourage a more
proactive approach to risk management.
+ Elevation of the Risk Function to provide a more prominent role across the business to emphasise the
importance of risk (to include Postmasters and subsidiaries as well) in strategic decision-making,
identifying and seizing opportunities, and optimising the use of capital. This will help integrate risk
considerations into day-to-day operations and strategic planning.
+ On this point the remit of Postmasters' responsibilities should include managing risks as with the rest of the
first line of defence. This should be made clear in relevant risk documentation and through training.
+ There need to address the ARC Papers into a more digestible and practical output to inform better
decision-making within the committees and across POL.
At Enterprise level...
Re-visit the newly introduced changes in reporting lines as far as the risk function is concerned and
consider whether a more appropriate line of reporting should be introduced both from an
independence and elevation level (Ie. moving from General Counsel to CEO)
Invest time in LED programs design to ensure employees in the subsidiaries and Postmasters as well
4s the rest of POL are aware of risk management training, which should be owned by the SEG
setting ‘tone from the top’, giving more prominence to risk management. Individual risk reporting
should be used as a driver for decision-making and subsidiaries and Postmasters should be included.
Improve the articulation and presentation of ARC papers to ensure that risk matters receive
sufficient airtime and debate outside formal reporting and review proposed agendas to ensure
adequate attention to risk matters.
Formalise Risk Appetite and Thresholds; undertake a holistic review to introduce a more structured,
formal approach to setting risk appetite, tolerances, and thresholds, and update the risk register to
clearly stipulate existing/updated risk thresholds. To date, relattively conservative risk appetite
and tolerances have resulted in a number of risks being reported outside of appetite on a continuous
basis.
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O4 Summary findings against
the Principles of the UK Code
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04 Summary findings — the Principles of the UK Code
Summary of progress against Principle 1 of the UK Code
Details on findings on Board Leadership and company purpose included at Appendix 3
We have used the high-level thematics of the UK Code to inform our key observations around priorities
related to leadership direction and capacity, culture and the wider stakeholder environment, and have
provided the same analysis for the other principles overleaf. We would highlight that ratings are also
impacted by circumstances outside of the Board’s control.
* POL is facing challenges in agreeing on strategic design principles, with uncertainty surrounding
how Board Leadership is driving Executive accountability in this regard. There is a lack of ownership
of culture/the people agenda at the Board level and strategy design is influenced by government
funding cycles, hindering long-term planning.
+ The ambiguity in decision-making, from lack of strategic criteria (and poor reporting) creates risks in
resource utilisation. Effective communication with stakeholders is crucial, and simplifying decision-
making structures and reviewing and communicating protocols and accountabilities is necessary
- Both the Board and SEG need to work collectively to unify and drive clarity through culturally
aligned measures of performance.
+ While Business Unit level strategy is clear, there is a lack of visibility on trade-offs at the centre and
connectivity across the business, leading to indecision.
+ The annual and three-year budgeting cycles do not support long-lasting investment schemes
needed for successful delivery of strategic priorities. An overarching, rolling five-to-ten-year funding
facility with shorter budgeting cycles feeding in should be considered for long-term planning.
+ There is a culture of reluctance to make decisions due to fear of scrutiny, lack of clear accountability
and poor management of underperformance. Over reliance on Shareholder input and untimely
agreement of reward structures also impact clarity around prioritisation and performance
management.
+ Trust between Executive and Non-Executive members of the Board is low. Developing a common
‘ambition and improving informal engagement may help. Recent additions to the Board have
however, improved diversity of discussion and outputs.
e GrantThornton
Board Leadership and Company purpo: Rating
A. The company is led by an effective board, who promote the long-term sustainable e
success of the company, generating value for shareholders and contributing to wider
society.
B. The board should establish the company’s purpose, values and strategy, and satisfy e
itself that these and its culture are aligned. All directors must act with integrity, lead by
example and promote the desired culture,
C. The board should ensure that the necessary resources are in place for the company
to meet its objectives and measure performance against them. The board should also e
establish a framework of prudent and effective controls, which enable risk to be
assessed and managed.
D. For the company to meet its responsibilities to shareholders and stakeholders, the
board should ensure effective engagement with, and encourage participation from, e@
these parties.
E, The board should ensure that workforce policies and practices are consistent with the
company's values and support its long-term sustainable success. The workforce should e@
be able to raise any matters of concern.
@ _ Divergence from UK Code principles
@ Areas where standards do not meet all code principles or where there is work in-flight to remedy
@ Areas where Code standards are met or where there are only minor weaknesses
Grant Thomton © 2026 I
04 Summary findings ~ the Principles of the UK Code
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Summary of progress against Principle 2 of the UK Code
Details on findings on Division of responsibilities included at Appendix 4
Board and Shareholder roles and responsibilities need clarification. Also there is a need to redesign
Enterprise-level roles, responsibilities, and authorities — too many operational decisions are coming up
to the CEO, SEG and Board. At Board, division of responsibilities is largely in line with market best
practice although, attention is required to confirm whether Nom Co and Rem Co have the capacity to
deliver against their wider ToR’s.
There is a muddling of responsibilities and conflicts at the Board and confusion around roles,
responsibilities, and authorities, resulting in a high cost of decision-making. This confusion permeates
down the organisation and drives a lack of performance management.
Some views were expressed as to a two-tier Board being in operation, where decisions are taken
outside of the formal structure and without proper debate. Differing levels of visibility on Committee
papers and minutes add to this, with not all NEDs (Ie. only INEDs) having the same ability to access
and read Committee papers and minutes.
Continuous dialogue between POL and UKGI/DBT has developed, creating confusion and cultural and
capability issues. To move forward, a review of foundational governance documents is needed to
sharpen clarity on accountabilities and reduce day-to-day interaction, becoming more ‘arm's length’.
The existing governance structure below the Board is extensive, leading to an “untidy house” at the
Enterprise level and clouding accountability. Simplifying the decision-making structure would improve
effectiveness and transparency. The SEG is in the process of redesigning the decision-making
structure, with illustrative suggestions provided for future structure support.
There is a need to create a more structured approach for rolling agendas, overhaul MI for better Board
discussions, and consider the purpose of the "reading room". Additionally, clarity is needed on whether
actions have been resolved or removed due to inaction, although recent improvements have been
made with the introduction of the Matters Arising Schedule.
Division of responsibilitl
F. The chair leads the board and is responsible for its overaill effectiveness in
irecting the company, demonstrating objective judgement, promoting a culture of
openness and debate. The chair facilitates constructive board relations and the
effective contribution of ensuring that directors receive accurate, timely and clear
information.
G. The board should include an appropriate combination of executive and non-
executive (and, in particular, independent non-executive) directors. No one
individual / small group of individuals dominates the board’s decision-making. There
should be a clear division of responsibilities.
H. Non-executive directors should have sufficient time to meet their board
responsibilities. They should provide constructive challenge, strategic guidance,
offer specialist advice and hold management to account.
I. The board, supported by the company secretary, should ensure that it has the
policies, processes, information, time and resources it needs in order to function
effectively and efficiently.
Rating
@ _ Divergence from UK Code principles
@ Areas where standards do not meet ail code principles or where there is work in-flight to remedy
@ _ Areas where Code standards are met or where there are only minor weaknesses
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0% Summary findings — the Principles of the UK Code
Proposed Executive structure — Jan 2024
Executive Team:
CEO, CFO, Deputy CEO,
CTO, CPO, CRO, Support: ’
CoStatt Implementation Committee
NBIT
(Strategic Platform
Retail Committee Investment
Historical Matters Culture Risk and Transformation
(incl. Property Approvals and
Funding Meeting Coalition Compliance pont Modernisation Davea Osan Board
Committee)
, Post office Pension
Horizon IT Inquiry Ban Oaaeeee eee Technology Improvement
Steering Committee cena Committee Delivery Group
Health and Safety
key: highlight new roles/committees to be considered
Proposed non-GE level committees
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0% Summary findings — the Principles of the UK Code
Proposed further simplified Executive structure
This side dealing with culture, firefighting, ! } CEO This side dealing with sustainabili
noise and historic issues — can be rejigged EA Chief of Staff strategy implementation, provi
depending on remit of CFO/CPO ete. Philippa Hankin Wed) Chrysanthy Pispinis focus on forward looking BaU), and
subsidiary matters
] J I I
cPo Group General Counsel Interim CFO. (Deputy CEO
Karen McEwan Ben Foat Kathryn Sherratt Owen Woodley)
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04 Summary findings ~ the Principles of the UK Code
Summary of progress against Principle 3 of the UK Code
Details on findings on Composition, succession and evaluation included at Appendix 5
+ The sudden departure of the Chair, impending rotations/departures of INEDs, Postmaster NEDs, and the
Deputy CEO, along with the long-term absence of the CFO and inadequate succession planning, have
created a perceived weak directive at a critical time for the business. Corporate memory, skill gaps, and
lack of diversity need careful management. Rapid, focused implementation is needed for the "People"
agenda and related issues, particularly in performance management and accountability, both of which
requires a laser sharp focus.
— anticipated simultaneous/close to each other departures of Postmaster NEDs indicate poor succession
planning and the lack of transparency around senior appointments, which hampers Board discussions
and trust and poses a growing risk within leadership
— urgent recruitment of new Board members with appropriate skills, experience, and alignment with the
current Board is crucial, but may be challenging due to negative public perceptions. The identification
‘and appointment of a Chair is key to informing further recruitments and EDSI efforts
— the current Executive team lacks cohesion, hindering the development of an innovative and sustainable
strategy. The absence of a permanent CFO is causing issues at the Board and operational levels, and
the planned departure of the Deputy CEO requires urgent attention to avoid gaps in the Executive
team. A COO should be the next recruitment focus
— actions taken to address the layering and complexity of Committee structures within the SEG are
promising
— the organisational culture lacks accountability and fails to address poor performance, largely due to a
lack of clarity on strategic priorities, roles, and responsibilities.
— whilst the Board has been diligent in undertaking annual evaluations of its performance, it has been
unable to progress forward on the actions/recommendations which have arisen over the years, many
‘of which are not dissimilar to the findings in this report.
e GrantThornton
Rating
Composition, succession and evaluation
J. Appointments to the board should be subject to a formal, rigorous and transparent
procedure, and an effective succession plan for board and senior management. Both *
appointments and succession plans should be based on merit and objective criteria and,
within this context, should promote EDSI.
K. The board and its committees should have a combination of skills, experience and
knowledge. Consideration should be given to the length of service of the board as a whole e
‘and membership regularly refreshed.
L. Annual evaluation of the board should consider its composition, diversity and how
effectively members work together to achieve objectives. Individual evaluation should e@
demonstrate whether each director continues to contribute effectively.
@ divergence from UK Code principles
© Areas where standards do not meet all code principles or where there is work in-flight to remedy
r ) Areas where Code standards are met or where there are only minor weaknesses
Grant Thomton ©2026 I 20
04 Summary findings ~ the Principles of the UK Code
Summary of progress against Principle 4 of the UK Code
Details on findings on Audit, risk and internal control included at Appendix 6
Based on the feedback and observations about the risk management, governance, risk appetite, risk culture and
internal audit arrangements at POL, several key points and the general control environment, we would make the
following observations:
— uplift the Risk Management Process: The risk management process at POL is relatively well-established, but
further enhancements and uplifts to the risk documentation are needed to ensure that the risk management
arrangements mature. This includes elevating the Central Risk Function across the business to gain necessary
prominence and using risk management as part of improved strategic decisions
— the recent change in the reporting structure aligned the Head of Risk with the General Counsel to address
conflicts of interest. However, recent developments may necessitate reconsideration of this reporting line. It may
be more appropriate for the Head of Risk to report directly to the CEO to ensure independence and prominence
In the current environment.
— there is a risk adverse culture at POL which will require a comprehensive approach to address including,
training, leadership commitment and strategic alignment. Elevating risk in the organisation will support these
steps
— is aneed for improved articulation and presentation of ARC papers to ensure that risk matters receive sufficient
airtime and debate outside formal reporting. The agendas should also be reviewed to ensure that risk matters
receive adequate attention and discussion
— the introduction of the Governance, Risk, and Controls tool, ServiceNow, is a positive development for
‘automating risk reporting. However, a more holistic review should be undertaken to introduce a formal approach
to setting risk appetite, tolerances, and thresholds, aligning the organisation with industry best practices
— considering the specific risk expertise needed, POL should consider appointing new NEDs with specific risk skills
and experience, potentially leading to the separation of the ARC to allow for more focused discussion and a
deeper understanding of risks associated opportunities and controls within areas
— amore formal approach to aligning the risk and controls environment and internal audit across subsidiaries and
Postmasters to be considered to ensure consistent and effective risk management across the entire organisation
— clearly improved articulation around the longer-term purpose and strategy will help improve the impact of the
control environment within POL.
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Audit, risk and internal control
M. The board should establish formal and transparent policies and procedures
to ensure the independence and effectiveness of internal and external audit e
functions and satisfy itself on the integrity of financial and narrative statements.
N. The board should present a fair, balanced and understandable assessment of
the company’s position and prospects. e@
. The board should establish procedures to manage risk, oversee the internal
control framework, and determine the nature and extent of the principal risks
the company is willing to take in order to achieve its long-term strategic r
objectives.
@ __ Divergence from UK Code principles
@® Areas where standards do not meet all code principles or where there is work in-flight to remedy
@ Areas where Code standards are met or where there are only minor weaknesses
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04 Summary findings ~ the Principles of the UK Code
Summary of progress against Principle 5 of the UK Code
Details on findings on Remuneration are included at Appendix 7
Rem Co is actively addressing the urgent issues surrounding historic reward schemes and is
working to reduce complexity and noise under the new Chair. Other points of note:
— clarity is needed regarding governance and accountability around reward design and decision
making between the Enterprise and Rem Co, as well as between Rem Co and the Shareholder.
— Inline with the above Rem Co needs to establish what matters it is seeking to shape and propose
to the Board and where it intends to seek guidance from the Shareholder
— the overall remuneration philosophy needs to be simplified and agreed upon with the
Shareholder. While the remuneration strategy aligns with good practice, practical execution and
historical focus on rewards schemes need attention. Lack of clarity and concerns around
responsibilities and information accuracy have also contributed to decision-making costs and
diminished accountability and effectiveness within the Rem Co and governance hierarchy
— steps are being taken to improve governance policy and procedures, transparency, and trust
within the culture. The people function's capability and capacity need review to ensure timely
and sustainable delivery of changes. There is a need for clear understanding of individual roles
in achieving strategy and accountability across the organisation, supported by reward
— the recent Rem Co meeting addressed a packed agenda, including a robust debate on the
CEO's objectives and incentive plans. The new Chair is eager to implement a more long-term
approach plans, which is seen as positive. Related to that there is a need for a
structured rolling 12-month agenda to focus on effective and timely agreement and
communication of future reward schemes and address wider aspects of Rem Co’s ToR.
e GrantThornton
Remuneration
P., Remuneration policies and practices should be designed to support strategy and promote
long-term sustainable success. Executive remuneration should be aligned to company purpose
and values and be clearly linked to the successful delivery of the company’s long-term
strategy.
