POL00448414
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Grant Thornton Governance and Board Effectiveness Reviews: recommendations tracker as at 26 July 2024
Key — blue shading indicates recommendations that are contingent on the outcome of the strategic review
UK Corporate Recommendation Status Timeframe Owner
Governance Code
les
Board Leadership I Establish a Group strategy/ambition for POL to frame, prioritise, and guide governance design, decision-making
and Company structures, and inform culture and performance management. Key will be the need to:
Purpose e Frame for the Shareholder what I ¢ The Board has the commissioned a Strategic Review by Teneo — this is_I The outcomes POL Board
See GT POL is about (purpose), where it in train, and the final outputs are expected to be provided circa of the Strategic
iGovernanice wants to get to (strategy and vision) October 2024. Review are
Review, Page 9 and howit is going to meetits aims. I ¢ In the meantime, POL’s intent to 2025, annual business plan and anticipated
and further 2024/25 Outcomes remain relevant, including to inform objective circa October
Observations/ setting and the performance management framework. 2024
recommendations e Ensure the right balance and clarity I ¢ Board focus will be informed by the outputs of the Strategic Review As above POL Board
atta) around POL’s future commercial I and the themes arising from the POHIT Inquiry. however with
ambition and its social purpose. the themes
arising from the
Inquiry being
regularly
considered by
the Board
Division of Clarify the role of the Shareholder versus the Board, including the setting of objectives for POL. Key will be the
Responsibilities need to:
See GT e Review and update foundational I ¢ UKGI on 5 July 2024 issued a revised draft of the Shareholder September Company
Governance governance documentation to Relationship Framework Document in Government’s new standard 2024 Secretary and
Review, Page 9 enhance clarity, aligning with template along with a Delegations Letter. Legal Director
and connected guidelines such as Ie The updates will clarify POL’s CEO role in relation to MPM and the AO
further "Managing Public Money", and role - in line with best practice.
observations/ clearly defining principles Ie — UKGl are looking to have the revised Shareholder Framework
recommendations impacting day-to-day operational Document and Delegations Letter in place ahead of the
at #2(a) approvals between POL and the commencement of P7 of the Inquiry and the September Board meeting
Shareholder. is being targeted for Board consideration. A working group is being
established at POL to support this review exercise and will aim to
clarify any ambiguities across foundational governance documents.
@ An MPM and AO briefing note was prepared and settled with UKGI and
issued to the Board and Executive on 28 June. Overview/ introductory
POL00448414
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Grant Thornton Governance and Board Effectiveness Reviews: recommendations tracker as at 26 July 2024
MPM and AO training for the Board and Executive is scheduled for
September 2024.
« Address any duplication between I ¢ See above — while UKGI has said that amendments to the Shareholder I September Company
the Articles of Association, the Framework Document are unlikely to give rise to subsequent changes 2024 Secretary and
Shareholder Framework to AoA, a review will be undertaken and UKGI have advised that the Legal Director
Document, and Funding Shareholder is willing to consider amendments on a case by case basis.
Agreement.
e Clarify the achievability of Matters I e To be considered as part of the Strategic Review. The outcomes POL Board
Reserved for the Board and address of the Strategic
any points of contention with the Review are
Shareholder. anticipated
circa October
2024
e Evaluate whether an alternative I e To be considered as part of the Strategic Review. The outcomes POL Board
governance or capital structure can
deliver better outcomes for all
stakeholders, based on shared
objectives and market-wide
sentiment.
To note that a session in early July ‘Strengthening the Postmaster voice’
considered alternative governance structures. This was led by the POL
Communications Director with the Postmaster NEDs attending, a
member of the NFSP, and 2 external speakers. A follow up session for
mid-August is scheduled.
Ultimately any changes to the AoA and external finance arrangements
are matters for the Shareholder.
of the Strategic
Review are
anticipated
circa October
2024
Composition,
Succession and
Evaluation
See GT
Governance
Review, Page 10
and
further
observations/
recommendations
at #3(a)
Strengthen succession planning and ens
uring effective management of the people agenda. Key will be the need to:
@ Manage the composition of the
Board to maintain a_ strong
decision-making body and agree
key criteria for assessing the
required composition, including by:
— considering the operational
horizons of the historic
Horizon IT Inquiry, the
continuing transformation to
stabilize the operational
platform, and the future
strategic options; and
— evaluating the skills and
experience gaps in technology,
digital transformation,
Skills matrix review of NEDs has been undertaken.
