POL00447845
POL00447845
POST OFFICE LIMITED
BOARD REPORT
Title: Ethos Programme Meeting Date: I 26'* September 2023
. Tim Perkins, Programme .
Author: Director Sponsor: Owen Woodley, Deputy CEO
Input Sought: Noting
The Board is asked to:
i. Note the initial scope of the Ethos programme;
ii. Note the proposed timeline of the Ethos programme; and
iii. Note that a detailed programme plan will come to October Board.
Executive Summary
The Group Executive has agreed and committed to an programme of activity called “Ethos”.
Critically, the Ethos Programme is not a ‘culture change’ programme and will not set out to
own the process of changing the culture of Post Office. Instead, it is a programme that sets
the foundations to help people right across the business evolve the culture through consistent
approaches, iconic actions and systemic change over time. This approach recognises that at
its core, culture is an evolving set of beliefs and attitudes, rather than an end state to be
achieved. What the programme will do, however, is ensure that the culture of the
organisation can be measured and assured - providing clarity that is currently missing.
Ethos will increase the visibility and measurability of the Post Office’s culture to a broad range
of audiences - its employees, Postmasters, commercial partners, shareholder and other key
stakeholders. The programme is expected to run to at least April 2024.
The programme is likely to consist of 5 initial core workstreams - one to support the Group
Executive; another focused on People; a further stream on Ethics and Governance; a
workstream on Assurance, and a stream of work focused on ‘plumbing’ or ‘hardwiring’ ethos
into the organisation.
Report
Overview:
1. There has been a lot of action taken over the last 4 years to change Post Office with
significant focus on, and achievement in, addressing the criticisms of the organisation in
the Common Issues and Horizon Issues Judgments.
Strictly Confidential
POL00447845
POL00447845
@
2. Despite this work, and further work undertaken in the People team, the organisational
culture is still unclear and is not sufficiently measurable (and therefore, evidencable).
3. There are 5 key contributing factors to this:
a. there are overly complex frameworks (e.g. purpose, strategic intent, ways of
working, draft leadership behaviours, policy documents) in use across the
organisation;
b. actions and behaviours of leaders are still seen to contradict the stated
expectations in these frameworks;
c. the organisation’s guiding ethics and beliefs are not defined and, therefore
cannot be shown to be fully embedded in the organisation;
d. assurance and holistic measurement of the organisation’s cultural health is
missing;
e. Ownership of culture has not been seen to sit with the Group Executive
4. To resolve these issues, the Ethos programme will run from now until at least April
2024.
5. Ethos will focus on culture as applied to the broadest definition of Post Office as an
organisation. It is important that the ethos of Post Office is clear and evidencable to our
employees, to Postmasters, to commercial partners, to our shareholder and to other
stakeholders.
6. Efforts around culture to date have focused on employees or Postmasters in relative
isolation and the Ethos programme will draw all the current cultural transformation
activity into one place and assess it to ensure alignment and clarity (broadly using a
start, stop or continue approach).
7. Ethos will also aim to go further than previous culture activity in 2 key areas:
a. the programme will consider the role of ethics in the organisation, drawing on
the work that has started with the Institute of Business Ethics, so that Post
Office can evidence the ethics and morality in its decision making going
forwards.
b. the programme will also establish the shared guiding beliefs of the organisation
so that any values, behaviours and ways of working are aligned to, and outputs
of, the shared guiding beliefs.
Expected outcomes:
8. To succeed, the programme will need to achieve the following outcomes:
a. establish a clear definition of the guiding ethics and shared beliefs of the
organisation;
b. deliver some iconic actions that redefine culture through delivery rather than
words;
c. enable an organisation-wide reckoning with the past - it is vital that the
conditions that allowed past failings to occur are recognised, understood and
widely known;
d. radical simplification of the frameworks in place associated with culture;
Strictly Confidential
POL00447845
POL00447845
@
e. an agreed set of metrics or a scorecard to facilitate measurement of
organisational culture;
f. ongoing assurance of the organisational culture.
Approach and proposed workstreams:
The Group Executive workstream
9. To achieve these outcomes, the Group Executive must lead on defining the guiding
ethics and beliefs and on delivering the first set of iconic actions.
10. Industry best practice and research clearly demonstrates that unless these activities are
completed by the most senior leaders in an organisation, they are unlikely to become
accepted or embedded within an organisation.