Q. A formal and transparent procedure for developing policy on executive remuneration and
determining director and senior management remuneration should be established. No director
should be involved in deciding their own remuneration outcome.
R. Directors should exerci:
independent judgement and discretion when authorising
remuneration outcomes, taking account of company and individual performance, and wider
circumstances.
N/A
@ divergence from UK Code principles
@ Areas wher
@ Areas where Code standards are met or where there are only minor weaknesses
standards do not meet all code principles or where thei
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05 Appendices
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Appendix 1
Scope and methodology
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05 Appendix 1 - Scope and methodology
Scope
The purpose of this review is to gain an understanding of the governance processes and structures within
the company, covering various tiers of management from the Board to the Group Executive, Sub
Committee level, Business Unit level, and other decision-making entities as identified by POL. The review
also aims to assess these processes and structures against industry benchmarks and best practices of
organisations with comparable structures.
Throughout the review, there is a particular focus on how decisions, MI, and policies flow both up and
down the management structure, and whether they support effective decision-making aligned with the
organisation's strategy and governance standards. The practical application of governance structures
and their impact on actions, feedback loops, and decision-making outcomes are also under
consideration.
The conclusions drawn for this report are based on:
— 10 interviews with Board members (excluding the CFO) and 20 interviews with senior executives
— an online survey platform to assess the practical application of governance practices within the
company at both Board and Senior Management levels
attendance at the Rem Co meeting in November 2023
— allimited document review, with a full list of interviews and documentation included in Appendices 10
and 11
Due to the scope and reporting timeframe, the review had to rely on discussions at face value, although
were to reference docume! to form views. The mendations provided should be
considered in this context. The fieldwork for this assignment concluded on 31 January 2024.
@ GrantThornton
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05 Appendix 1- Scope and methodology
Methodology
We have used the themes of the UK Corporate Governance Code (the UK Code) and Central Government Code as
yardsticks in assessing and reporting on the effectiveness of the governance structures
e GrantThornton
We have used the themes of the UK Code to frame our assessment on
the effectiveness of the current governance framework within POL
We believe the UK Code provides a good proxy for measuring
effective decision-making environments as it is widely seen as a
lation of best practices evolved from the UK’s largest, most
‘complex companies that are working to retain and create value on
behalf of stakeholders. We have also had regard to the Central
Government Code
The UK Code is also clear in outlining that good governance is not just
top down. Specifically, companies and their Boards do not just have
obligations and duties to stakeholders, but shareholders also have
mutual duties to not only communicate around objectives but also to
oversee boardroom practices
Where we consider there is no industry equivalent, we suggest
alternative ways in which the Company's current corporate
governance framework could be enhanced and/or revised to better
align with the Company's purpose and strategic objectives with
practices in organisations of a similar size, and who operate in similar
markets and sectors
The UK Code is made up of several Provisions spanning five main
Principles of corporate governance amely: Leadership and Company
Purpose; Division of Responsibilities; Composition, Succession and
Evaluation; Audit, Risk and Internal Control, and Remuneration
The survey formats have been designed with reference to the UK
Code and the Companies Act. Some chapters and questions were
adapted specifically to POL
The surveys allow us to ascertain where there is high and low scoring
around the practical application of governance including,
— where there is alignment and/or misalignment within leadership
functions and/or whether a large spread of responses indicates a
lack of coherence. The survey also provides a benchmark against,
other Board and management teams and allows us within the Board
survey to assess whether there is alignment around prior
In order to test the robustness of our methodology and approach to
measuring strong (and weak) governance, we released a White Paper
in 2019, (Corporate Governance and Company Performance I Grant
Thornton UK LLP), which examined 10 years’ of data (2007-2017) to
assess whether ailink could be demonstrated between good
governance, as measured in the Grant Thornton corporate governance
database, (based on the UK Code), and subsequent financial
performance (taken across a basket of measures from both the
balance sheet and profit and loss statements). As part of this work, we
also sought to test whether the UK Code is a good proxy of
measurement in terms of a blueprint for developing a sound
governance structure
Output from our research across the FTSE 350 found a link between
strong governance and the subsequent creation and retention of value.
Our methodology was validated with several internal and external
stakeholders, including a peer review by Professor Mike Saks, Emeritus
Professor at the University of Suffolk
Our findings, recommendations, views and conclusions are based upon
our professional experience and judgement. This review does not
constitute an audit and we have not tested or otherwise sought to
verify information provided, other than by discussions with senior
management, reference to relevant documentation, and the two online
surveys.
Grant Thomton ©2026 I 26
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Appendix 2
BoardClic Surveys — key findings and
actionable insights
© GrantThornton
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Appendix 2 — Board and Ledtlership SURVeUS
Board survey — governance effectiveness (Oct/Nov 23)
Self-reported overview = from Board members and regular SEG and LT attendees
—— Post Office Ltd Board, Exec, SLG Benchmark
The Graph illustrates the summary of POL respondent scoring against each chapter of EAC ere nchmar
the survey with results benchmarked against 150+ other UK Boards spanning private,
listed and the public sectors. The two lowest scoring areas by POL, which also have the
biggest delta against the benchmark are Talent and Culture and Purpose and Strategy. Purpose and Strategy
The highest scoring area is Board Composition and dynamics. There is no Decision 100
Making external benchmark as questions are bespoke to POL. 0
Summary of key themes from survey respondent feedback
+ Excessive government interference calls into question the Board’s independence 5 Decision Making ae nieeieas a
+ It is impossible to plan ahead amid uncertainty of funding and lack of clarity from
government on what it wants
There are conflicts between achieving a social and commercial purpose within the
current funding arrangements
Culture, succession planning, EDI targets and narrative have been de-prioritised
amid historical and on-going challenges
Risk management is not operating optimally, with several risks outside of tolerance Information, Reporting
and lack of adequate funding to address risks within known time horizons and Risk Management velamereI@cime
Individually the Board is capable and skilled but given POL’s government
participation and current market segments, there are skills gaps in
government/public sector experience, IT transformation, franchise expertise and
banking. Board Composition and
Dynamics
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Append 2 — Board and Led aga
@
Leadership survey — governance effectiveness (Oct/Nov 23)
._
‘om SEG and LT (previous GE), LT meeting attendees and SEG sub-committees
=
Self-reported over
+ The Graph illustrates the summary of POL respondent scoring against each chapter of the Post Office Ltd SLG_ = = — Benchmark
survey with results benchmarked against 50+ Management teams across a range of listed,
public sector and private companies in the UK. The two lowest scoring areas by POL, which
also have the biggest delta against the benchmark are Strategy Implementation and Trust exerearaner
and transparency. The highest scoring area is Roles and Responsibilities. There is no Working Processes
external benchmark for the Sub Committee, Information Reporting and risk management 100
and Governance Structure as questions are bespoke to POL. eisemmitcs Roletend Retrenebintiee
Summary of key themes from quotes B
Strategy and implementation is not clear, is challenged by lack of Shareholder clarity,
: H : a ., A Information, Reporting and Business Purpose and
funding uncertainty and dealing with historical matters vs BaU create constant trade-offs aay be
Risk Management Organisational Vision
Accountabilities, delegations and decision-making need improvement, as they are either
not clearly set out or understood or implemented
Poor levels of trust in GE, and also across organisational levels. A lack of accountability,
aversion to taking decisions, poor communication, lack of cross functional working, talent Governance Structure Strategy Implementation
and performance management all add to this
Ml and reporting from Sub Committees is of variable or poor quality and does not support
effective decision-making, with few exceptions. Sub Committees’ purpose is unclear, and Rerormanescanpatenciet
remits overlap - Navigating through Value Creation
t * . n Business Landscape
The GE has too many members and is not a cohesive leadership team. Its meetings are not P
focused enough with substandard quality of discussion. Diversity also needs improvement Performance Competencies
Trust and Tr
~ Executing for Results GPSS eS US
People churn, varying capacity and capability across leadership with many temporary
roles, no transparency around recruitment, L&D and succession planning calls into question
GE members’ competence and leadership. Recent appointments, however, have been
additive
Engaging other stakeholder voices at Board and leadership, and risk governance all require
provement.
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Appendix 2 — Board and Leadership Surveys
Board survey
Key areas for attention
The following table highlights those areas which receive either low scoring and/or alignment (as marked against each score at the bottom left). It provides in red the overall POL score against the
benchmark of 150+ other Boards.
Talent and Culture
The company’s leadership and talent management evaluation and planning are in good order.
50 74 [zx _I I
@ towscore
Talent and Culture
We have a satisfactory succession plan for key roles in the management team.
49 64 466 Fx
@ Lowscore
Information, Reporting and Risk Management
Investments are given appropriate and robust review.
56 79 i= EJ
@ LOWALIGNMENT
Purpose and Strategy
The board is quick to respond to changing business conditions.
58 82 II
Results show POL score for each aspect (Red) against benchmark score (grey).
@® LOW ALIGNMENT
Scale shows % of respondents in each grouping on a scale of 1 = strongly disagree to 7= strongly agree
e GrantThornton
Talent and Culture
The board has specific framework or approach in place to monitor culture in the organisation.
39 66 Jw I ses
@ towscore
Purpose and Strategy
The company is well prepared for business or technology disruptions.
“1 73 os [a I
@ Lowscore
Information, Reporting and Risk Management
The board periodically reviews and challenges mission-critical dependencies.
@ LowaLicnment
BETWEEN ROLES
@ HIGH UNCERTAINTY
66 78 29% I sex I I
Talent and Culture
The board’s contribution to matters concerning management appointments and development
of a diverse pipeline has led to the desired outcomes.
@ LOW ALIGNMENT
27%
wonwicemny #7 73 ia il
Don't know 1 2 3 4 5 ‘6 7
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Appendix 2 — Board and Leadership Surveys
Leadership survey
Key areas for attention
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The following table highlights those areas which receive either low scoring and/or alignment (as marked against each score at the bottom left). It provides in red the overall POL score against the
benchmark of 50+ other Management teams across the UK.
Trust and Transparency
The members of the Group Executive trust each other.
“i 81 Ez i
@ Lowscore
Trust and Transparency
Iconsider communications from the Group Executive to be transparent.
52 78 EE 1
@ LOWALIGNMENT
Decision-making and Working Processes
Group Executive members generally appear to find it easy to make decisions.
46 59 iw a
@ Lowscore
Decision-making and Working Processes
Diversity within the Group Executive positively affects our decision-making process.
59 81 HEH
Results show POL score for each aspect (Red) against benchmark score (grey).
2 I
@ LOWALIGNMENT
Scale shows % of respondents in each grouping on a scale of 1 = strongly disagree to 7= strongly agree
e GrantThornton
Performance Competencies -— Navigating through Business Landscape
The Group Executive is strong at developing strategies to address future business scenarios
‘and work to implement those.
57 80 ll I I
Decision-making and Working Processes
The CEO holds people accountable for agreed upon results.
60 81 i I Ea
Decision-making and Working Processes
I believe that the Group Executive takes appropriate business risks.
54 79 I 0% I I sex I
Strategy Implementation
@ LowALIGNMeNT
@ LOWALIGNMENT
@ LOWALIGNMENT
I believe we are sufficiently focused on meeting the challenges of the rapid digital transformation
of business and society.
Don’t know 1 2 3 y 5 6 7
—
41 76
@ LOWALIGNMENT
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Appendix 3
Principle 1 — Board leadership and POL
purpose
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Appendix 3 - Principle 1 - Board leadership and
company purpose
Principle 1
In this section, we explore the findings on
governance aspects related t
+ Purpose and strategy
Board leadership
Executive leadership
Measurement of performance ~ Ml and
meeting discipline
Culture
Strategy and purpose
POL's public ownership is the founding tenet of its social purpose. To deliver
on this, DBT has stipulated a number of principal objectives of POL which
are set out under the Shareholder Relationship Framework. These objectives
of POL are:
— to maintain a network of post offices beyond its optimal commercial size
as detailed in the Funding Agreement
— a specific minimum branch threshold of 11,500 is specified by the
Secretary of State in the Funding Agreement
— in so doing, meet the minimum access requirements specified for this
network of post offices as detailed in the Funding Agreement
— provide this network of post offices to make available the services of
public economic interest (SPEI) detailed in the Funding Agreement
(essentially this is about maintaining the branch network in accordance
with certain access requirements to provide an appropriate level of
service to the public)
Future government funding is uncertain, so planning in the current
environment is extremely difficult. Significant efforts go into reprioritisation
within POL, wasting capital in the process (both financial and intellectua).
‘As an example, there is an agreed programme to shut down c.100 directly
‘owned branches with an annual cost-saving once complete of c.£25 million
per annum. We understand this programme has been stopped and started
c.t times, where each time close to execution, funds have been
re-orientated to support a different project, with no ability to challenge
the rationale in the absence of a strategic framework
Ultimately, POL is stuck between maintaining the sub-optimal
network/social purpose and developing its commercial side. Becoming a
leaner, more efficient operation and building the Post Office of the future to
meet people’s needs (more digital) in the coming decades, whilst becoming
more appealing as a franchise operator are all part of the vision. There is a
need to invest to reduce costs in any scenario, which HMG is perceived as
presently unwilling to consider on a strategic basis
This is a fundamental obstacle to the efficient and effective running of the
business, and one that needs resolving. Although POL can take steps to
improve its governance and become more efficient, real progress towards
the business optimising its commercial platform can only be achieved with
Shareholder agreement to a new set of objectives.
Grant Thomton ©2024 I 33
Appendix 3 — Principle 1 - Board leadership and company purpose
Principle 1
Board leadership and purpose
Board
Based on the information provided, the following key areas need to be addressed to enhance the cohesion of the Board and the SEG asa
leadership team and to inform decision-making and corporate memory:
+ Cohesion and Effectiveness of the Board: The Board is relatively new, with members joining in different years, and thus, there is a need for
deliberate efforts to build trust and understanding among the members. Informal get-togethers and unstructured dialogues can help in
building relationships and fostering effective teamwork.
Strategic Discussions and Follow-Up: The Board discussions and papers are not always strategic enough, and there is limited follow-up on
strategic plans. This highlights the need for more strategic focus in meetings and a structured approach to follow-up actions from strategic
discussions.
