2.1 Minutes from 6 DecemI
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Strictly Confidential
MINUTES OF A MEETING OF THE BOARD OF DIRECTORS OF POST OFFICE LIMITED HELD ON TUESDAY 06
DECEMBER 2022 AT 20 FINSBURY STREET, LONDON EC2Y 9AQ AT 13:00 PM
Present: Henry Staunton Chairman (Chairman) (via Teams)
Tom Cooper Non-Executive Director (TC)
Zarin Patel Senior Independent Director (ZP)
Lisa Harrington Non-Executive Director (LH)
Saf Ismail Non-Executive Director (SI)
Elliot Jacobs Non-Executive Director (EJ) (via Teams)
Ben Tidswell Non-Executive Director (BT)
Brian Gaunt Non-Executive Director (BG)
Nick Read Group Chief Executive Officer (NR)
Alisdair Cameron Group Chief Finance Officer (AC)
In attendance: Rachel Scarrabelotti Company Secretary (RS)
Navin Batra Strategic Financial Planning & Analysis Director (NB)
Tim McInnes Strategy and Transformation Director (TM)
Zdravko Mladenov Group Chief Digital and Information Officer (ZM)
Gareth Clark NBIT Director (GC)
Anne-Marie Hearne Head of NBIT Training and Information (AMH)
Martin Roberts Group Chief Retail Officer (MR)
Martin Edwards Network Strategy & Delivery Director (ME)
Ben Foat Group General Counsel (BF)
Simon Recaldin Historical Matters Director (SR)
Martin Hopcroft Director of Health & Safety, Environment and Business
Continuity (MH)
Apologies: Carla Stent Non-Executive Director (CS)
Action
1. Welcome, Officer Changes and Conflicts of Interest
A quorum being present, the meeting was opened.
It was RESOLVED that Henry Eric Staunton, having consented to act, be appointed as a
Director of the Company with effect from 1 December 2022 and that the Company
Secretary be instructed to file form AP1 with the Registrar of Companies.
It was NOTED that the shareholder of the Company had appointed Henry Eric Staunton as
Chairman of the Board. It was RESOLVED that Henry Eric Staunton be appointed as
Chairman of the Board. Given the new Chairman was attending the meeting via Teams, BT
agreed to assist with facilitating the meeting.
BT called for the Directors to disclose any conflicts of interest. The Chairman declared a
conflict of interest, being that his wife held 39, 523 ordinary shares in WH Smith ple, one of
the key strategic partners of the Company. Following discussion, noting that the Chairman
did not participate in the vote, it was RESOLVED:
(i) The conflict of interest as disclosed by the Chairman be authorised on the
basis of the following conditions:
Until such time as the Chairman’s wife has divested of all her shares in WH
Smith ple:
(a) the Chairman will be excluded from the receipt of information, the
participation in discussion and/ or the making of decisions whether at
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meetings of the Board or otherwise which directly impact WH Smith ple;
and
the Chairman is asked to provide the Company’s Group General Counsel
with notice prior to his wife divesting any shares in WH Smith plc,
purchasing any additional share capital in WH Smith plc, and take into
account any reasonable request by the Group General Counsel not to
divest or purchase shares at that time;
(ii) that the Company Secretary be directed to update the Company’s Register of
Director's Interests to include the conflict of interest and the conditions in
respect of the authorisation of the conflict of interest.
(b
The remaining Directors declared that they had no conflicts of interest in the matters to be
considered at the meeting in accordance with the requirements of section 177 of the
Companies Act 2006 and the Company’s Articles of Association.
2. Minutes and Matters Arising
TABLED and NOTED were draft Minutes from the Board Meeting of 1 November 2022.
Subject to the making of an edit requested by SI, the Board RESOLVED that the Minutes of
the Meeting held on 1 November 2022 be APPROVED as a correct record of the Meeting
and be signed by the Chair.