Upcoming NED recruitment has been informed by the skills matrix
results and the prevailing context within which POL is operating and
the future outlook with Job Descriptions for incoming NEDs tailored
accordingly
Completed
June/ June 2024
The Nominations
Committee will
oversee the NED
recruitment
process and the
Chair of the
Nominations
Committee will
report routinely
on progress to
the POL Board
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Grant Thornton Governance and Board Effectiveness Reviews: recommendations tracker as at 26 July 2024
government relations, and
franchise expertise.
Build out L&D across the Board, To be informed by the skills matrix review and outputs from the The Skills matrix I Nominations
including by: Strategic Review. has been Committee
— considering strategic priorities, In the meantime AO and MPM training is being scheduled for early completed. As
principal risks, and skills September 2024 and EDI training is due to be delivered also. above, the
matrices to supplement any Specific training is already provided for ARC members and expert outputs of the
succession planning work. sessions and guidance have also been provided for Remediation Strategic
Committee members.
Review are due
circa October
2024
Evaluate and develop the
Postmaster NED role, formalise
Postmaster rotations and review
the selection process.
Term extensions for both Postmaster NEDs have been approved by the
Shareholder and a further term extension for one of the Postmaster
NEDs is with the Shareholder for consideration. If granted, both
serving Postmaster NEDs would remain on the Board until June 2025
providing continuity. The selection process for the Postmaster NEDs
was reviewed as part of current recruitment process with revised
eligibility criteria set. The proposed Induction Schedule and materials
for the incoming Postmaster NEDs to be reviewed taking feedback from
the current Postmaster NEDs with the Company Secretary to liaise with
the Postmaster NED recruitment working group to revise the materials
and induction activities as needed.
September
2024
Saf Ismail, Elliot
Jacobs and
Company
Secretary
Ensure NomCo has the capacity to
deliver against its wider ToR,
including by:
— considering the membership
of NomCo to align with market
norms, comprising the Chairs
of the Board and Committees.
NomCo membership has been extended to the ARC & RemCo Chairs
and the Interim Chair has also been appointed to NomCo to Chair the
NomCo.
Completed June
2024
Agree the ownership of the People
agenda between Board and
Committees, and improve
monitoring in areas such as culture
and wider ED&l.
A Culture Dashboard has been prepared and was presented to the
Board at the Board Strategy Away day on 8 July. The Culture
Dashboard is due to be presented at Board on a bi-annual basis along
with the results from the full and pulse Postmaster and Employee
survey results. These sessions have been added to the Board Forward
Planner. The Culture Dashboard includes EDI target achievement. A
new RemCo People dashboard has been produced tracking key People
metrics including EDI, with KPIs to be added.
Completed July
2024
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Grant Thornton Governance and Board Effectiveness Reviews: recommendations tracker as at 26 July 2024
e Address governance issues at September RemCo
Remco, including by: e — Skills matrix review of NEDs has been undertaken. 2024
— reviewing the balance of Ie The upcoming NED recruitment will provide an opportunity to review
membership and RemCo membership.
independence; e Anew RACI was presented to the July RemCo.
— considering reward design and I e —STIP and LTIP reward schemes subject to substantive review in
suitability of current award FY2023/24.
schemes. e The next substantive review of remuneration strategy will be taken
forward as against the outputs of the Strategic Review.
e Ultimately the Shareholder has determined that the Shareholder
Representative Non-Executive Director will sit as a member of RemCo.