Development of Long-Term Strategy: There is a lack of pace in putting forward a longer-term strategy to the Shareholder, which is in
contrast to the guidance in the foundational governance documents and the Minister's Letter. It is recommended to use strategy days to
develop ideas for longer-term strategies to be presented to the Shareholder at an appropriate tim
Utilising the Experience of Postmaster NEDs: The introduction of Postmaster NEDs to the Board has provided valuable insight into the
experience of Postmasters, but there seems to be a missed opportunity in not effectively utilizing this feedback. There is a need for NEDs to
present back to the Postmaster community, sharing insights and communicating with them at events.
Formal L&D Program: There is an absence of a formal learning and development program for the Board. Considering the relatively new
composition of the Board, a structured learning and development program can help in building skills, fostering collaboration, and
enhancing the effectiveness of the Board.
Succession Planning and Skills Mapping: There are concerns over the future make-up of the Board and the basic level of succession
planning and skills mapping in place. It is recommended to address these concerns and ensure robust succession planning and skills,
mapping to maintain a well-rounded and capable Board.
Addressing these areas can contribute to the development of a cohesive and effective Board and SEG as a leadership team, informed decision-
making, and the establishment of a clear long-term strategy to guide the organisation's direction.
e GrantThornton
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Appendix 3 — Principle 1 - Board leadership and company purpose
Principle 1
Board leadership and purpose - Executive leadership
Executive leadership
+ Concerns around the executive leadership
remain - capacity, focus, retention, and meeting
discipline alll need to be addressed
+ Although time is needed for the SEG to build the
collective competence, narrative, stability,
corporate memory, and effective, collaborative
ways of working, the team also needs to pull
together as one mutually trusting collective,
driving clarity and being unified by culturally
aligned measures of performance
+ Streamlining the organisational structure to a
impler hierarchy is a big step in the right
rection. Historically, layers or processes and
controls have been built around the enabling
functions, whereas in reality, the organisation
needs to address root causes around capability,
organisational structure, and the lack of
clarity in roles and accountability. Base
information requirements, accountablities,
monitoring/reporting and communication
protocols should be agreed and communicated,
with a focus on those forums that have the
highest strategic importance
‘+ Given the level of noise surrounding POL, the
SEG needs to communicate its collective purpose
and individual roles in addition to working more
effectively as a cohesive leadership unit. The SEG
should be role-modelling the “to be” desired
culture and behaviours
e GrantThornton
Points of note from survey and comments made to Grant Thornton during
interviews
There are significant challenges related to trust, communication, and leadership within
POL namely:
+ Lack of Trust and Negative Behaviours: The historical behaviours of GE members have
led to a lack of trust, with individuals acting in isolation, betraying confidences, and
openly criticizing each other. This has created an environment where negative
behaviours are not appropriately addressed, leading to further erosion of trust.
+ Ineffective Decision-Making and Board Utilisation: The inability of the GE to unify
around decisions has led to the Board being used as a forum to find agreement. This,
indicates a lack of effective decision-making processes within POL.
* Internal Communications and Trust: Effective internal communications are essential for
maintaining employee engagement and trust. Comments suggest that internal
communications are treated in a political manner, leading to a lack of authenticity and
trust. There is a need for more transparent and authentic communication.
+ Leadership Capacity and Agenda-Driven Behaviour: There are concerns about
executive leadership capacity, as well as the CEO's focus and ability to build a stable
and high-performing management team. Some members of the leadership are noted to
direct activities to protect their own interests or drive their own agenda, which is seen as
frustrating and costly to the business.
+ Lack of Insights and Educator Role: GE discussions are not seen as useful and suffer
from a lack of insights, with some individuals bearing the role of "educator." This,
indicates a potential lack of collaboration and shared learning.
These challenges highlight the need for a comprehensive approach to address cultural and
behavioural issues, improve decision-making processes, and enhance leadership
capabilities. It is essential for POL to focus on building a culture of trust, transparency, and
open communication, while also ensuring that leadership is aligned with the organisation's
goals and values. Additionally, there should be a focus on fostering a collaborative
environment that encourages learning and the sharing of insights.
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Appendix 3 — Principle 1 - Board leadership and company purpose
Princip
le 1
Board leadership and purpose - Culture
Overview
The pervasive culture throughout the organisation whereby
individuals are reluctant to take decisions was clearly stated to
us by virtually all interviewees, both at Board level and below. This
has a detrimental effect on the effective working of the business.
‘The reasons for this and the effects of it are varied but include:
— the extreme pressure that the Company is under. POL is in fire
fighting mode dealing with legacy issues as well as the Horizon
IT Inquiry developments. This, coupled with hostile media
coverage and Government distrust is leading to micro-
management. This micro-management is counter-productive
(although understandable) and is engendering a slege
mentality, which is sucking up resources and inhibiting positive
action
— there is a culture of fear of getting it wrong, so itis easier to put
decisions aside if the accountability is not clear and followed
through. Driving this is an intense amount of public, media and
Shareholder scrutiny, as well as potential FOI requests. Overall,
there is so much external pressure to not ‘mess up’ again, that it
is paralyzing activities in the organisation
— in some cases, accountabilities are not as clear as they should
be to counteract the above inherent weaknesses, both at an
individual level, and in relation to committees and other
management forums. There is also no universally understood
RACI matrix to fall back on to unlock this
— issues around the governance and delivery of the NBIT
programme. The successful delivery of this programme is critical
to restoring credibility with Postmasters. It also underpins the
ability to undertake future thorough internal investigations.
Whilst this is not directly within the scope of our work,
interviewees proactively mentioned that this is mired in delays
‘and cost overruns, bringing into question the credibility of MI
e GrantThornton
— there is also a capa issue. is material because it leads
to making processes overly complex. Due to the present intrusive
nature of the shareholder's oversight, many decisions go up to
government, which is seen as very slow. People become immune
to making decisions because of the number of people
overseeing, considering and deciding. A reluctance to take
responsibility means that operational decision making gets
pushed up to the CEO or other GE members, taking valuable
time away from their day jobs and, for the CEO, tying him down
in operational decision-making when he should be leading
Themes from survey and interview
The feedback from the interviews and surveys indicate significant
challenges related to performance management, risk aversion, and
board attitudes within the organisation. Specifically;
Lack of Accountability for Underperformance: POL struggles with
holding individuals accountable for underperformance. This may
be due to a risk-averse approach to managing people out of POL,
as well as uncertainty around funding leading to project
prioritisation/de-prioritisation at short notice. Despite having the
necessary people policies and processes in place, the cultural
ambiguity and widespread perceived behaviours among the
leadership team make it difficult to enforce sanctions for non-
adherence to policies.
Risk-Averse Attitude and Board Influence. There is a prevailing
risk-averse attitude from the Board, which has a significant impact
on the POL. Employees feel hesitant to put forward more risky or
commercially courageous options due to the fear of immediate
rejection by the Board.
+ Self-Reinforcing Cycle: The risk appetite of the Board
permeates much of POL's decision-making processes, creating
self-reinforcing cycle where risk-averse behaviours are
perpetuated and continue to impact the POLs culture and
performance.
To address these challenges, consider the following actions:
+ Develop a culture of accountability: Encourage open dialogue
‘about performance expectations and hold individuals
accountable for their performance through fair and
transparent processes.
+ Address risk aversion: Encourage a balanced approach to risk-
taking and decision-making, where employees feel empowered
to propose innovative and commercially courageous options
without fear of immediate rejection.
+ Foster a culture of trust and empowerment: Provide
‘opportunities for employees to contribute to decision-making
processes and feel empowered in their roles, improving overaill
trust and engagement.
+ Review and clarify policies: Ensure that the policies are clearly
understood and enforced, addressing any cultural ambiguity
and perceived behaviours that hinder effective performance
management.
By addressing these areas, POL can work towards creating a more
‘accountable, innovative, and empowered culture that supports
performance management and overall success.
Grant Thomton ©2026 I 36
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Appendix 4 — Principle 1 - Board leadership and company purpose
Principle 1
Board leadership and purpose
MI, minutes and agenda
+ Based on the review of the papers, Ml, agendas, and minutes of
the Board and Committees for the period between September
2022 to December 2023, the following observations and
recommendations were made:
~ While the quality of Board papers is improving, there is still a
concern about the volume and lack of effective insights to
support decision-making. It is recommended that management
information be synthesized to extract important insights and
reduce the amount of background information. Additionally, it is
suggested to remove the voluminous background information
from the reading room and encourage preparers of papers to
relevant inform. the management information
~ Alignment with Strategy and Decision-Making: In the absence of
clear strategy, management information is often presented in
‘a way that prioritizes each author's personal agenda. This
highlights the need for alignment with a clear strategic direction
to guide the content of management information.
- Board Discussions and Decision-Making: A significant proportion
of the information presented to the Board is operational in
nature, which hinders proper discussions around the themes that
drive the commercial success of the business. There is a need to
ensure that the Board has the proper discussions it should have
around these important themes.
= Clarity and Communication of Actions: There is a lack of clarity
regarding whether actions have been resolved or removed due to
inaction, both at the Board level and within the central function.
e GrantThornton
+ Itis noted that there has been improvement with updates on
actions provided in the Matters Arising Schedule. Additionally,
there is a need for timely communication of assigned actions out
of Board/GE meetings.
+ Minutes of Meetings: The minutes of meetings are considered to
reflect the substance of discussions and decisions accurately.
While opinions on the style of the minutes varied, it is noted that if
the Board is satisfied with the accuracy of the minutes, no change
is recommended.
+ Committee Papers and Minutes Availability: The availability of
committee papers and minutes varies based on membership and
independence status, with some Board members finding that the
information coming to the Board gives a limited view of matters
across the business if not on a Committee or considered
independent.
Recommendations
+ Synthesise MI to extract important insights and reduce
background information.
+ Ensure alignment of Ml with the strategy and decision-making
needs.
+ Facilitate proper Board discussions around themes driving the
‘commercial success of the business.
+ Improve clarity and communication of actions, both at the Board
level and within the central function.
+ Ensure the availability of committee papers and minutes provides
a comprehensive view of matters across the business for all Board
members.
Addressing these recommendations could lead to more effective and
impactful Board and Committee discussions and decisions, ultimately
supporting POL’s strategic objectives and performance.
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Appendix 3 — Principle 1 - Board leadership and company purpose
Principle 1
Board leadership and purpose — Board survey output
The below comments have been paraphrased from comments provided by Board, GE and some SLG members via the BoardClic platform. For full details refer to the BoardClic survey.
Summary of survey comments
* The situation outlined indicates several key
challenges and areas of concern within the
‘organisation, particularly related to the
Board's functioning, strategy development,
and stakeholder engagement:
Lack of Clarity and Direction: The Board is,
‘experiencing challenges in understanding the
government's vision for the POL. The absence
of clear guidance from the government
regarding its vision for the organisation is.
hindering the Board's ability to align its
‘strategy with government objectives.
Perception of Lack of Independence: There is a
growing perception that the Board lacks
sufficient independence from the government
shareholder, potentially impacting its dec
making and creating a shield for
‘accountability.
Strategy and Stakeholder Engagement: The
conflict between profitability and community
service is leading to a muddled strategy. The
Board recognises the critical importance of
certain stakeholder groups but is struggling to
effectively prioritise their interests and
‘engagement in the company's long-term
success.
ESG considerations are not being adequately discussed or
prioritised. This represents a significant gap in the Board's
‘oversight of the company's long-term sustainability and
ethical considerations.
Lack of Strategic KPIs: The absence of KPls at the top level is
creating strategic gaps and hindering the Board's ability to
effectively monitor POL's performance and progress
towards strategic goals.
Impact of Government Policy Framework: The Shareholder
policy framework is driving decisions that may not be
sustainable in the long term, potentially creating conflicts
between social and commercial objectives.
Public vs. Commercial Focus: There are conflicting views on
the organisation's focus between its social purpose and
commercial goals, particularly in the context of maintaining
large network of branches.
‘Addressing these challenges will be critical for the Board to
enhance its governance, strategic oversight, and stakeholder
engagement, ultimately fostering sustainable and balanced
decision-making aligned with the long-term success of the
Highest total
‘The Board has a consensus on which
stakeholder groups are the most critical
to the company's long term success.
(Benchmark 83%)
70%
Lowest total
The company is well prepared for
business or technology disruptions
(Benchmark 73%)
41%
Grant Thornton © 2024
Appendix 3 — Principle 1 - Board leadership and company purpose
Principle 1
Board leadership and purpose - Board survey output
The below comments have been paraphrased from comments provided by Board, GE and some SLG members via the BoardClic platform. For full details refer to the BoardClic survey
‘Summary of survey comments
The feedback provided by respondents
highlights several key areas for improvement in
the functioning and effectiveness of the Board:
+ Board Paper Quality and Timeliness: There
are concerns regarding the length, quality,
and timeliness of Board papers.
Respondents feel that the papers are often
lengthy, lack adequate summarization, and
re not delivered on time. This impacts the
Board's ability to efficiently review and
deliberate on key issues.
+ Time-Efficiency and Visibility: The time-
efficiency of the Board's work is perceived
to be mixed, with some expressing the need
for more visibility of Board members across
the work and activities of the Board
committees. This transparency and open
knowledge-sharing are seen as vital for
effective governance.
* Quality and Perception of Board Papers:
Respondents perceive Board papers as
lacking in quality, and the volume of
information gives the impression of
laziness. However, it is noted that some
specific papers, such as those related to
Retail, are regarded more favourably.
e GrantThornton
Leadership and Decision-Making: There are mixed views on
the Chair's performance, with some feeling that commercial
challenges are being addressed effectively but slowed by
the need to navigate the dynamics with the Shareholder.
Additionally, there is a perception that discussions do not
lead to clear and decisive votes, potentially impacting
decision-making outcomes.
Information Sharing and Cohesion: The decline in
information get-togethers is highlighted as a concern. These
gatherings are seen as vital for fostering cohesion and
alignment among Board members.
Key priorities to focus on:
+ Shorter more focused board papers with a
one-page summary of key data
Identify and synthesise what matters from the
data to provide more valuable insights
Cross-reference information and reporting with
risk reporting in order to better inform and
shape decision-making
Reduce duplication of papers and across.
decision-making forums
Ensure that when actions are assigned from the
GE/SEG/LT, those who the actions are assigned to are
informed of this as soon as possible after being assigned
Simplify, centralise and streamline papers, reporting and
dashboards and key metrics — ‘less is more’
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2 FBS
2 7 8
Highest total
We sufficiently explore all given opinions
and suggestions prior to making a decision
(Benchmark -83%)
67%
Lowest total
Board materials are of high quality
and conveniently summarised
(Benchmark -78%)
57%
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Appendix 3 — Principle 1 - Board leadership and company purpose
Principle 1
Board leadership and purpose — LT survey output
The below comments have been paraphrased from comments provided by the GE and some SLG members via the BoardClic platform. For full details refer to the BoardClic survey.