The Board NOTED the action log and status of the actions shown. SI queried progress in
relation to item 2 which had been marked as closed. ACTION BT requested that this item
be re-opened and re-assigned to MR, with a view to resolution come January 2023. AC MR/SI
suggested that SI re-draft the action item and provide this to RS for inclusion in the action
log.
TABLED and NOTED was a report, ‘NBIT — Customer Facing Screen Options’. NR observed
that this was a cost issue balanced against a customer service issue. LH noted that a
Postmaster might choose to pay for this option, although capability for this option would
still then have to be built.
3. Committee Reports (verbal)
3.1 Remuneration Committee
LH updated the Board as follows:
© the Committees’ Terms of Reference needed further revision and the item would
be withdrawn from the Agenda today;
¢ The Committee had approved for recommendation to the Board an increase in the
NED annual aggregate fee cap;
« Benchmarking had been considered;
¢ An EDI update had been provided and the Committee had requested details of
action planning. ACTION NR would share the GE EDI commitments; NR
© STIP targets had been discussed, particularly in relation to HSS and IDG. The
Committee were not comfortable to change targets mid-flight.
3.2 Historical Remediation Committee
BT updated the Board as follows:
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© Decisions in relation to the OHC process, Detriment 2 and the outstanding balance
issue were due later in the meeting;
© ONHSS, progress remained steady, although the balance of cases remaining were
complex and there was the issue of late applications to the scheme;
© On OHC, good progress was being made in respect of non-pecuniary settlements.
There were some complex pecuniary claims;
© Inrelation to the public interest only cases, a mediation was scheduled for
December and the team were hopeful of arriving at a commercial agreement
there.
Nominations Committee
LH updated the Board as follows:
© The Committee has resolved that the Chairman be recommended for appointment
as Chair and a member of the Nominations Committee, as well as a member of the
Remuneration Committee;
The Board and Committee Evaluation process for 22/23 had been considered, and
an internal review process would be instigated with responses due by the end of
December, given ZP’s departure in early 2023;
© The NED recruitment process was progressing. The CEO Report had referenced
potential challenges to attracting suitable candidates, and whilst a number of
candidates had departed the process from the longlist, the Evaluation Panel were
pleased with the calibre of applicants on the shortlist.
Audit, Risk and Compliance Committee
BT noted that CS was an apology to the meeting, however CS had provided BT with a
summary of the ARC meeting of S December. BT spoke briefly to the note outlining key
highlights. In relation to Project Pensions Assurance, it was RESOLVED that the ARC
recommendation to the Board that Board delegate authority to the Group Executive to
determine the most appropriate rollout of the communication and reduction in pension in
cases of overpayment be and is hereby APPROVED.
CEO Report
Minister Hollinrake MP, C Creswell and assistant joined at 13:30.
TABLED and NOTED was the CEO report.
The Chairman welcomed the Minister and passed over to NR to present the CEO Report.
NR spoke to the report advising that the Company had had a very good half year in terms
of trade, and that the Company’s travel and bill payments businesses had continued to
perform well. The mails business was behind however, and we were seeing a tightening in
consumer confidence, with a slowdown in banking and travel. The Company was losing
approximately £250k a day in mails trading due to RMG industrial action, and this was
anticipated to be significantly higher as December progressed and RMG industrial action
continued. There was anxiety about the FCA deposit limit issue. With the slow-down in
the mails trade a shortfall in our funding over the next few years was forecast. The
Inquiry, extending now potentially into 2024, was going to cost the Company more,
however we wished to support the Inquiry to the best of our ability. One of the
implications of the Inquiry was in relation to the roll out of NBIT; the technology needed to
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work first time, the roll out exercise was vast, and the exercise was massively time bound.
This compression of activity within a very short time frame would have many impacts.
BT noted that parts of the business were positive, however the Company had significant
issues to face including the Inquiry and wider external factors. An issue of some urgency
for the Board was determining the optimal size and shape of the network, which needed
to be co-ordinated with BEIS and the Minister.