General: MI, Review underlying processes. Key will be the need to:
transparency, e Review rolling agendas to ensure I ¢ Board focus will be informed by the outputs of the Strategic review and I The outcomes Chair
agenda & sufficient balance between the themes arising from the POHIT Inquiry. of the Strategic
minutes etc historical, operational, forward I e In the meantime the Interim Chair is closely involved in the Review are
See GT looking and strategic matters. construction and approval of POL Board Agendas and has implemented I anticipated
Governance changes to the content and running order of Agendas to slim content circa October
Review, Page 11 where possible and maximise valuable Board discussion time. 2024. The
Board is
regularly
appraised of
themes
emerging from
the Inquiry.
e Provide greater oversight of the I e Updates on the work of NomCo and RemCo are standing agenda items I Completed July
work of NomCo and RemCo, with on the POL Board Agenda and time is allocated for Committee Chairs to I 2024
time allocated for full updates and provide verbal updates. Additionally all NEDs have been provided with
debates on delivery against ToRs to access to NomCo and RemCo materials to ensure transparency and
assess whether elements of the equivalent access across NEDs.
people agenda need to be picked I e As above going forward the Culture Dashboard will be presented bi-
up at Board. annually to the Board along with the Postmaster and Employee pulse
and full survey results.
e Consider regular informal get- I ¢ NED onlysessions are regularly held. Additionally Board dinners have Completed July
togethers to allow for unstructured been reinstated since the appointment of the new Interim Chair. 2024 and
discussion and building of trust and remains on
engagement. track
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Grant Thornton Governance and Board Effectiveness Reviews: recommendations tracker as at 26 July 2024
e Ensure higher-quality Board I e The Interim Chair has requested shorter, sharper and more strategically I September Deputy
papers, with simplified and focused Board papers; the ‘Reading Room’ will no longer be used. 2024 Company
streamlined content, and overhaul I e Board paper template is being updated and will provide guidance to Secretary
MI and consider dashboards for authors on ensuring the right focus for Board decision-making/strategic
measurement and insights, responsibilities.
including by: e Additional Dashboard reporting will be provided to the Board from July
— considering the use of training in respect of cultural metrics and Whistleblowing and Investigations.
/ Al tools and potentially Ie The Secretariat are empowered to return papers to authors that do not
shutting down the reading meet the guidelines.
room; and
— empowering the Secretariat to
reject papers which do not
meet standards for the board.
© Maintain the discipline around Ie At the July Board meeting the Chair devoted a considerable amount of I Completed July
actions and the matters arising to time to work through outstanding matters arising and to identify 2024
ensure proper oversight, actions that could be closed. Matters arising are allocated to an
accountability and delivery. executive member in addition to SMEs to ensure oversight,
accountability and delivery. The Chair has made it abundantly clear
that the expectation of the Board is that all matters arising must be
attended to ahead of the next scheduled Board meeting.
e Assess satisfaction with current I e Similarly to papers the narrative style of minutes has been reviewed Completed July
minutes accuracy and style, and if. and a more concise format is to be adopted for Board and Committees I 2024
satisfactory, continue with following the agreement of the directors. The minutes for the July
consistent reviews and approvals. Board meeting and Strategy Days have been prepared in this more
succinct style.
© Promote transparency by allowing I ¢ Access in Diligent has been updated so that all NEDs (save in conflict Completed July
all NEDs to access content from situations) have access across all Board and Committee papers. 2024
Board and Committee meetings.
e Ensure decisions are not being I ¢ Ongoing. September Chair
taken outside of the formal 2024
governance structure and without
proper debate.
1(a)I Board Leadership I Consider and address the need to: To be considered as part of the Strategic Review. The outcomes POL Board
and Company e Agree strategic design of the Strategic
Purpose principles/resolve the lack of a Review are
See GT single set of metrics and KPIs linked anticipated
Governance to strategy.
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Grant Thornton Governance and Board Effectiveness Reviews: recommendations tracker as at 26 July 2024
Review, Page 16 circa October
and Appendix 3 2024
e Resolve the lack of ownership of As above the Culture Dashboard will be presented to the Board ona bi- I Completed July
culture at the Board level. annual basis at the same time as annual and pulse survey results for 2024
Postmasters and employees.