Summary of survey comments
The feedback provided by respondents highlights several key areas of
concern and potential improvement within POL’s business purpose,
vision, and strategy implementation:
+ Lack of Clarity and Conflicting Priorities: Respondents express
concerns about the lack of clarity on strategic direction,
conflicting priorities, and inadequate measurement of strategic
objectives. This suggests a need for a more cohesive and clearly
defined vision and strategy.
+ Internal Barriers: Funding limitations, lack of accountability, and
siloed working are identified as internal barriers to progress. The
persistence of funding challenges is seen as limiting innovation
and relevance to customers. Additionally, there are issues with
accountability and siloed working, hindering effective strategy
implementation and communication.
+ External Constraints Tied to Shareholder Views: The organisation's
strategy is perceived to be closely tied to and limited by the
shareholder's vision. Clear shareholder support and funding are
seen as crucial for achieving desired objectives.
+ Collaboration and Communication: Respondents emphasize the
importance of collaboration and alignment between the Board,
leadership team, and shareholders. Clear communication on
achievable goals within financial constraints and a review of
shareholder expectations are recommended.
e GrantThornton
+ Improvement Recommendations: Suggestions for improvement
include clearer accountabilities, better decision-making processes,
improved monitoring of progress, addressing historical issues,
developing a more proactive culture, and establishing a single set
of metrics and key performance indicators (KPIs) linked to the
strategy.
Addressing these areas of concern will be essential for POL to
enhance its strategic focus, overcome internal and external barriers,
and foster improved collaboration and communication with
stakeholders. Developing a clear and cohesive vision, addre:
funding challenges, and improving decision-making processes ‘il be
critical for driving effective strategy implementation and
organisational success.
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Appendix 4
Principle 2 — Division of responsibilities
© GrantThornton
Appendix 4 — Principle 2 - Division of responsibilities
Principle 2
In this section, we explore the findings governance
aspects related to:
+ Roles and responsibilities
+ Accountability
Covering areas such as, the effectiveness of
decision-making forums, and impact and clarity of
roles and responsibilities.
Shareholder role and the Board
Reporting obligations and matters requiring the consent of the
Shareholder are set out in various foundational governance
documents which also connect to wider guidance such as the UK Code
and Managing Public Monies
The principal requirements (in terms of ongoing engagement)
contained in the foundational governance documents are, in
summary, an obligation to provide a quarterly performance update,
proactively endeavouring to share information on key strategic or
policy issues, to share details of ‘Relevant issues’, as defined, and to
seek Shareholder approval when required (for Board appointments,
funding, etc)
Upon reviewing the Shareholder Agreement, it is unclear if the role of
the Shareholder Representative is well-defined. The description in the
Shareholder Agreement appears to be drafted from the perspective of
UKGI ‘representative director’, whose role is to ‘support and
supplement’ the role of UKGI. There is minimal acknowledgment that
the role carries the same legal fiduciary responsibilities as any other
NED and is expected to prioritize the success of the company above all
else.
We do note however, that the Shareholder Representative
appointment letter and the UKGI's opening statement to the Inquiry
provide this clarity. The role has the specific aim of bringing an
enhanced line of sight into POLs activities, while bringing a
government perspective to POL to aid its Board’s decision-making. The
same legal fiduciary responsibilities and ability to participate in
collective decision-making, as apply to POL’s other directors, also
apply to the Shareholder Representative.
To advance, it is necessary for both POL and the Shareholder to review
foundational documents to clarify accountabilities and reduce day-to-
day interaction, alleviating unnecessary bottlenecks in decision
making and establishing a more hands-off relationship and driving
accountability . The Board should also assess the feasibility of its remit
under the Matters Reserved for the Board.
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+ Itis clear the obscurity around the practical application of the
foundational documents is introducing unnecessary bottlenecks
in the system, impairing decision making and creating confusion
as to Leadership remit within POL.
Equally the current funding cycles (between one and three years)
are restrictive for providing clarity regarding long-term business
planning. The last statement of Government policy (2010-2015)
for the Company is more than ten years old and this policy
urgently needs to be renegotiated and updated (when appetite
prevails)
Board
+ Board division of responsibilities are largely in line with the UK
Code and good practice, other than ownership of the broader
People agenda (in terms of culture, EDI etc) being more explicit in
ToR
There may be merit at a future date in splitting Risk out from the
Audit and Risk Committee to elevate the second line to better
support and oversee cultural transformation. However, there is
limited capacity at present. Refer to Appendix (6] further details
Consider whether Rem Co and Nom Co are delivering against
their respective ToRs and agree how any gaps can be address by
review DoA, capacity, agenda, meeting timings etc. We
appreciate the work of these Committees has been impacted by
the absence of a CPO until Autumn 2023 (refer to further
comments in Section 4 and Appendices [5[ and [7])
Attention is needed to ensure that sufficient visibility/cadence of
formation is flowing from Subsidiaries up to the POL Board. This
‘ludes connectivity between the Board and Committee Chairs
with Subsidiary peers (there were varying views on visibility
coming from interviews). We understand this routinely happens
at ARC level. Refer Appendix [6] for further comment.
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Appendix 4 — Principle 2 - Division of responsibilities
Principle 2
Division of responsibilities (continued)
Enterprise
+ The POL leadership team (in December 2023) composed of
— The Group Executive (GE), a group of 12 individuals who report
into the CEO
— The LT, also known as the GE-1 who comprise the direct reports
of the GE, and other senior executives
+ The LT met monthly for the communication of board and GE
decisions and wider decision-making
This group had comprised of 100+ individuals, which is now being
reduced to roughly a quarter of the size
+ The GE's ToR, which again are being reviewed, state that its
purpose is to assist the CEO in strategy development and
implementation, operational and financial performance monitoring,
assessment and control of risk, etc, with the GE functioning as a
forum for discussion, decision-making and problem solving. The GE
met once a week for this purpose and LT met monthly for the full
day
+ The GE was then further supported by 12 sub-committees
+ From our findings we consider the GE/LT did not operate effectively
‘as a decision-making group and is poorly supported. This is due to
several issues
— the vast number of matters brought to it for decision (100+)
— large number of individuals reporting directly and indirectly into
the CEO (currently being addressed)
— low-level delegated authorities that limit decision-making:
e GrantThornton
Numerous people issues within the organisation which have
been exacerbated by the continued rotation of personnel in
the Head of People/CPO role as highlighted. Wider issues
include, confusion around roles, accountability and cultural
behaviour, as well as legacy complexity and mistrust around
reward schemes and pay requirements. This area requires
continued laser sharp focus at Board, Rem Co and within the
Executive. The Rem Co and newly appointed CPO appear to
be making positive progress in this area
There is duplication of papers across decision-making groups
which can sometimes appear to take decisions on the same
matter twice. We found specific mentions of this happening
between RCC and ARC and RCC and Retail Committees
‘The effectiveness of certain working groups is not clear. For
example, the Improvement Delivery Group (IDG) does not
have metrics or key performance indicators to measure or
evidence its effectiveness in terms of impact.
Authority of committees is not clear. IDG was given as an
example where it appears to be a body that largely hears and
collates actions/information rather than take decisions
An understandable level of risk aversion, leading to semi-
paralysis and a general avoidance of decision-making, which
is also impacting performance management. Given the public
scrutiny and government ownership dimension, there seems
an organisational reluctance to manage underperformance
Points of note from survey and interviews
+ Attendance at LT meetings is relatively low
+ POL faces several challenges related to its internal processes and
decision-making structures. These include a lack of understanding
and limited value added in LT forums and committees, leading to a
risk-averse environment and avoidance of accountability.
+ The Horizon IT Inquiry has caused nervousness and is impacting
decision-making, leading to increased reliance on legal colleagues
for decisions. Low delegated authority levels and excessive decision
escalation are also hindering efficient operations, as are the
numerous varying franchise agreements with Postmasters.
+ Additionally, there are issues with management reporting lines and
unnecessary decision-making by the CEO on operational matters.
Moving forward, addressing these challenges will require improved
communication and clarity on roles, reassessment of decision-making
processes, delegation of authority, and streamlining of franchise
agreements.
Itis also crucial to address the risk-averse environment and reduce
unnecessary decision-making by senior executives. These steps will be
essential in fostering a more efficient and accountable culture.
Grant Thornton © 2024
Appendix 4 — Principle 2 - Division of responsibilities
Principle 2
Division of responsibilities (continued)
e GrantThornton
Work in flight
+ Proposals to reduce the direct reporting individuals
into the CEO to seven have been implemented and this
group will form the nucleus of the Executive leadership
team to be known as the SEG
+ Further proposed changes include the slimming down
of the wider leadership team or LT from over 100
individuals to a group of 20-25, and the overhaul of
Sub Cos and working groups
+ We are informed that the full leadership team and the
refreshed GE sub-committees will be announced in
late March 2024. We consider that these
arrangements are satisfactory and will improve
governance at POL
+ We are also encouraged by the approach namely, to
design the Committee requirements, purpose and roles
ahead of identifying the individuals, which will be done
based on skills and experience for the role and not.
necessarily on seniority
+ As part of this process all ToR, DoA’s at the GE and
GE-+1 level will be reviewed
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Interim Implementation Committee — further thoughts
+ The proposal for an Implementation Committee (IC) or repurposing the IDG
to spearhead the reform effort has several potential benefits.
+ This approach could provide a focused and dedicated group to drive
fundamental reform within POL. The inclusion of a limited number of
committed leaders from the LT, along with an independent chair, can bring a
fresh perspective and ensure the necessary expertise in managing complex
transformations.
+ The proposed IC, supported by an experienced project team, could
effectively anticipate and address the technical, organisational, and political
challenges that are likely to arise during the reform process. This can help in
that the reform efforts are managed rigorously and in a well-
coordinated manner.
+ Additionally, the idea of having the committee act as a challenge to the
strategy design and provide oversight for the current transformation
committees can bring coherence and alignment to the reform initiatives.
+ However, the success of this approach will heavily rely on clear
communication and support from the LT to ensure that the governance
rebranding and the case for change are well understood POL. Effective
communication will be crucial in gaining buy-in and creating a shared
understanding of the transformation's purpose and benefits.
Grant Thomton ©2026 I 44
Appendix 4 — Principle 2 - Division of responsi
Principle 2
Division of responsibilities - Board survey output
The below comments have been paraphrased from comments provided by Board, GE and some SLG members via the BoardClic platform. For full details refer to the BoardClic survey.
‘Summary of survey comments
Low delegated authorities and spend approvals mean that too many issues come up to board for decisions, thereby
causing delays and a bureaucratic environment
Respondents remarked on the need for more visibility of Board members across the work and activities of the Board
committees to facilitate transparency and open knowledge
‘Some respondents acknowledged that the Board has positively evolved from being more executive in nature
historically to a much more oversight focused mode of functioning
Highest total
There are clear escalation and reporting
lines between the board, board
committees and senior management
(Benchmark -%)
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Feedback loops between the board
and organisation are effective
(Benchmark -%)
Appendix 4 — Principle 2 - Division of responsibilities
Principle 2
Division of responsibilities — LT survey output
GE and some SLG members via the BoardClic platform. For full details refer to the BoardClic survey.
Summary of survey
The survey highlights several areas for improvement in decision-
making processes within POL. Specifically
+ Itemphasizes the need for higher-quality management
information (MI) to facilitate efficient decision-making.
+ The simplification of decision-making forums, and the cultivation
of a culture of trust and transparency.
+ Additionally, the
making behaviour,
formalising decision-making groups.
Other survey output to consider:
+ Higher-Quality Management Information (MI): There is a need to
improve the agility and pace of decision-making using high-
quality data, metrics, and pre-meeting preparation. Complete and
relevant information should be provided to decision-making
forums to facilitate efficient decision-making.
+ Simplification of Decision-Making Forums: Efforts are being made
n-making forums to improve DoA, speed up
decision-making, reduce siloed working, and free up capability
that is currently taken up by producing multiple papers.
+ Culture of Trust and Transparency: POL needs to foster a more
supportive and less risk-averse culture, with a greater appetite for
risk and improved risk ownership. This should be supported by
clear communication and transparency to build trust within POL.
e GrantThornton
Communication and Decision-Making Behaviour: There are
concerns about the overall approach to communication, both
internally and externally, and behaviours demonstrated by
SEG/GE members that suggest a lack of trust and transparency.
POL needs to encourage transparency about mistakes, lessons
learned, outcomes, and successes.
Improving DoA and Prioritisation: POL to focus on improving DoA
within the leadership team, clarifying accountabilities, and
consistently applying them. Additionally, there is a need for better
prioritisation of forums, work, and projects based on strategic
importance and risk.
Related to the above there should be the formalisation of Decision-
Making Groups: Decision-making groups should be formalized and
owned by a GE sponsor or sponsors, with decisions respected and
taken as sufficiently challenged within these forums. Lack of
consensus should be addressed through transparent decision-
making.
Some of the suggested improvements include:
- increasing delegation thresholds to enable more decision-
making at lower levels and more formalisation of the de
making processes
- streamlining agendas and MI to reduce the number of
decisions requiring higher-level approval
= addressing historical issues that impact POL’s risk appetite
and decision-making culture.
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+ Most comments provided seem to have been done in the spirit of
fostering a culture of devolved authority, trust, and collaboration,
leading to a more streamlined and effective decision-making
process.
Equally it seems there is also a sentiment towards need for a
cultural shift towards open communication, proactive
collaboration, and clear accountabilities at all levels.
+ The proposed improvements also call for a focus on agility and
prioritisation.
Addressing these areas will be essential in improving the decision-
making environment within POL. It requires a cultural shift towards
trust, transparency, and open communication, as well as a focus on
clear accountabilities and strategic priorities of projects / programs.