The Minister replied that as a constituency MP he was well aware of how important Post
Office was to the community, particularly with other services being withdrawn such as
banking, The Minister advised that he wished to understand the social value of the Post
Office further, and that he was keen to work on the next 3YP to facilitate the network size
and preserve the Company's commercial value. The Minister referenced the Energy Bill
Relief Scheme and advised that he was hopeful that this would extend to the Post Office.
The Minister advised that he appreciated the support given by Post Office in relation to
resolving historical issues and in relation to the Inquiry.
SI detailed some of the headwinds for Postmasters including an anticipated increase in
minimum wage, rising energy prices, RMG industrial action, and the FCA imposition of
banking limits. Postmasters did not feel that there was any government assistance that
was specifically for Postmasters; could Postmasters be permanently classified as
vulnerable business status? The pandemic had demonstrated how important Post Offices
were in the community. Many Postmasters were hanging on for peak December trading,
however some may not be able to continue into the new year. The Minister replied that
these were going to be difficult times, however he was hopeful Post office would see some
benefit from an extension of the Energy Bill Support Scheme. In terms of limits on deposit
payments, the Minister had written to HM Treasury suggesting that there should be a risk-
based approach applied not a blanket approach. The Minister advised that he would be
agreeable to receiving suggestions on how the work the government provided to Post
Offices could be better.
LH referenced the strategic direction of the Company and that the Board was interested to
understand early ideas on the BEIS policy review. The Minister replied that he was keen to
work with Post Office on this and invited the Board to come to the Minister with
recommendations. AC advised that there would be difficult and unpopular decisions to be
made in the near future, such as closing rural branches that were loss making that sat
outside the access criteria. ZP contributed that the Board needed to keep sight of the fact
that the mails business was in structural decline and that in 5 to 10 years-time Post Office
needed to be a different business which delivered a good income for Postmasters, as well
as being commercially sustainable. BT advised that the Board would value the support and
advice of the Minister; the Minister replied that he would be pleased to work with the Post
Office to achieve what was necessary.
Minister Hollinrake MP, C Creswell and assistant left the meeting at 14:07.
BT called for questions on the CEO Report. ZP referenced the Employee Survey results and
queried whether these could these be shared. NR spoke to the results, advising that he
was due to work through these with J Davies, and that he was acutely aware that he would
need to attend the Inquiry in September 2023 and advise of cultural changes at the
Company.
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EJ referenced point 36 in relation to SSKs and queried what the approach was between
now and the roll out of NBIT. EJ noted the value that could be extracted if customers
could self-serve for returns using NBIT. NR replied that there was no further funding for
SSKs, however we were exploring options for a prototype and funding via our partnership
with WH Smith plc (‘WHS’). EJ pointed out the risks associated with not progressing with
the development of SSKs. LH queried, when negotiating with WHS, whether we had
settled if any solution would be proprietary to them? NR replied that it could not be,
however this part of the ongoing discussions with WHS.
TC noted the Metropolitan police investigation and queried whether this involved any
current Fujitsu employees. BT suggested that TC ask BF.
Finance
Financial Performance Report
TABLED and NOTED was a report, ‘P7 — Performance Overview’.
NB joined the meeting at 14:28.
AC spoke to the Report noting the financial impacts of the RMG strikes, and the analytical
work and practical steps proposed in relation to reviewing Postmaster losses.
LH noted that she had met with Z Partos earlier in the week, and that there was a need for
the business to become more analytical and that this capability needed to be built
internally. AC agreed with this, however advised that there was no funding available to
develop this. TC referenced previous practices that had been undertaken by the Company
in relation to reviewing Postmaster losses and queried why these were no longer
undertaken. AC advised that there had been significant staff turnover in the relevant
teams in Chesterfield. In addition, the pandemic had caused the business to pause
different practical activities, however these had never been re-commenced, and remote
working was not conducive to the collaboration required for these activities. NR
contributed that recruiting to Chesterfield had been difficult however the Retail
Operations Director was now in situ and would be assisting.