e Develop a rolling five-to-ten-year To be considered as part of the Strategic Review. The outcomes POL Board
funding facility with shorter Whilst able to request a change in approach, ultimately funding of the Strategic
budgeting cycles feeding in for facilities and their duration are a matter for the Shareholder. Review are
long-term strategic anticipated
investment/planning. circa October
2024
e Rebalance the over reliance on The appointment of the Interim Chair and the filling of the leadership September Chair
Shareholder input. void has done much to assist with this. 2024
e — Ensure timely agreement of reward Reward structures for FY2023/24 were agreed and communicated in Completed RemCo
structures reasonable proximity to the commencement of the financial year.
e Improve trust levels between Identification of common ambition will flow from the Strategic Review. I The outcomes POL Board
Executive and Board members, As above, Board dinners have been reinstated and Executive members I of the Strategic
including by agreeing a common may be invited to attend from time to time. A reception was held on 8 I Review are
ambition and improving informal July following the first Strategy session which both Board and Executive I anticipated
engagement (eg dinners, off-site members attending. circa October
visits). 2024
e Ensure the Board and SEG work As above, a Culture Dashboard has been prepared and presented to Completed July I POL Board
collectively to unify and drive Board. As well as going to Board on a bi-annual basis the Culture 2024 and
clarity through culturally aligned Dashboard will be presented to the Executive every 2 months. Reward remains on
measures of performance. schemes contain metrics in respect of cultural performance. track
Additional considerations arising from Whilst discussed at the July Strategy Away Days, these issues will be The outcomes POL Board
the Board Effectiveness Review considered as part of the Strategic Review. of the Strategic
¢ On POL’s longer-term future — as Review are
part of the discussions at the anticipated
strategy away day in July, identify circa October
responsibilities for achieving 2024
collective ambition, confirming
accountability, and considering
wider market dynamics (i.e. market
failure and ESG).
Grant Thornton Governance and Board Effectiveness Reviews: recommendations tracker as at 26 July 2024
POL00448414
POL00448414
Additional recommendations being taken forward at an operational level
e Agree strategic design principles Dependency is outcome of the Strategic Review. Once a strategy is H2 2024 Interim CFO and
with the Board and establish a signed off, key outcomes, KPIs / balance scorecard can be determined S&T Director
cadence for progress updates and periodically reported on.
e Agree cultural / leadership New behaviours, business outcomes and common SLP objectives were I From August CPO
principles, hold each other to launched in June / July 2024. There is no specific standalone culture 2024
account and role model them. programme within the People Plan (PP) — rather, each of its component
Develop a culture dashboard with parts will organically improve culture, with progress monitored via the
performance management as a key culture dashboard that was developed in partnership with the Institute
pillar. for Business Ethics. Culture is the collective accountability of the LT.
The Group Assurance and Risk Director (GARD) (once appointed) will
provide assurance over progress. The Assurance culture dashboard will
be consolidated with the People Team’s culture dashboard so that
there is one consolidated version.
Create a high level communication To be taken forward as part of communicating the Strategic Review H2 2024 Interim
plan with key milestones. Consider conclusions. Corporate Affairs
3 themes around: Director
- Reset (governance and and S&T Director
leadership)
- Renew (strategic framework)
- — Reboot (culture and
behaviours)
Highlight expectations and metrics
under each.
2(a) I Division of Consider and address the need to: To be considered as part of the Strategic Review. The outcomes POL Board
Responsibilities e — Clarify Board and Shareholder roles Current arrangements involve the Shareholder sending an annual letter I of the Strategic
See GT and responsibilities, including in to the Chair of the Board setting out priorities for the year. These are Review are
Governance relation to: then reported on by the Company at the Quarterly Shareholder anticipated
Review, Page 17 — setting POL’s purpose; and Meeting. circa October
and Appendix 4 —__ setting POL’s objectives. ap
POL00448414
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Grant Thornton Governance and Board Effectiveness Reviews: recommendations tracker as at 26 July 2024
Additional considerations arising from Astanding agenda item at the commencement of all POL Board Completed July
the Board Effectiveness Review meetings is the Chair calling for directors to disclose any conflicts of 2024 and
© Chair to manage and navigate interest. In practice the Chair speaks specifically to this issue and remains on
conflicts of interest to ensure open provides directors with an opportunity to advise any conflicts. track
debate of topics at Board.