Grant Thomton © 2026 I
Appendix 4 — Principle 2 - Division of responsibilities
Principle 2
Division of responsibilities - subsidiaries
Subsidiary Boards
+ POL has two subsidiaries namely Post Office Management Services trading as Post Office Insurance
(PO) and Payzone Bill Payments Limited. First Rate Exchange Services Holdings Limited (FRESH) and
First Rate Exchange Services Limited (FRES) is a joint venture (‘JV’) with the Bank of Ireland
POl is fully-owned by POL which also acts as its Appointed Representative (AR). Historically the
Chair of POI’s Audit and Risk Committee reports into POL’s Audit and Risk Committee. Given the
AR relationship between both entities, POI requests for the papers and minutes of POL in order to
fulfil their oversight responsibilities. We understand that POI’s Chair and the recent POL Chair were
scheduled to meet later this month- this should remain on the radar for any incoming chair. There are
also periodic meetings between the Head of Internal Audit of POL and the Head of Compliance of PO!
to review POL’s risk profile
FRESH/FRES is a joint venture between POL and the Bank of Ireland, there are three POL representatives
on the board and the group general counsel acts as the board chair. In terms of reporting, the JV
‘agreement was revised and presented to the POL Board for approval and financial information for the
joint venture is also reported at the POL Board
Payzone Bill Payments Limited is a stand-alone subsidiary of POL and as such POL’s level of oversight
has been sporadic and limited. However, this is set to change as subject to Shareholder approval,
Payzone will be subsumed into POL
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Appendix 5
Principle 3 — Composition, succession and evaluation
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Appendix 5 - Principle 3 - Composition, suc
evaluation
Principle 3
aay)
In this section we explore the findings on
governance aspects related to:
+ Composition of the Board
+ Composition of the Executive and LT
+ Succession planning
+ Performance management
Board composition and succession
+ Recently the Secretary for Business and Trade removed the POL
Chairman with immediate effect. The intention is to appoint an
interim Chair to take on the role pending the search for a
permanent successor. We understand, in the interim, that Ben
Tidswell, the present SID, will chair the Board and Nom Co meetings
until @ replacement is found, or until he leaves in July 2024
Further board rotation is imminent alongside this process with
expected departures of two INEDs and the two Postmaster NEDs
within the next 15 months with very limited visibility around
succession planning, skills matrices ete develop to inform thinking
Ultimately there is too much Board role rotation, and this is
impacting the corporate memory, leadership cohesion, decision
making and oversight effectiveness
As highlighted feedback acknowledges concerns around the lack
of proper succession planning ~ at Board and for key senior
leadership roles. As an example it appears that POL did not
anticipate that the two Postmaster NEDs would be stepping down
at the same time, The lack of awareness of the wider impacts on
corporate memory until most recently, coupled with the lack of
formal discussions as to how this should be addressed, (other than
considering one role to be extended), points to a weak capability in
this regard and there should be greater oversight of Nom Co in
terms of its capacity to delivery against its ToR. We have
subsequently been advised that proposals have been formulated
for a staggered step-down process going forward which will be
presented to the Shareholder for approval
In the survey scoring this is one of the areas identified as
highest priority yet receives the lowest scoring in terms of
effectiveness/impact, refer table opposite (red score below against
the general Board benchmark in the third column)
Aligned to the comments on Succession planning the Board does
not appear to regularly review its diversity with regards to
background, ethnicity, gender and other minorities; as an example
only two members of the eleven permanent Board positions are
held by women and the intention around EDI needs to be consider
as part of any future composition
Individually, all board members have significant experience and
expertise both at executive and Board level. Interviews cite that
there is improving diversity of discussion and debate at Board.
However, the Board is still learning how to best work together and
be most effective as a leadership group. It is usual to “sacrifice” the
first 12-18 months to becoming fully effective
All cite how much they underestimated the complexity with the
Shareholder in terms of governing the organisation and there is
acknowledgement that the Board is ultimately approved by the
Shareholder which influences its composition
Itis acknowledged that the current level of “noise” surrounding
POL is a huge distraction as well as being an impairment to
successful recruitment and a plan in terms of talent attraction
needs to be thought through.
‘The company's leadership and talent management
evaluation and planning are in good order. a tA
We have a satisfactory succession plan forkey roles inthe os
‘The board’s contribution to matters concerning management
‘appointments and development of a diverse pipeline has led 1.8 73
to the desired outcomes
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Appendix 5 - Principle 3 - Composition, succession and evaluation
Principle 3
Composition, succession and evaluation
Executive
The current Executive team, while individually experienced, has historically struggled to form a
cohesive and innovative strategy. The accumulated competence and experience is in place, but
without aligned and unifying objectives, the collective cohesion is lacking, which in turn reflects
poorly on the CEO.
The current CEO and CFO have been in their roles for an extended period, and the absence of the
CFO poses issues during q critical transformation period. The capable deputy CFO has stepped in,
but the position needs to be filled permanently to support the anticipated transformation.
Additionally, the absence of a permanent CFO is causing issues with Board written resolutions, and
‘amendments to the Articles to permit written resolutions to be passed with a 75% majority are being
tabled for Board approval at the POL Board meeting of 1 March.
There are a number of other (relatively) senior roles which are currently filled on a contract basis
within POL in order to speed up decision making and bolster capacity. This is exacerbating the need
to build a cohesive leadership team and corporate memory across the organisation, reducing
‘accountability, and ultimately leading to an increase in staff churn.
The lack of succession planning around the key senior leadership roles of CEO, CFO etc. is causing
concern. Succession planning is a key process in ensuring the organisation can deliver on its
objectives, focusing on the right number of people, with the right skills being employed in the right
roles and at the right time.
Furthermore, the Deputy CEO has indicated his desire to step down, which if actioned will leave a
significant capability gap as we understand he has been impactful in the current role. As part of the
wider recruitment plans a COO should be recruited without delay to enable a sensible handover
period and ensure an avoidance of further capability gaps occurring in key positions at both Board
and Senior Management level. Particularly as the Horizon IT Inquiry will continue to require
leadership from the CEO.
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POL is facing numerous "people issues,” including confusion around roles, accountability, and cultural
behaviour, as well as the complexity of legacy reward schemes, mistrust around pay, high staff churn,
and confusion due to a lack of corporate memory.
A historical lack of tenure in the CPO role has exacerbated these issues, leading to a lack of cohesion
leadership, confusion and duplication of roles and responsibilities, absence of a skills matrix and
performance-based conversations, ambiguity in accountability, lack of diversity and inclusion
‘awareness, and poor cultural behaviour. These issues need to be addressed to foster a healthier and
more productive work environment.
The newly appointed CPO, (October 2023), has all these issues as immediate priorities and a three-
year people delivery plan is imminent. We are encouraged that the outline proposals for tackling these
ues are focused in the right direction in addressing the gaps. A lesser priority is the lack of any
formal learning and development plans across the organisation.
Further points of note from interviews and survey;
— While new additions have been additive in bringing new, valuable experience, there has not been
enough time to re-build collective competence and ways of working
— Itis felt that sometimes recruitment is perceived not to routinely be conducted transparently
reference to the absence of a framework of skills, competencies ete and no EDI thought put into
interview panels and targets
— Capability overalll is lacking when it comes to breadth and depth, and increased expertise and
experience in certain areas is needed, such as transformation management, effective leadership,
although recruitment limitations (i.e. remuneration and government thresholds/appetite) and
reputation recognised as limitations in this regard
— There is limited cross functional working across POL leadership and more needs to be done to
facilitate the building of leadership teams
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Appendix 5 - Principle 3 - Composition, succession and evaluation
Principle 3
Composition, succession and evaluation
Succession and evaluation
+ Related to this, a lack of transparency at Board around senior
level recruitment and appointments
Key development areas highlighted in Board Effectiveness reviews
over the last few years remain a gap today. The Board need to.
clearly establish why it has not resolved a number of the issues.
outlined both through internal and external reviews
Internally, there is no structured approach to promotions, no skills
or competency frameworks used as a basis with levels set for each
cadre, no set requirements for interview panels and no requirement
for EDI training. Externally, even though senior appointments could
be kept quiet due to valid reasons, such as fears of leaks to the
press, this is still hampering discussions and eroding trust in this
important area
Anumber of relatively senior roles which have been filled on a
contract basis rather than by new permanent employees which
has exacerbated the lack of corporate memory across the
organisation, reduced accountability, and increased staff turnover
although we understand this is complicated by the ownership
structure and foundational governance documents
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Appendix 5 - Principle 3 - Composition, succession and evaluation
Principle 3
Composition, succession and evaluation - Board survey output
The below comments have been paraphrased from comments provided by Board, GE and some SLG members via the BoardClic platform. For full details refer to the BoardClic survey.
Summary of survey comments There is also the need to balance the current
Board with a ‘younger voice’ by apps
* Concerns around the lack of proper succession younger individuals as non-executive directors
planning. Many point to the fact that the renewal
Fermtoritelncetnemten IEDelitrotcretsonechtre Respondents held the view that being a relatively
Isnnertoeninnimenberccrtvelsccrdiersn ron new Board, more emphasis should be laid on social
renewal at the same time (summer 2024) with time spent together to build relationships
limited visibility expressed outside the Nom Co on The voice of the postmaster NEDs is valued
how this is formally going to be dealt with beyond
being staggered
Most respondents do not agree that the board
regularly reviews its diversity with regards to Highest total Lowest total
background, ethnicity, gender and other minorities There is mutual trust and respect My knowledge and experience
There is acknowledgement that the Board between members of the board are well utilised
is ultimately approved by the Shareholder which (Benchmark 91%) (Benchmark 85%)
influences its composition
Respondents remarked on the Board being largely
composed of individuals from financial services
backgrounds and less from areas of current POL
market segments such as retail. Comments on 0; 9,
current skills gaps include banking and digital, 77% 70%
public sector/Whitehall experience, managing a
government Shareholder and an individual who has
combined commercial and government experience
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05 Appendix 5 - Principle 3 - Composition, succession and evaluation
Principle 3
Talent, performance and succession — Board survey output
The below comments have been paraphrased from comments provided by Board, GE and some SLG members via the BoardClic platform. For full details refer to the BoardClic survey.
Summary of survey comments cueston mmo =
+ There is acknowledgement that the Board is ultimately approved by the Shareholder which the com
Ove O10 O
50m
influences its composition 7
Respondents remarked on the Board being largely composed of individuals from financial services Node anther rice tiabadsscmnetnans I dd?
backgrounds and less from areas of current POL market segments such as retail. Comments on Thbendhnagelistemnmkorippnedlipbabimeail = 5. gy gg
current skills gaps include banking and digital, public sector/Whitehall experience, managing a
government Shareholder and an individual who has combined commercial and government 6s
experience
There is also the need to balance the current Board with a ‘younger voice’ by appointing younger
individuals as non-executive directors
a7
There seems to be very little in the way of performance management in the business and very little
done to tackle poor performance
+ Respondents held the view that being a relatively new Board, more emphasis should be laid on Highest total Lowest total
nieroq santas cto alec so We have a satisfactory succession plan The Board has a specific framework
+ The Input of the postmaster NEDs is valued for key roles in the management team ‘or approach in place to monitor culture
in the organisation
(Benchmark 85%) (Benchmark 66%)
65% 39%
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05 Appendix 5 - Principle 3 - Composition, succession and evaluation
Principle 3
Composition, succession and evaluation - LT survey output
The below comments have been paraphrased from comments provided by the GE and some SLG members via the BoardClic platform. For full details refer to the BoardClic survey.
Summary of survey
+ Itseems that there are several challenges within POL related to the
composition and effectiveness of the GE. Despite the
acknowledgment of the team's good intentions, there are several
obstacles that hinder the collective performance:
— Lack of cohesion and alignment among experienced individuals,
leading to challenges in operating successfully as a collective
team.
‘Substantial changes and turnover in GE leadership, resulting in
a loss of corporate memory and stability.
Insufficient time for new additions to the team to integrate and
for the collective competence to be rebuilt and embraced by the
established GE.
Lack of diversity and balanced composition in terms of
EDi/diversity targets, hindering diversity of thought.
— Overall capability lacking in certain areas, such as
transformation management and effective leadership, with
recruitment limitations impacting this.
Capacity issues perceived within the GE, suggesting the need to
incorporate the viewpoints and expertise of GE-1 and SMEs to
function effectively as a team.
Suggestions to streamline the size of the GE to a few core roles.
to support effective collective working and solidify collective
capability and competence.
— The uncertainty generated by leadership changes, several
temporary roles, and the ongoing absence of the CFO.
e GrantThornton
— Minimal accountability and ownership, combined with poor
management of consequences/outcomes and performance
management approach.
Despite these challenges, there is a clear intention, drive, and
desire to move POL forward and align business unit goals with a
Group led strategy to generate value.
There is a prevalent view that the GE should adopt a more
comprehensive stakeholder-centric approach and skill set. This
includes engaging directly with customers, post masters, and the
wider market to gain insights that can be applied to strategy and
learning from both successful and unsuccessful experiences.
Equally there is feedback that POL should focus on listening
beyond the shareholder and incorporate the perspectives of
various stakeholders, including front-line staff and customers.
Additionally, there is a general consensus on the membership
composition and collective competencies of the Subcommittees,
with minor divergences. While the composition of these
subcommittees is generally perceived to be adequate, there are
suggestions to further improve their composition and collective
competencies, such as:
— Involving cross-business/function membership and occasionally
including less senior members of POL who can offer greater
depth of insight.
— Reviewing the composition of certain Subcommittees, such as
Retall, to ensure representation from various levels and
functions within POL.
— Bringing in additional subject matter experts where greater
knowledge, understanding, and insight are needed before
making decisions.
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‘Suggestions to address other challenges included:
— promoting a more collaborative and customer-centric approach
— relying on data and subject matter experts to inform decision-
making
— building trust in teams and promoting cross-organisational
working, and
— Increasing communication and collaboration within the GE.
‘Addressing these obstacles and fostering a more cohesive, diverse,
and effective GE will be crucial for POL’s future success
5y
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Appendix 6
Principle 4 — Audit, risk and internal control
© GrantThornton
Appendix 6 — Principle 4 — Audit, risk and int
Principle 4
In this section we explore the findings on governance
aspects related to:
+ Risk Management
Risk policies and procedures
Risk appetite and ARC
RCC and risk culture
Internal audit and control environment
Risk Management, Risk Policies and procedures
The Risk Function holds overall responsibility for overseeing the
corporate approach to risk management, defining and
implementing risk standards, policies, procedures, and guidance,
identifying emerging risks and trends, and producing regular
reports to the ARC.
The central Risk Function of POL has undergone a transformation
and has resourced appropriate skills and experience although
conversation should be given to hiring a CRO to support driving a
strategic risk environment.
Previously, the Head of Risk reported to the Director of Internal
Audit and Risk Management. However, recent executive changes
have led to the Head of Risk now reporting to the General Counsel,
aligning the risk function with compliance functions, which also
report to the General Counsel. This change was made to address
potential conflicts of interest with the second line of defence
teporting to the third line of defines.
While the decision to move the central Risk Function out of the
remit of the Director of Internal Audit is considered appropriate,
recent developments, including legal exposure and ongoing
investigations, may necessitate reconsideration of the reporting
into the General Counsel due to potential conflicts of interest.
The central Risk Function should remain independent and be able
to freely challenge the rest of the business, including the legal
department. Therefore, it may be more appropriate for the Head
of Risk to have a direct reporting line to the CEO, signalling the
level of prominence and independence the risk function should
carry in the current environment.