AC advised that the current forecast was that branch numbers would be below 11,500 if
Drop and Go’s were not included. TC noted that this was anticipated by BEIS.
In relation to Postmaster remuneration, the expectation of this increasing was
deteriorating due to Mails trading. NR noted that the Postmaster variable remuneration
rate was down for the first time this period, and this could be flat by the end of the year.
In terms of any trading profit, the Board would need to think carefully about how this was
distributed. TC shared his view that there was a significant issue here; with minimum
wage increases set for April 2023 and the impact on Postmasters, yet the Company would
be in discussion with BEIS at this time; increasing Postmaster remuneration at the same
time as requesting funding would be a difficult position to maintain, however. AC replied
that we were very clear at the Postmaster Business Update that a review of Postmaster
remuneration would be undertaken again in Q4, and that any additional remuneration was
likely to be in the form of a one-off payment; we were very conscious of BEIS’ reaction. EJ
shared his view as to the need for the Company to act promptly in relation to Postmaster
remuneration in order to preserve branch numbers. BT observed that there were 2 parts
to this issue, firstly, what was the correct quantum of any increase and secondly how any
increase would be communicated to the shareholder.
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ACTION SI queried the position on the value of non-barcoded stamps in the network. AC
advised that he would issue SI a note on this. ac
BG referenced our relationship with RMG and thought that coming out of the Industrial
Action RMG would be desperate to re-build their volume; this could present an
opportunity for us, in helping RMG rebuild their business. NR took the point, however
advised that the Post Office was the most expensive channel for RMG.
Three Year Strategic Plan
TM joined the meeting at 14:57.
TABLED and NOTED was a report, ‘Three Year Strategic Plan/ 3YP Update’.
AC spoke to the paper advising that the approach to Phase 3 of HJ, Copper Stop Sell, the
NBIT roll out plan, and HMU and Inquiry spend, which comprised major building blocks for
the 3YP, would be brought for consideration at the January Board. In terms of applying for
additional funding, this could be sought in a less traditional way, given the usual process
could take a significant amount of time, we may not receive the totality of the funding
needed, and there could be conditions imposed. Given the funding requirements for any
of the above items could get materially worse we would need to propose ranges, and the
approach could be speaking to BEIS about funding in tranches and repurposing unapplied
funding allocated for historical compensation schemes.
ZP emphasised the need for the draft 3YP to be credible and for the Board to have
confidence it was executable. ZP shared her view as to the 2 major areas of risk, being
firstly the Inquiry, and queried the must do activities of the Inquiry for example disclosure,
and raised opportunities for savings in relation to engaging cheaper external legal
resource. The second major area of risk as ZP saw it was in relation to NBIT where a well
costed plan was crucial; the Board needed more oversight and to be sure that any funding
ask was as robust as possible. TC advised that he was concerned about the timing for
seeking additional funding; whilst we were in discussion with BEIS we could cross critical
points of no return, and decisions could be required without clarity as to the funding
available. TC further advised that an option could be to apply for emergency funding for
NBIT and the Inquiry now to support activities for a 12-month period, and to raise the
position on Postmaster remuneration. TC shared his view that he thought parts of BEIS
could be receptive to this approach at this point in time. AC advised that in practice there
would be activities we would not scale back on if it meant we were approaching security
headroom such as the Inquiry and NBIT.
NBIT Training Deepdive
AMH, ZM, GC and MR joined the meeting at 15:35.
TABLED and NOTED was a report, ‘Training for NBIT full-counter roll-out’.
EJ noted that the vast majority of the group of Postmasters that would require NBIT
training were not otherwise skilled in IT and queried whether Postmasters could be
involved in delivering the training as well, given their incisive practical knowledge. AMH.
replied that for the virtual training there was the intention to use Postmasters to assist to
deliver the learning, and that the approach was very much designing and implementing
the training for NBIT in collaboration with Postmasters.