e Consider increasing capacity at the Recruitment for an apprentice wishing to undertake a corporate September Deputy
Secretariat level to act as a governance apprenticeship standard is in progress, in order to reduce 2024 Company
strategic conduit between the administrative load on more senior member of the team and improve Secretary
Board and Executives. capacity to operate more strategically. Given the ongoing Strategic
Review, it is anticipated that a refined operating model will reduce
workload within the Secretariat as will the conclusion of the Inquiry, so
no further recruitment of additional resource is proposed at this time.
e Board to be robust in pushing back At the July Board meeting some matters were referred back to the CEO I Completed July
decisions to the executive for decision making. The Board will remain vigilant and the Chair will 2024 and
management that fall within their guard the Board Agenda from taking on matters within the delegated remains on
remit. authority of the CEO and Executive. track
Additional recommendations being taken forward at an operational level
¢ Streamline the executive level Awholesale review of the executive level committees that are in place I From October - I Chief of Staff
committees, reviewing all ToR will be undertaken to assess their utility, ToR and membership. The March 2025
associated materials, decision executive level committees need to be mapped with responsibilities (and ongoing
making structures, protocols, and accountabilities to the Board sub-committees. This is an ongoing thereafter)
authority levels, and piece of work over the next 6-12 months. The effectiveness of the new
accountabilities. Further reduce structures should be reviewed by Group Assurance.
the number of CEO direct reports
and identify leadership capacity
and capability.
« Embed new Leadership Team with There will be alignment with the conclusions of the Strategic Review Q3 2024 CPO
performance based job and POL is already improving how performance is managed through
descriptions, clear RACI system the introduction of items such as 360 feedback . OD work includes a
and focus on performance review of accountabilities, with a focus on SEG, the LT, SLP and Band 4.
management This won’t result in new job descriptions as that could result in
‘amendments to role’, but will clarify who is accountable for what and
remove duplication.
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Grant Thornton Governance and Board Effectiveness Reviews: recommendations tracker as at 26 July 2024
3(a) I Composition, Consider and address the need to: As above the skills matrix has been completed and the results of this Completed June
Succession and Mitigate risks to corporate have fed into the Job Descriptions for the incoming NEDs to be 2024 and
Evaluation memory, fill skill gaps, and address recruited remains on
See GT lack of diversity. track
Rove Pose a0 I * Resolve the absence of a An Interim CFO has been appointed for a 12 month period, pending the I September Nominations
’ " permanent CFO. recruitment of a permanent CFO. The previous permanent CFO has 2024 Committee
nd geome now resigned as a director of the POL Board. An application to the
Shareholder has been made seeking approval for the recruitment and
remuneration structure for a permanent CFO.
* Progress the Given the change in Board membership from the time the previous N/A N/A
actions/recommendations from
the last Board Effectiveness
Review
Board Effectiveness Review was conducted and that many of the
actions and recommendations are similar to those from the GT BER, it
is proposed that the actions and recommendations from the GT BER,
Governance review and Remuneration governance review are focused
on.
Additional considerations arising from
the Board Effectiveness Review
e Build skills matrices considering
not just technical skills such as gaps
in technology, digital
transformation, government
relations, and franchise expertise
at Board, but wider attributes such
as experience in crisis
management, transformation,
strategy, and EDI.
The skills matrix exercise that was conducted in June also asked
directors to assess their competence across wider attributes. The
results of the skills matrix exercise were considered by the
Nominations Committee in June 2024.
Completed June
2024.
Additional recommendations being taken forward at an operational level
POL00448414
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Grant Thornton Governance and Board Effectiveness Reviews: recommendations tracker as at 26 July 2024
Consider potential skills gaps and OD principles were signed off in June by SEG and includes the From August CPO
urgently address Executive identification of fundamental capability gaps, some of which are 2024
succession planning, including known and currently filled via interim arrangements (e.g. incident
ED&I principles, with input from management, data governance, and e2e transformation delivery). The
NomCo and SEG. planned talent forum process will identify future skills requirements
based, in part, on the Strategic Review conclusions and capability
e Review the recruitment process, needs identified in order to execute on the strategy. Initial focus will be
addressing concerns and at the SEG, LT and SLP level.. The People Plan also includes the delivery
enhancing consistency around of a new holistic ED&I strategy by October 2024, with integration into
ED&l. the Talent Management Process by December 2024, accountability
built into SEG and SLP populations by March 2025, and data analysis
and reporting by January 2025.
e — Establish clear policies and Forms part of the talent and performance management processes H2 2024 CPO
processes for people review which is scheduled to be embedded by March 2025
management, including job
description accountabilities and
performance management
procedures.