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In our view, as the central Risk Function matures, it would benefit from
further enhancements to the risk documentation. Some specific
refinements and updates are recommended:
— refinement of roles and responsibilities: The roles and responsibilities
of the second line of defence versus the business should be more
clearly defined. Consideration should be given to identifying the
executive sponsor of risk management in line with updated reporting
lines
— emphasise independent challenge: The risk management
documentation should clearly feature the role of the central Risk
Function as providing independent challenge to the business. Both
the risk management policy and risk management guidelines should
be updated to reflect this aspect
— clarify Postmasters’ role in risk management: Postmasters should be
explicitly defined as having a critical role in ensuring that risks are
managed, similar to the first line of defence. This should be made
clear within the remit of their responsibilities and all relevant risk
documentation
— tailored reporting frequency: The frequency of reporting should vary
according to the needs of stakeholders. Reporting to the ARC should
align with its meetings’ cadence, reporting to executive forums
should be monthly, and reporting to individual group executives
should occur on a weekly basis or as often as needed
— correct terminology: The Risk Management guidelines should
correctly refer to the Risk glossary as "Risk taxonomy.” The term "risk
taxonomy” typically refers to a system of categorizing and
‘organizing risks, including the different types of risks that an
organisation faces, as opposed to the definitions of the risk terms
used within documentation.
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Appendix 6 — Principle 4 — Audit, risk and internal control
Principle 4
Audit, risk and internal controls (continued)
e GrantThornton
Risk appetite and ARC
POL has established risk appetite statements for each enterprise
risk, supplemented by formal tolerances using the same
definitions as for the risk appetite. However, it is unclear from the
reviewed documentation what process was followed to estal
these tolerances. Additionally, no quantitative or qualitative
thresholds were adopted when setting the risk tolerances.
Typically, when setting risk tolerances, we would expect that risk
thresholds, which refer to the specific levels of risk that will trigger
@ response or action, are also established.
Based on our review of the papers, Ml, and minutes of the ARC for
the period between May 2023 and November 2023, we consider
the following for attention:
— focus on risk matters: While the agendas of the ARC meetings
‘appear quite full and cover a wide range of important business
issues, it is unclear whether risk matters receive sufficient
airtime and debate outside the formal reporting. We suggest
ensuring that risk matters are given appropriate attention and
debate during the meetings.
— overhaul of ARC papers: We recommend a significant overhaul
of the format and presentation of ARC papers to ensure that
the formation is shared with the committee in a more
digestible and practical fashion. Specifically, we propose
restructuring the papers to follow a clear and consistent
format, incorporating more concise narrative text, and
‘supporting the content with data-driven management
information, such as key performance indicators and metrics.
Visual aids, such as graphs, charts, and diagrams, should be
included to provide a clear and comprehensive overview of the
risks and controls. Consideration should be given to presenting
the information in a PowerPoint format report to enhance
clarity and focus.
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— regular attendees: The relatively high number of regular attendees at ARC
meetings may be a result of the wide remit of the committee. While it was
reported that this does not obstruct the meeting, occasional distractions
were noted. As part of the next wave of governance changes, it would be
beneficial to re-consider the list of regular attendees to ensure that the right
balance is struck between breadth of representation and focus of
discussions.
— executive input and technical risk questions: There is a need to assess
whether there is sufficient time for executives to engage in technical risk
discussions and whether the current capability and skillset of the committee
allow for such interactions. This assessment will help in determining if
‘additional focus or changes are needed to facilitate more in-depth risk
discussions.
— splitting the committee: The possibility of splitting the Audit, Risk, and
Compliance committee to allow for more focused discussions has been
raised. While it is acknowledged that the NEDs are relatively stretched, and
populating another board committee may be challenging, it is worth
considering this as part of the next wave of governance changes. The current
trend in the industry is for separate Audit and Risk committees
— based on our documentation review, minutes appear to capture the key
points raised in the meetings, reflecting the discussion as occurring and there
is clear attribution of comments. Actions and owners are also recorded
— we haven't been able to observe an ARC meeting; however, from what we
can see in the minutes there appears to be a good level of discussion with the
Chair ably facilitating the debate. We noticed that both the Chair and one of
the NEDs, Elliot Jacobs, appear good challenge and ask pertinent questions
In summary, a review of the regular attendees, consideration of the time
allocated for risk discussions, and potential changes to the committee structure
should be part of the next wave of governance changes to enhance the
effectiveness of the ARC and align with industry best practices.
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Appendix 6 — Principle 4 — Audit, risk and internal control
Principle 4
Audit, risk and internal controls (continued)
RCC and Risk culture
+ We have seen a sample of minutes of the RCC that were shared
with the ARC, but we have not had sight of the packs for these
meetings. Our understanding is that the papers for the RCC
broadly duplicate those of the ARC, except for cases when the
RCC has decided that certain papers are to be re-worked before
they get submitted to the ARC, or when ARC has requested a
special report
From a good governance perspective, we would typically expect
that the papers for the ARC are appropriately tailored. While we
would usually see detailed management information and risk
reporting in the RCC, this information should be elevated for the
needs of the ARC. We acknowledge that producing two sets of
papers requires a high effort, but portant that the data is
bespoke to each committee, as this would drive a different type of
conversation.
Based on the minutes, we can see that, in line with our
‘expectations, the conversation is focused on risks at operational
level although we were not able to establish whether a more
detailed debated around specific KRIs, related root causes and risk
appetite occurs at this meeting
Similar to our observations on the ARC, there appear to be a high
number of members and attendees at the RCC, approximately 15,
with additional attendees invite for certain items. In our experience,
this large number of attendees does not necessarily facilitate a
focused conversation and efficient decision-making process
© GrantThornton
Points of note from survey and comments made to Grant
Thornton during interviews
Based on the findings from the survey and interviews regarding
risk culture at POL, it is evident that there are significant issues
that need to be addressed. We offer the following considerations
to improve the risk culture within POL:
— risk-averse culture and prominence: POL is described as very
risk-averse, and there is a lack of importance attributed to risk
management across all levels, including the top executive layer.
This has led to a conservative risk appetite and tolerances,
resulting in risks being reported outside of appetite on a
continuous basss. It is crucial to address this by elevating the
importance of risk management at all levels and fostering a
more balanced approach to risk.
— training and tone from the top: Substantial risk management
training should be undertaken across all levels of POL, with a
focus on setting the tone from the top. Top executives should
give more prominence to risk management in their daily
responsibilities and decision-making processes, utilizing
Individual risk reporting to drive informed decision-making.
— role of the Central Risk Function: The central Risk Function
should be given more prominence across the business, with
leadership from the CEO to highlight the importance of risk in
strategic decision-making, identifying opportunities, and
optimizing the use of capital.
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— alignment with strategy: Once the overall strategy is agreed
upon, the risk strategy should be aligned and reflected in more
‘appropriate risk appetite statements and risk tolerances in line
with strategic objectives. A more holistic risk assessment should
be undertaken to ensure that all pertinent risks are captured in
the risk universe. The risk strategy should also play a central
role in performance management, the appraisal process, and
outlining the required behaviours.
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Appendix 6 — Principle 4 — Audit, risk and internal control
Principle 4
Audit, risk and internal controls (continued)
Internal audit and control environment
+ POL has established an appropriate Internal Audit framework and supporting
documentation. The Internal Audit Charter has been set out to describe the
main purpose of Internal Audit, how the function approaches its work and the
rights and arrangements in place to provide quality assurance to the Board and
the ARC
+ The Charter also defines the role of the Internal Audit function, the standards
and policies that apply, reporting lines, access and principles for setting up the
Audit Plan. In accordance with good practice, the Director of Internal Audit has
a direct reporting line to the Chair of the ARC, and we understand that they
benefit from a very good working relationship
+ The Internal Audit Plan is developed on a risk-basis in line with a conventional
industry approach. The Director of Internal Audit and Risk submits a rolling risk-
based plan for approval by the ARC, we are aware that the Plan for 2024 was
just submitted for approval to ARC, although we have not seen a copy of it
+ We have also observed that the Interna Audit updates to the ARC are amongst
the better papers, in that they are concise, highlight clearly the key themes and
findings for each audit, and utilise visuals and tables to show progress and
illustrate other trends
+ Based on the review of the draft Internal Controls framework and the
information gathered about the internal control environment here are some key
points to consider:
e GrantThornton
Internal Audit:
+ Continue the good worl
Audit and the ARC Chair.
\g relationship between the Director of Internal
+ Ensure regular updates to the ARC on Audit Plan progress and changes to.
reflect evolving risk priorities.
Internal Controls Framework:
+ Conduct a thorough review of the effectiveness and practical adherence to
the Internal Controls framework.
+ Provide relevant training to ensure that all stakeholders understand and
adhere to the controls in practice.
+ Accelerate efforts to ensure that the Internal Controls framework is
effectively embedded across the organization.
Overall:
+ Proactive steps by the ARC to better embed the Internal Controls
framework and address the practical adherence to otherwise well-designed
documentation.
+ Ensure that the ARC is proactive in preparation for the new UK Code
coming into force in 2025 and 2026. The ARC should aim to attest positively
to the effectiveness of the internal controls and take necessary actions to
ensure that the control environment is robust and compliant with regulatory
requirements.
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Appendix 6 — Principle 4 — Audit, risk and internal control
Principle 4
Audit, risk and internal controls (continued)
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Subsidiaries
We have seen limited evidence, based on the
documentation we have seen, of alignment between POL
and its subsidiaries and Postmasters, as far as risk and
internal audit arrangements are concerned
In our understanding, risk is managed separately at a
franchise level, but we consider that some appropriate
‘aggregate reporting should be brought to the attention of
RCC and ARC, as required. We can see that there is some
reporting from the subsidiaries into the RCC.
We are also unsure as to how the subsidiaries and
Postmasters are captured by the Internal Audit plan,
although we understand that the Group Internal Audit
‘arrangements apply to all fully owned subsidiaries
POL to consider a more consistent and effective approach
to risk management and internal audit across all entities
within POL to also cover in particular, Subsidiaries and
Postmasters, ultimately enhancing the overall governance
and control environment.
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Based on the information provided, here are some key considerations for improving the alignment of risk
and internal audit arrangements at POL and its subsidiaries and Postmasters:
+ Alignment of Risk Management: Establish a consistent and effective approach to risk management
‘across all entities within POL, including subsidiaries and Postmasters.
Reporting and Oversight: Implement a more formal approach to aggregate reporting on risk
management and internal audit activities across all entities to ensure comprehensive oversight by the
RCC and ARC.
Inclusion in Internal Audit Plan: Develop a strategy to include the subsidiaries and Postmasters in the
Internal Audit plan, tailoring audit activities to the specific needs and risks of each entity.
Formal Governance Structure: Establish a formal governance structure that oversees risk management
and internal audit arrangements across all subsidiaries and Postmasters, with clear reporting lines and
escalation procedures to ensure consistent oversight.
Training and Development: Invest in training and development programs to ensure that employees in
the subsidiaries and Postmasters are aware of the policies and procedures related to risk management
‘and internal audit, equipping them with the necessary skills and knowledge to effectively manage risks.
Grant Thomton ©2026 I 60
Appendix 6 — Principle 4 — Audit, risk and internal control
Princip
le &
Audit, risk and internal controls (continued) - Board survey output
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The below comments have been paraphrased from comments provided by Board, GE and some SLG members via the BoardClic platform. For full details refer to the BoardClic survey.
Summary of survey comments
Respondents opined that the current
process of top-down risk should be
changed to allow individual business
Units to own their own risk and present
these to the Audit and Risk Committee
Concerns that POL is operating outside
of risk appetite in c.8 areas for the next
24 months which is unsustainable. There
is a question as to whether risk appetite is
set properly and whether the Board and
Executive are aligned on the consequences
Though the Audit and Risk Committee
reporting has evolved and improved
with new leadership, there is still a need
for more frequent reporting on data
and insights about branch profitability,
network sustainability, and potential risks
Respondents highlighted that the Board
is risk averse amid the public enquiry
and lack of adequate funding to address
risks outside of appetite, resulting in the
crystallisation of certain risks and the
continued non-mitigation of others
e GrantThornton
Summary of survey comments (continued)
On that point it is view the restrictive risk profile
whilst comprehensive is a barrier to delivery
rather than a key management tool
There is a lack of visibility of the Audit and Risk Committee
for Board members who do not sit on the committee.
There should be a mechanism for reporting/escalating
risks during gaps in Board meetings
Is there a 4st, 2nd and 3rd line of defence — not in
the way most commercial organisations understand it
Key priorities to focus on:
* Focused collaboration with the Shareholder
to communicate the impact of identified risks on
the business towards ensuring that funding is
channelled appropriately
Develop a system for risk reporting outside
of scheduled Board meetings
+ The employment of a Chief Risk Officer
Highest total
The board has sufficient information about
the company’s most important compliance
issues (anti-corruption, sanctions, anti-trust,
workplace and product safety, etc)
(Benchmark 83%)
78%
Lowest total
Investments are given appropriate
‘and robust review
(Benchmark 79%)
(sx)
Grant Thornton © 2024
a)
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Appendix 6 — Principle 4 — Audit, risk and internal control
Principle 4
Audit, risk and internal controls (continued) — LT survey output
e GrantThornton
Summary of survey comments
Respondent's comments centre around more supportive,
less risk-averse risk appetite and tolerance combined with more
risk ownership across the business, particularly regarding:
— Uncertainty around what the risk tolerance is and what
this may mean in different situations, i.e., how this may be
differ in some circumstances vs others instead of applying
a blanket approach
— The Board and GE (through being delegated down to the
GE via the Board)'s risk appetite can result in the GE’s risk
adverse decision-making by deferring sensible commercial
decisions, or placing them ‘on hold”
- Greater trust from the Board and the Shareholder across
the GE/LT for taking calculated risks which may
stretch current risk appetite and tolerances but move
execution forward
= Culture and capability concerns around risk ownership,
where it is evident that business owners do not
independently take ownership of the risks despite each
individual's remit for managing risks within their roles
- Are-education/re-set programme of risk across the
organisation (in-flight)
A restrictive risk management, appetite and tolerance which is
perceived as negatively driving, rather than informing decisions
Limited capacity of risk owners to monitor risks outside of
appetite generally, relying on the central team, and therefore
this being done infrequently (only every 6 months vs risk
‘owners viewing data live often and periodically), which leads
to decisions that are reliant on less recent, up to date data
Too much reliance by the Board and the GE on the second
‘and third lines of defence as despite high levels of operational
detail, neither are viewed as being close enough to the first line
with these
Risk assessment, mitigation and assurance activities, due to
fear of being called out, are cumbersome, and often impact
speed of decision marking, execution and innovation. This is with
the recognition that this activity is crucially important, but that
‘an overly cautious approach can also result in inefficiencies and
ineffective governance.