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EJ advised that he had attended the Aldwych Post Office last week, and the feedback from
the Postmaster there and staff was that the learnings had come when they were able to
access the screen in the NBIT environment. GC replied that there would be an option for
Postmasters to go into a simulated NBIT environment, and that the approach was not
going to be training every single transactional journey; the feedback received was that
once teams saw one transactional journey completed, they were comfortable.
NR advised that risk assessments were being undertaken via the area managers to assess
which Postmasters would likely need more assistance than other. LH stressed that we
could not underestimate the importance of Postmaster competency in relation to NBIT,
and that she was supportive of pausing the go live to NBIT for Postmasters who had not
demonstrated competency. LH noted that costings for the NBIT training programme
would need to come back to the Board. LH noted the current training in place for new
Postmasters in respect of Horizon, however commented that the sooner we could move
training across for new Postmaster to NBIT the better. LH queried whether we had a date
in mind for commencing training for new Postmasters solely on NBIT. AMH replied from
April 2024.
BT referenced the action to be addressed in relation to NBIT training costs; this was not
just the cost base, it was also information as to the difference in costs as against the NBIT
training originally proposed. ZM advised that this information would be provided to the
Board for the January meeting.
Sl raised utilising the NFSP to assist in delivering the training and shared his view that
providing access to simulated training for Postmasters as soon as possible would be
valuable. SI queried the use of Area Managers to assess training needs. NR took the point,
however advised that the purpose of this was to have a preliminary assessment as to what
might be required.
SI emphasized the need to implement the training correctly the first time. AMH advised
that a learning management system would be opened to all, and that Postmasters would
be able to see how many of their team had undertaken the training ahead of the NBIT go
live date for that branch. GC contributed that the feedback the team were getting was
that the front office side of the journey was pretty intuitive, however some of the back-
office processes were more difficult and represented more of a change so the training was
aimed more at this aspect. EJ raised the issue of Postmasters who solely ran rural
branches and who may not have a separate device for undertaking the training. GC replied
that the training could be undertaken piecemeal and that the team were looking at
additional device options. TC noted that a timetable for training implementation would
have been a useful addition to the paper. TC queried how the team were collating
feedback from Postmasters in relation of the proposed training. AMH advised the Aldwych
branch training had consisted of providing training for every journey; the feedback was
that the Postmaster and staff did not need training for every journey, so the team had
reduced the number of journeys trained, which should position the team to moderate the
level of training required. ACTION As to TC’s comment in relation to a timetable for the
training implementation, the team had this and this information could be shared. mM
AMH, GC, and ZM left the meeting at 16:02. LH left the meeting at 16:03.
Overall Network Strategy
ME joined the meeting at 16:05.
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TABLED and NOTED was a report, ‘Accelerating the network strategy’.
Confidential: discussion of legally privileged advice
ME spoke to the first proposal in the paper, being to close a number of loss-making
branches by March 2025, offsetting these with additional Drop & Collects. ME noted that
if the proposal progressed it could receive a negative response from communities, and
that additionally, no compensation would be offered to Postmasters. ZP queried this,
noting that for HSS and OHC claims 26 months compensation was being provided. TC
queried whether we would be bound by precedent applied in respect of other matters in
the Company. ME outlined the legal advice received in relation to compensation and the
public law point. ZP queried whether this proposal had been discussed with BEIS. AC
advised that management would initiate a dialogue with the shareholder on this following
the Board meeting. ACTION TC requested that a copy of the legal advice be distributed to
the Board and shared his view that the shareholder may not be supportive of the
approach.
ME
EJ advised that in relation to white space Evri had a distance of 0.5 miles; the revised
proposed 0.25 miles distance for Post Offices equated to an approximate 3-minute walk
and EJ was very concerned that this could be detrimental to the business of existing Post
Offices. ME advised that the half mile distance between Post Offices was an informal
policy we worked to, and that there was a difference between what Evri said on their
website and what happened in practice — in practice it was a quarter of a mile. BT called
on SI to contribute. SI advised that he agreed with EJ and reminded AC that in an earlier
Board meeting when AC had asked Board members to call out red lines, SI had identified
any change to the current white space of half a mile as a red line. AC queried that if we
agreed with Postmasters that the savings from closing loss making branches and installing
Drop and Collects in white space would be reinvested in Postmaster remuneration, would
that assist, or what could be done to make this proposal workable for Postmasters. SI
shared his view that any proposal to reduce down the half mile radius would be very noisy.