11. Furthermore, given that only 39% of respondents in the November 2022 Employee
Engagement Survey agreed that senior leaders lead by example and behave in line with
our Ways of Working, it is important that the Group Executive do not just sign up to, but
also author, own and deliver against newly defined guiding ethics and beliefs.
12. To enable the Group Executive to do this, we will work with specialist external support to
provide stretch and challenge to the Group Executive on their role in setting and role
modelling culture in the organisation.
13. The Group Executive have committed to 4 days of workshops from the end of October
for this.
14. While it is important for the Group Executive to lead on defining the guiding ethics and
beliefs and on delivering the first set of iconic actions, several additional activities will be
delivered cross-functionally across the organisation. These can be categorised into four
further workstreams:
a. People;
b. Ethics and Governance;
c. Assurance; and
d. ‘Plumbing’ or ‘Hard-wiring’
People workstream
15. The People workstream will work across key moments of the entire employee lifecycle to
upweight the focus on the ethos of the organisation.
16. This is likely to include improving the performance management, recognition, ideas, and
leadership development aspects of the employee lifecycle.
17. We will be developing an immersive experience that allows all our people to understand
the conditions that led to historical failings, in advance of the conclusion of the Public
Inquiry.
18. We are reviewing all Post Office personnel who were employed prior at the time of the
historic failing to ensure that those who still work for Post Office are able to operate in
line with the cultural requirements of the organisation today and are not employed in
roles that could create a conflict of interest in resetting the organisation post the Group
Litigation.
Strictly Confidential
POL00447845
POL00447845
@
Ethics and Governance workstream
19. The Ethics and Governance workstream will introduce a simple ethical decision-making
framework for use by anyone in a decision-making role in the organisation. This is a best
Practice approach, used for example in the Home Office following lessons learnt from
Windrush about the lack of engagement and empathy with those impacted. It will be
based on the guiding ethics defined by the Group Executive and will be particularly
important in decisions made concerning Postmasters.
20. The Ethics and Governance workstream will also consider the need for an Ethics Advisor
to the Board, or lead Non Executive Director with responsibility for overseeing ethics.
21. Finally, the Ethics and Governance workstream will aim to simplify governance. This will
be led and implemented by the Chief of Staff but given the impact that governance has
on the ethos and culture of the organisation, it is included here for completeness.
Assurance workstream
The key activities of the Assurance workstream will include as a minimum:
22. The creation of an agreed set of measures or a scorecard of the cultural health of the
organisation. This measurement needs to consider the cultural health of the business as
experienced by our employees, Postmasters, commercial partners and _ other
stakeholders - it is therefore more all-encompassing than any existing measures.
Progress needs to be measured over time and the creation of a single, agreed scorecard
will ensure that the measures of cultural health used by the Shareholder is the same as
the internally used measures.
23. The agreed set of measures or scorecard will need to include people measures -
including engagement and EDI metrics, Postmaster measures - including engagement
and Common Issues Judgment remediation metrics - and other measures of the cultural
foundations of the organisation potentially including Speak Up and safety.
24. The Assurance workstream will also consider defining how, beyond quantitative
measurement, Post Office assures that its guiding ethics and beliefs are delivered
against by our people. Longer term, this is likely to be through the performance
management cycle, but in the short to medium term there may be a requirement for
roles with specific responsibility for assuring the culture of the organisation.
‘Plumbing’ or ‘Hard-wiring’ workstream
25. The key purpose of a ‘Plumbing’ or ‘Hard-wiring’ workstream is to ensure that all aspects
of the organisation are aligned to the defined guiding ethics and beliefs of the
organisation - this includes the language and nomenclature used across the business,
the symbols of ethos of the organisation, and the rituals and routines in use. There is
also a need to ensure that radical simplification of existing frameworks is a deliverable
for the programme.
Next Steps & Timelines
26. A full programme plan for Ethos will be brought to the October Board for review and
discussion.
Strictly Confidential
POL00447845
POL00447845
Appendix
Proposed workstream plan to get there
Plumbing
Ethics and Governance Assurance
Group Executive People
a Sean & © }
Revisit purpose Performance Ethical decision making Measurement Comms
management & framework
recognition Interim assurance rotes Policies
Define ethics and
shared beliefs
ESG Committee
Leadership capability
investment Ethics Advisor/NED
Define required
behaviours
Management of those Governance clarity
Iconic actions who cannot/will not
change SLG make up
Leadership cascade
Review of
consultants/contractors
Strictly Confidential