Grant Thomton ©2026 I 62
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Appendix 7
Principle 5 — Remuneration
© GrantThornton
Appendix 7 — Principe 5 - Remuneration
Principle 5
g
=
In this section, we explore the findings on governance
aspects related to:
+ Clarity of roles and responsibilities incl. shareholder
relationship and incentive approach
Remuneration governance and strategy
Scheme clarity
Creating capacity at Committee and in the People
function
Remuneration Committee dynamics
The below is a summary of observations and recommendations
taken from our draft Remuneration Report dated 1 December 2023.
Overview
* The lack of clarity and concerns around responsibilities and information
accuracy has raised the cost of decision making at Rem Co, diminishing
genuine accountability and effectiveness within the Committee and the
governance hierarchy. This situation is further affected by the public
profile of POL which continues to negatively impact trust and
transparency within the culture.
POL is taking steps to address this by rebuilding trust among
stakeholders through governance policy and procedure improvements
as outlined in the Simmons and Simmons report.
feviewing the historical minutes it seems the focus is predominantly on
istorical rewards schemes, limiting Rem Co's ability to consider the
wider aspects of its ToR. It would seem that significant time has been
required on design given the lack of clear longer-term strategy. As such
parties must consider, as they look to improve ways of working at Rem
Co whether the use of LTIPs in the current environment is beneficial
Key observations
+ Roles and responsibilities between Rem Co stakeholders require
clarification
The overall remuneration philosophy needs to be simplified and agreed
with the Shareholder
Capacity needs to be created to enable more forward-looking
discussion and deliver of the wider ToR remit
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Governance (specifically accountability) around reward design and
decision making between enterprise and Rem Co and Rem Co and
Shareholder needs clarification
Rem Co meeting dynamics need attention
CPO is taking the lead in developing and reporting on the remuneration
strategy (including incentive schemes) - as opposed to other senior
executive members. This should continue to ensure accountability,
transparency, objectivity and consistency in process
Rem Co to consider the benefits of engaging with internal audit to
assure the incentive plans are not inadvertently pushing the wrong
outcomes and they are not having an adverse effect on the culture.
Equally it may be worth also considering its views on the effectiveness
of the work associated with the Review Report recommendations. This
approach will support the expansion of corporate memory around
remuneration schemes and promote accountability.
The current 2025 strategy does not have Group metrics against its key
pillars. Any future strategic development should consider this as it
would provide a useful guide to Rem Co on ambition when developing
and agreeing LTIPS in particular. The appropriateness of LTIPS in the
absence of this document should be debated
GrantTromton © 202% I 6M
Appendix 7 — Principe 5 - Remuneration
Principle 5
Remuneration (continued)
e GrantThornton
Clarity of roles & responsibilities
jorically, the UKGI NED has played a significant role at Rem
Co in shaping and influencing the design of the reward
tt done in the spirit of bolstering capability at
POL it has in fact increased the complexity of the scheme,
blurted the lines of accountability and increased the level of
noise at and around Rem Co. It has also created uncertainty
around Rem Co's overall role and accountability in terms of
what it is there to proactively shape and recommend and
where Shareholder guidance is required.
Itis envisaged in the Articles and Shareholder Agreement the
structure of the incentive schemes should initially be the
preserve of Rem Co ahead of taking to Board for approval then
onto the Shareholder however, it is hard to follow this through
the review of utes.
From the description in the Shareholder Agreement, we are not
convinced that the Shareholder Representattive role is clear.
The Shareholder Agreement outlines the role of the Shareholder
Representative, but this description is drafted from the
viewpoint of UKGIs ‘representative director’ whose role
‘supports and supplements’ the role of UKGI. There is minimal
acknowledgement the role is covered by the same legal
fiduciary responsibilities as any other NEDs, and therefore is
expected to promote the success of the company first and
foremost. The Shareholder Representative appointment letter
and the UKGI’s opening statement to the Inquiry provide this
clarity, which is lacking in the Shareholder Agreement.
As part of any reset with the Shareholder, reflect and debate
the Code provision which notes all members should be
independent at Rem Co [Provision 32, P]. Whilst there may be
limited ability to change the current composition construct
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consideration to be given to the optics and ways of wor
igating actions captured to address potential independence
challenge from a wider stakeholder lens — consider the conflicts of
accountability for design and decision between the business, Rem
Co/Board and Shareholder (and its UKGI representative)
+ There needs to emerge a clear understanding of individual roles in the
achievement of strategy and accountability in that regard across the
organisation and this needs to be supported by reward
Team process
Given the histori
issues with reporting and Ml, the people function, in
terms of capability and capacity, needs review in the context of the
governance design and strategic priorities to ensure envisaged changes
can be delivered in a timely and sustainable manner
We attended the Remuneration Committee meeting held on 28
November 2023. Key points of note:
— the agenda felt relatively packed with several items to be approved
and discussed. A couple of items were postponed for a following
meeting due to time constraints.
= overall, the discussion was dominated by a debate on the objectives
for the CEO and the incentive plans
— we observed a very robust debate in relation to the objectives of the
CEO, with the Chair of the Board and the Shareholder
Representative expressing some very strong views
similarly, the LTIPs and STIPs, and future plans in relation to their
use, were subject to a comprehensive discussion
— we could see that the new Chair of the Remuneration Committee is
keen to implement more longer-term approach when it comes to the
incentive plans. We consider this po:
je.
Grant Thomton ©2026 I 65
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Appendix 8
List of interviews conducted
© GrantThornton
Appendix 08 — List of interviews conducted
Interviewees
Board Role
Henry Staunton —_ Immediately former Board Chair and Chair of
the Nominations Committee
Ben Tidswell Senior Independent Director and Chair of the
Remediation Committee
Simon Jeffreys Chair of Audit and Risk Committee, INED
‘Amanda Burton Chair of Remuneration Committee, INED
Andrew Darfoor Chair of the Investment Committee, INED
Brian Gaunt Non-Executive Director
Saf Ismail Postmaster Non-Executive Director
Elliot Jabos Postmaster Non-Executive Director
Lorna Gratton Shareholder Representative (UKGI),
Non-Executive Director
Nick Read Group Chief Executive Officer
Management Role
Owen Woodley Deputy Chief Executive Officer
Karen McEwan Group Chief People Officer
‘Anshu Mathur Group Assurance Director
Richard Taylor Group Corporate Affairs, Communications
and Brand Director
Tim Mcinnes Strategy & Transformation Director
Simon Recaldin Remediation Unit Director
Martin Edwards Network Strategy & Delivery Director
Barbara Brannon —_—Product Portfolio Director for Lottery,
Retail & Government Services
e GrantThornton
Management
Rebecca Barker
Rachel
‘Scarrabelott!
Bon Foat
Johann Appel
Chris Brocklesby
Martin Roberts
Kathryn Sherratt
Chrysanthy
Pispinis
lan Rudkin
Tracy Marshall
‘Simon Oldnall
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Role
Head of Risk
Company Secretary
Group General Counsel
Director of Internal Audit
Chief Transformation Officer
Group Chief Retail Officer
Interim Group Chief Finance Officer
Chief of Staff
Group Rewards Director
Retail Engagement Director
IT Director GLO/Horizon
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Appendix 9
List of documents reviewed
© GrantThornton
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Appendix 09 — List of documents reviewed
List of documents reviewed
Governance Framework and Foundation documents
+ Legally privileged ~ draft - POL Corporate Governance Framework
PART 1 - 181022 RS.docx
+ post-office-limited-shareholder-relationship-framework-part-1.pdf
+ POL Framework Document (NRF draft 13 April).docx
+ Redline — POL Framework Document (NRF and POL Comments)34
and POL Framework Document (NRF draft 13 April)22.pdf
+ Funding Agreement — Signed. pdf
+ 20221216 POL Articles Of Association Clean FINAL.pdf
+ POL ~ Articles of Association — NRF comments 30 March 2023.docx
+ Redline - 20221216 POL Articles Of Association and POL — Articles
of Association — NRF comments 30 March 2023.pdf
+ Investigations Governance Framework First Draft.docx
+ Whistleblowing Governance Framework — Final Draft post CIU
comments (002).doex
+ 20210928 POL Board Current & Proposed Market Standard
Unlimited Liabilities & Indemnities Position APPROVED FINAL (1).pdf
* Civil Recoveries Schedule of Documents and Timeline.docx
+ 20230301 GE GE-1 Accountabilities Updated September 2023.pptx
+ 20280301 GE GE-1 Accountabilities Updated September 2023 pdf
= No redactions required.pdt
e GrantThornton
Governance committees’ structures
+ GF Graphic 202305.pptx
+ PO Group Governance Structure Diagram WORKINGDOCUMENT
202309. pptx
+ POL GE Subcommittees 20230907 FINAL.pptx
+ Structurechart202305 updated. pdf
Board and board committees ToRs
+ 20230329POL Remuneration Committee GOV Terms Of Reference
APPROVED FINAL.docx
+ POL Remuneration Committee ToR
20280907 POL Group Executive Terms of Reference
Approved.docx
+ POL Group Executive Terms of Reference
20230523 POL ARC GOV Terms Of Reference Updated Footnotes
APPROVED FINAL.docx
+ POL Audit, Risk and Compliance Committee ToR
20230523 POL Nominations Committee GOV Terms Of Reference
Updated Footnotes APPROVED FINAL.docx
+ POL Nominations Committee ToR
+ POL Board Historical Remediation Committee Terms Of Reference
Vi (1).docx:
+ POL Remediation Committee ToR
+ POL Investment Committee ToR
Terms of reference for sub-committees
and working groups
20230301 Data Governance Committee ToR FINAL.docx
20230907 POL Group Executive Terms of Reference
Approved.docx
20230401 Health and Safety Sub Committee ToR FINAL.doc
20230401 Health and Safety Sub Committee ToR FINAL. pdf
20230302 Improvement Delivery Group 2 ToR FINAL.docx
202308 Investment Approvals and Delivery Group ToR FINAL. pdf
20230926 POL Investment Committee ToR FINAL.docx
20230906 POL Opex Committee ToR FINAL.docx
202306 Post Office Pension Plan Governance Group ToR FINAL.pdf
POL RCC ToR Approved 20230906 by GE.docx
20221214 Property Committee ToR vé FINAL.docx
20230802 Retail Committee Terms of Reference FINAL.docx
20220428 SPMP Steer Co ToR at Pages 21822 FINAL.pptx
20221214 Technology Committee Schedule 1 to Terms of Reference
FINAL.pptx
20221214 Technology Committee Terms of Reference FINAL.docx
Grant Thomton ©2026 I 69
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Appendix 09 — List of documents reviewed
List of documents reviewed (continued)
20221206 POL Rem Co MIN Signed. pdf
20230124 POL Rem Co Additional MIN Signed.pdf
20230301 POL Rem Co MIN Signed.pdf
20230502 POL Rem Co Additional MIN Signed. pdf
20230511 POL Rem Co Additional MIN Signed.pdf
20230522 POL Rem Co TIS-Written Resolution SIGNED.pdf
20230703 POL Rem Co Additional MIN Signed Redacted.pdf
20230926 POL Rem Co MIN v5 Clean.docx
Delegation of responsibilities
20230523 POL Board GOV Delegated Authorities Without
References APPROVED FINAL.docx
20230523 POL Board GOV Matters Reserved — Updated Footnotes
APPROVED FINAL.docx
POISPZBPL Spend Approvals Flow Chart 202305.pptx
+ POL Spend Approvals Flow Chart
Remuneration Committee papers and minutes
POL Rem Co Agenda & Papers 20220927 FINAL.pdf Nominations Comm
POL Rem Co Agenda & Papers 20221206 FINAL.pdf
POL Rem Co Agenda & Papers 20230301 FINAL.pdf
POL Rem Co Agenda & Papers 20230502 FINAL.pdf
POL Rem Co Agenda & Papers 20230511 FINAL Redacted. pdf
POL Rem Co Agenda & Papers 20230703 FINAL Redacted. pdf
POL Rem Co Agenda & Papers 20230926 FINAL Redacted. pdf
20231106 POL Rem Co Additional MIN Signed
20231128 POL Rem Co MIN v5 DRAFT
202305.pptx
20231218 Rem Co Mins DRAFT to Rem Co
20220927 POL Rem Co MIN Signed.pdf
20221110 POL Rem Co Additional MIN Signed.pdf
Decisions via email
utes
tee papers and mi
POL Nom Co Agenda & Papers 20220927 FINAL. pdf
POL Nom Co Agenda & Papers 20221206 FINAL. pdf
POL Nom Co Agenda & Papers 20230309 FINAL.pdf
POL Nom Co Agenda & Papers 20230606 FINAL.pdf
POL Nom Co Agenda & Papers 20230926 FINAL.pdf
20230606 POL Nom Co MIN Signed.pdf
20230309 POL Nom Co MIN SIGNED
20221206 POL Nom Co MIN SIGNED
20220927 POL Nom Co MIN SIGNED
20230926 POL Nom Co MIN Signed
20231128 POL Nom Co MIN v5
Decisions via email
e GrantThornton Grant Themion © 200 I 70
Appendix 09 — List of documents reviewed
List of documents reviewed (continued)
e GrantThornton
Au
and Risk Committee papers and minutes
POL ARC 20230724.pdf
POL ARC 20231127.pdf
POL ARC 20230516 Agenda & Papers - REDACTED 19.01.24.pdf
POL ARC Agenda & Papers 20221205 FINAL - REDACTED
19.01.24.pdf
POL ARC Agenda & Papers 20230123 FINAL - REDACTED
19.01.24.pdf
POL ARC Agenda & Papers 20230328 FINAL - REDACTED
19.01.24.pdf
POL ARC Agenda & Papers 20230925 FINAL - REDACTED
19.01.24.pdf
POL ARC Agenda & Papers 20220926 FINAL - REDACTED
19.01.24.pdf
POL ARC Agenda & Papers 20230621 FINAL (1).pdf
POL ARC Agenda & Papers 20230710 FINAL - REDACTED
19.01.24.pdf
20221205 POL ARC MIN Signed. pdf
20230123 POL ARC MIN Signed. pdf
20230328 POL ARC MIN Signed Redacted.pdf
20230516 POL ARC MIN SIGNED.pdf
20230621 POL ARC MIN SIGNED.pdf
20230710 POL ARC MIN SIGNED (1).pdf
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20230710 POL ARC MIN SIGNED.pdf
20230724 POL ARC MIN SIGNED (1).pdf
20230724 POL ARC MIN SIGNED. pdf
20230925 POL ARC MIN SIGNED.pdf
20231107 POL ARC MIN SIGNED.pdf
Board Papers and minutes
POL Board Agenda & Papers 20220927 FINAL! Redacted. pdf
POL Board Agenda & Papers 20221101 FINAL! Redacted. pdf
POL Board Agenda & Papers 20221206 FINAL! Redacted.pdf
POL Board Agenda & Papers 20230124 FINAL! Redacted.pdf
POL Board Agenda & Papers 20230309 FINAL! Redacted.pdf
POL Board Agenda & Papers 20230328 FINAL! Redacted.pdt
POL Board Agenda & Papers 20230524 FINAL! Redacted.pdf
POL Board Agenda & Papers 20230606 FINAL! Redacted.pdf
POL Board Agenda & Papers 20230711612 FINAL! pdf
POL Board Agenda & Papers 20230711 FINAL! Redacted. pdf
POL Board Agenda & Papers 20230817 FINAL! Redacted.pdf
POL Board Agenda & Papers 20230926 FINAL! Redacted.pdf
POL Board Agenda & Papers 20230926 FINAL! Redacted.pdf
Grant Thornton © 2024
I om
Appendix 09 — List of documents reviewed
List of documents reviewed (continued)
Group Executive meetings papers and minutes
POL GE Agenda & Papers 20220914 FINAL Redacted Redacted.pdf
POL GE Agenda & Papers 20221012 FINAL Redacted! ()Redacted
Vi.pdf
POL GE Agenda & Papers 20221123 FINAL Redacted! Redacted. pdf
POL GE Agenda & Papers 20221214 FINAL Redacted! Redacted, pdf
POL GE Agenda & Papers 20230111 FINAL Redacted vi.paf
POL GE Agenda & Papers 20230222 FINAL Redacted.pdf
POL GE Agenda & Papers 20230315 FINAL Redacted. pdf
POL GE Agenda & Papers 20230419 FINAL Redacted.pdf
POL GE Agenda & Papers 20230419 FINAL Redacted.pdf
POL GE Agenda & Papers 20230628 FINAL Redacted.pdf
POL GE Agenda & Papers 20230628 FINAL Redacted.pdf
POL GE Agenda & Papers 20230913 FINAL Redacted.pdf
POL GE Agenda & Papers 20231011 FINAL Redacted.pdf
20220914 POL GE MIN FINAL Redacted!.pdf
20221012 POL GE MIN FINAL Redacted!.pdf
20221123 POL GE MIN FINAL — No redactions required. pdf
20221214 POL GE MIN FINAL — No redactions required. pdf
20230111 POL GE MIN FINAL Redacted.pdf
20230222 POL GE MIN FINAL — No redactions required.pdf
e GrantThornton
Board papers and minutes (continued)
20230315 POL GE MIN FINAL — No redactions required.pdf
20230419 POL GE MIN FINAL Redactedi!.pdf
20230517 POL GE MIN FINAL — No redactions required.pdf
01.02 20231128 POL Board MIN vt REDACTED FOR UKG!