4(a) I Audit, Risk and Consider and address the need to: Splitting Audit and Risk Committees has been considered and rejected I September ARC Chair
Internal Control * Ensure ARC agendas adequately by the Board in the past year, will reconsider. Additional capacity for 2024
See GT provide for sufficient focus on risk considering investment risk created with the formation of the
Governance matters (possibly consider having Investment Committee. The Investment Committee ToR have been
Review, Page 21 separate Audit and Risk updated to add the ARC Chair as a standing invitee. Will continue to
and included at committees). monitor.
Appendix 6 e Ensure the attendance at ARC The ARC Chair has confirmed that the following will be added to September ARC Chair
provides a balance of upcoming ARC agenda: 2024
representation and allows for the — ARC attendance, balance of representation, capability and time for
right focus of discussions. executive contribution.
e Provide sufficient time at ARC for
executives to engage in technical
risk discussions and ensure the
current capability and skillset of
the ARC allows for such
interactions.
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POL00448414
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Grant Thornton Governance and Board Effectiveness Reviews: recommendations tracker as at 26 July 2024
e Ensure ARC takes proactive steps to This will be added to the ARC agenda for consideration at an upcoming I September ARC Chair
better embed the Internal Controls meeting - including monitoring the work being done by Group 2024
Framework and address the Assurance under the new interim arrangement combining reporting
practical adherence to lines for second and third lines.
documentation.
e Ensure ARC is proactive in its Training was provided earlier in the year to ARC members on the Code _ I September
preparation for the new UK Code changes being introduced. 2024 ARC Chair
coming into force in 2025 and 2026 This will be added to the ARC agenda for consideration at an upcoming
and to attest positively to the meeting and there will be subsequent discussion with the Board on the
effectiveness of the internal pace of adoption of emerging best practice.
controls and compliance with
regulatory requirements.
Additional recommendations being taken forward at an operational level
e = Root-and-branch review of POL’s For the successful candidate for the Group Assurance & Risk Director From August GARD
control environment and risk to take forward upon their appointment (1 August) 2024
management across the business -
the operation of the RCC, risk
culture, risk strategy, risk function,
its remit, risk reporting, appetites,
tolerances and thresholds,
documentation, and training.
5(a) I Remuneration Consider and address the need to: Aseparate RemCo decision-matrix has been developed. Completed RemCo.
See GT e = Clarify governance and Anew RACI was presented to the July RemCo.
Governance accountability around reward On 5 July 2024, UKGI issued a revised version of the Shareholder
Review, Page 22 design and decision making at Relationship Framework Document in Government's new standard September
and Appendix 7 RemCo and as between RemCo, the template along with a Delegations Letter. This will be reviewed for 2024
Board and the Shareholder. clarity on respective roles as between RemCo and the Shareholder.
e Simplify the overall remuneration The next substantive review of remuneration strategy will be taken The outcomes RemCo
philosophy. forward as against the outputs of the Strategic Review. of the Strategic
Review are
anticipated
circa October
2024
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Grant Thornton Governance and Board Effectiveness Reviews: recommendations tracker as at 26 July 2024
e Resolve concerns about I e Draft People Dashboard presented to July RemCo — this will be Completed July RemCo
information accuracy/MI. presented to each RemCo going forward and improvements made, 2024
based on feedback.
¢ Develop a structured rolling 12- I ¢ Forward agenda developed and presented at each RemCo. Completed RemCo
month agenda for Remco to focus I ¢ More timely communications provided on FY23/24 reward schemes.
on effective and timely agreement I e RemCo ToR reviewed; last updated in March 2024.
and communication of future
reward schemes and address wider
aspects of RemCo’s ToR.
12