02.01 20231031POL Board MIN v3 REDACTED FOR UKG!
20220927 POL Board MIN Signed Redacted
20221101 POL Board MIN Signed Redacted
20221206 POL Board MIN Signed Redacted
20230124 POL Board MIN Signed Redacted
20230309 POL Board AdditionalMINSigned.pdt
20230524POLBoard Additional MIN Signed.pdf
20230606POLBoardMINSigned.pdf
20230711POL Board MINSigned.pdf
20230711POLBoardStrategyMINSigned.pdf
20230712POL Board Strategy MIN Signed.pdt
20230817POLBoard Additional MIN SignedRedacted.pdf
20230926 POL Board MIN Signed.pdf
01.0220231128 POL Board MIN vi REDACTED FOR UKGI
Written Resolutions
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Strategy and supporting business plans
Minister Hollinrake letter to POL Chair 29.06.2023.pdf
OS COMMERCIAL Sarah Munby to Henry Staunton Strategic
Priorities 2022.pdf
part-and-parcel-the-econmic-and-social-value-of-post-office —
London Economic Report.pdf
Purpose and vision for GT — Strategy.pptx
Grant Thomton ©2026 I 72
Appendix 09 — List of documents reviewed
List of documents reviewed (continued)
Skills Assessment .
NED Committee Membership Skills Matrix 20230821 v2.docx
Past/Ongoing Reviews
07.00 POL Board Ethos Programme 20230926 FINAL.docx
App 9 Post Office Limited Internal Audit EQA — Final Report
06.05.22. pdf
11.01.00 POL Board Annual Governance Report 20230328 FINAL
(2).docx
‘amanda-burton-report-review-of-the-transformation-incentive-
scheme.pdf
11.01.00 POL Board Annual Governance Report 20230328 FINAL
Q).doex
2022 EDI Survey Results and Insights v0.04 for publishing —
PDF.paf
ARC Committee Evaluation Report 2022-23.docx
POL Board Evaluation Report 2022-23.docx
Nom Co Evaluation Report 2022-23.docx
Rem Co Committee Evaluation Report 2022-23.docx
Legally privileged confidential — Phase 7 narratives - 081222 -
draft.docx
App 9 Post Office Limited Internal Audit EQA - Final Report
06.05.22.pdf
Remediation Committee (FKA Historical Remediation Committee)
07.00 POL Board Ethos Programme 20230926 FINAL.doc
e GrantThornton
review-of-the-governance-relevant-to-post-office-limiteds-senior-
executive-remuneration.pdf
280923 — SS and A Burton Report Recommendations Plan
September 2023.pdt
Terms of reference for sub-committees
and working groups
20230301 Data Governance Committee ToR FINAL.docx
20230907 POL Group Executive Terms of Reference
Approved.docx
20230401 Health and Safety Sub Committee ToR FINAL.doc
20230401 Health and Safety Sub Committee ToR FINAL.pdf
20230302 Improvement Delivery Group 2 ToR FINAL.docx
202308 Investment Approvals and Delivery Group ToR FINAL.pdf
20230926 POL Investment Committee ToR FINAL.docx
20230906 POL Opex Committee ToR FINAL.docx
202306 Post Office Pension Plan Governance Group ToR FINAL.pdf
POL RCC ToR Approved 20230906 by GE.docx
20221214 Property Committee ToR vé FINAL.docx
20230802 Retail Committee Terms of Reference FINAL.docx
20220428 SPMP SteerCo ToR at Pages 21622 FINAL.pptx
20221214 Technology Committee Schedule 1 to Terms of Reference
FINAL.pptx
20221214 Technology Committee Terms of Reference FINAL.docx
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Risk managemen
20221031 Group Risk Management Policy vi.4.pdf
20221031-Risk-Management-Policy-Guidelines-v1.0.pdf
2022-Technology-Risk-Appe
levels.pdf
20230216-SNOW-Risk-Management---Quick-Reference-Guide
vi.O.pdf
20230216-SNOW-Risk-Management-User-Guide v1.0.pdf
)-Statements-and-Tolerance-
Grant Thomton ©2026 I 73
Appendix 09 — List of documents reviewed
List of documents reviewed (continued)
Previous Board effectiveness reviews
+ 15 BoardandCommitteeEvaluationReport201920 POL Board
20200408 final (1)
11.01 POL Board Stereo and Committee Evaluation - Progress 2021-
22 20230124 FINAL.docx
13.02 POL Board Stereo and Committee Evaluation Report 2021-22
20220329 FINAL.docx
13.01 POL Board Stereo Evaluation Report 2022-23 20230606
FINAL.docx
08.01 POL Board Independent Audit Board Review 20210330.pdf
POL Board Evaluation Report 2022-23.docx
CONFIDENTIAL AND PRIVILEGED — 20230727 -POH ~ DRAFT BSFf
‘Ongoing POL Governance Review — AB Reviewed for confidential
informatio.docx
Role profiles
+ 05_POL Board Members & Executives.docx.
Registers of attendance at board
and committee meetings
+ POL Register of Attendance 2022-23.xIsx
+ POL Register of Attendance 2023-24 .xIsx
e GrantThornton
Board induction
+ Board induction materials and succession plans
Conflict of interest
Conflicts of Interest Policy March 23.pdf
PO Group Register Ofinterest Current (POL Only).xlsx
Assurance framework
+ POL ARC POL Control Framework 20220926 FINAL AM DO NOT
EDIT.docx
Integrated Assurance GE Submission 5 July 2023.docx
+ 20230322Policy-Exception-Note--PEN--FormFinalvi.0.docx
20231010Policy-Exception-ProcessHow-To-Guidevi.0.pdf
2023-Commercial-Risk-Appetite-Statements-and-Tolerance-
Levels.paf
2023-Governance-Risk-Appetite-Statements-and-Tolerance-
Levels.paf
2023-People-Risk-Appetite-Statements-and-Tolerancevi.pdf
PO Harm Table Ver Mar 22 FINAL. pdf
central risk team slide pack
20231206 PO Enterprise and Intermediate Risks and
Mitigations.xlsx
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Internal Audit Charter and Plans
07.05.00POLARCInternal Audit Update Appendix
120220926FINAL.pdf
Appendix 1 FY23 IA Plan Refresh Sept 22.pdt
Appendix 1 FY24 IA Plan.pdt
IA Report ARC Dec22.pdf
IA Report ARC Jan23.pdf
IA Report ARC Mar23 - Final.pdf
Internal Audit Charter V0.2 May 23.pdf
July ARC IA Update vi.pdt
POLARCInternalAuditUpdate20220329 (002).pdt
POLARCInternalAuditUpdate2022
Internal Audit and Risk Divisional Structure.pptx
External Audit management letter
POL Management Representation Letter FY2021-22SIGNED.pdf
Corporate governance policies and procedures
2022- 2023 Modern Slavery Statement - Approved.pdt
20221031 Group Risk Management Policyv1.4.pdf
2023 Contract Execution PolicyCLEAN.docx
ABC Policy v8.0 July 2023,pdf
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Appendix 09 — List of documents reviewed
List of documents reviewed (continued)
+ AML CTF Policy v10.0 July 2023.pdf
+ Business Change Management Policy v2.4 2023,pdf
+ Business Continuity Management Policy (002).paf
‘Trecity Polley) V0.2:2022.pett Culture documentation
Treasury Policy DA Matrix August 2023.pdf
Vulnerable Customer Policy V3.3 Sept 22.pdf Culture strategy.pptx
* Conflicts of Interest Policy March 23.pdf First Draft HM Governance Paper Incomplete work product (as sent * ~PO-Ways Of Working new text_red.png
+ Cyber and Information Security Policy 3.1 2023.pdt to POL on 3 April 2023(797934IH1.1).docx PO-WaysofWorking-CommitmentCardsA5.pdf
* Document Retention and Disposal Policy v2.0 Clean.pdf Postmaster Policies + Ways of working image.jpg
+ Financial Crime Policy v8.0 July 2023.pdf Stakeholder
+ FOIEIR Policy v3.1 2023.paf + Guide to the postmaster support policies v3.0.pdf
+ Group Legal Policy .pat + Network Cash and Stock Management Policy V3.1.pdf + Communications Master Stakeholder List.xlsx
+ Health and Safety Policy V8. 2023.pdt + Network Monitoring and Branch Assurance Support Policy V3.2.pdf :
+ HMRC Fit and Proper Policy Standard v5.0.pdt + Network Transaction Corrections Policy V3.2.paf
+ Law enforcement policy v1.0 Sept 21.pdf * Postmaster Account Support Policy V3.2.pdf + 00 POL Board Agenda 20240130 v7 FINAL
+ Our Code of Business Conduct.pdf * Postmaster Accounting Dispute Resolution Policy V3.2.pdf + POL Board Governance Map DRAFT.xlxs
+ Physical Security Policy v3.0.pdf + Postmaster Complaint Handling Policy V3.2.pdf
+ Remuneration Policy for the Executive Directors.msg + Postmaster Contract Performance Policy V5.0.pdf
+ POL Pay Directive 07 2023 Senior Managers.pdf + Postmaster Contract Suspension Policy V5.0.pdf FINAL DRAFT - Guide to IDG improvement tracking- 190722.docx
+ POL Pay Directive 06 2023 Middle ManagersFinal.pdf * Postmaster Contract Termination Decision Review Policy V3.0.pdf + IDG Dashboard — Progress Report October 2023 v1.1.pptx
+ POL Pay Directive 04 2023 CWU Grades Final v2.pdf + Postmaster Contract Termination Policy V5.0.pdf + ClUlt Shortfalls — Storyboard v1.0 (002).pptx
+ PO Group Contract Execution Policy Quick Reference Guide © Postmaster'Dectsion Review Polloy V2.2.pdf * Draft - Governance framework — Horizon and IT business area v2
‘August 2023 CLEAN.docx + Postmaster Onboarding Policy V3.1.pdf 120822.docx
+ PPt Procurement Policy V24.6.pdt + Postmaster Training Policy V3.1.pdf
+ Protecting Personal Data Policy v4.1 2023.pdf
+ Speak Up Policy v.8 May 2023.pdt
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Appendix 10
Glossary
© GrantThornton
Appendix 10 - Glossary
Glossary
Abbreviations Full version
POL, the Company Post Office Limited
Pol Post Office Insurance
FRESH First Rate Exchange Services Holdings Limited
FRES First Rate Exchange Services Limited
DBT, the Shareholder Secretary of State for Business and Trade
The Code UK Corporate Governance Code 2018
The Government Code Central Governance Code 2011
Foundational governance documents The Articles of Association, the Shareholder Framework
Document and the Funding Agreement
HMG His Majesty's Government
UKGI, the Shareholder Representative UK Government Investments Ltd
The Horizon IT Inquiry Post Office Horizon IT Inquiry
The Review Reports Amanda Burton and Simmons & Simmons reports
‘and recommendations
AR Appointed Representative
RACI Responsible, Accountable, Consulted and Informed.
model/matrix
ToR Terms of Reference
Do Delegation of Authority
Fol Freedom of Information
MI Management Information
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Abbreviations Full version
Lsp Learning & Development
ump Long-Term Incentive Plan
NED/INED Non-Executive Director/Independent Non-Executive Director
siD Senior Independent Director
CEO Chief Executive Officer
cro Chief Financial Officer
cPo Chief People Officer
cio Chief Information Officer
Chief Operations Officer
Chief Risk Officer
cto Chief Transformation Officer
GE General Executive
SEG Strategic Executive Group
ur Leadership Team
ARC Audit and Risk and Compliance Committee
Rem Co Remuneration Committee
Nom Co Nomination Committee
Sub Co GE Subcommittees including Risk & Compliance Committee (RCC),
Investment Approvals & Delivery Group (IAD), Retail Committee,
Improvement Delivery Group (IDG), and Health & Safety Board (HSB)
FY Financial Year
ww Willis Towers Watson
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