EJ contributed that the solution to closing loss making branches was not a palatable one,
so if we cut the radius, then we would need to look at providing a guaranteed minimum
level of remuneration for Postmasters.
AC queried, when we undertook the modelling, if we did not reduce the half mile radius,
how many rural branches could we closed. ME replied that we would be unlikely to close
more than S00 loss making branches by 2025; we were using Drop and Collects for churn
in the network so we would likely have very little room to otherwise close loss-making
branches. BT queried whether the team were confident we could roll out more than 1,500
Drop and Collects by 2025. ME advised that the team estimated capacity to deliver
approximately 3,000 Drop and Collects, contingent however on other deals being
completed. EJ commented that the problem was that the business was being run by
completely the wrong metric of the 11,500 branches.
BT summarised the discussion, advising that the Board was supportive of closing loss
making branches so long as the access criteria was not affected, and the half mile radius
was not breached. BT further advised that the door to closing further loss-making
branches was not closed, however management would need to bring proposals in relation
to remuneration assurance for Postmasters. NR referenced the McColl’s loss-making
branches that were due to be closed early in the New Year and which would not be
replaced; these would provide a test bed and assist to understand where political tension
might lie.
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ME moved to introduce the second proposal in the paper, being, subject to funding, the
resumption of the programme to franchise and close the 114 remaining DMBs. BT raised a
comment provided by CS ahead of the meeting, pointing out that it could be difficult to
secure external funding for this activity. TC advised that he was supportive, however
advised that external funding should not be sought for this activity.
ME turned to speak to the third proposal in the paper being bringing the Hard to Place
scheme to a conclusion, by offering Postmasters the option to exit on the basis of 12
months compensation. ME advised that Postmasters in the scheme were currently
entitled to 26 months compensation if they exited. ACTION TC queried the legal position
in relation to the proposal to offer reduced compensation of 12 months and requested a ME
copy of the legal advice be circulated to the Board. BT shared his view that an alternative
offer of 12 months compensation could be provided to Postmasters, and that this would
act as a variation to the original offer. ME advised that the legal advice had stated tI
TC advised that the shareholder may have qualms about this
proposed approach.
ACTION BT summarised the discussion on branch closures, DMBs, and in relation to Hard
to Place, requesting that the legal advice obtained be circulated to the Board, and that the
matters come back to the Board in January. ME replied that leaving these matters to the
January Board would be too late, given that we would need to correspond with
Postmasters ahead of this. BT noted this and advised if that was the case then Board could
consider these matters by way of written resolution.
ME
Historical Matters
Detriment 2 Approach and outstanding balance payments
TABLED and NOTED were the following papers:
(i) Postmaster Detriment 2 — Approach and Decision on Outstanding balance
payments/ Unreconciled Losses (Pot B); and
{ii) Funding and Communications for Unreconciled Losses (Pot B).
Confidential: discussion of legally privileged advice
BT outlined the papers and advised that a phased funding and delivery approach to
Detriment 2 had been agreed by the HRC. SR spoke to the papers, advising that the Board
was similarly being requested to approve this approach to Detriment 2. SR detailed the
proposed process for seeking funding in tranches for a few products at a time, with a
phased disclosure exercise to follow for the correlating products, and current and previous
Postmasters being notified. After the 14 products were worked through there would be
another decision point — whether we needed to ask Postmasters if they were aware of any
other products that could have detriment associated with them. The legal advice received
I. SR advised that the team were looking at 5
additional products presently that might be added to the Detriment 2 list and that
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additional items for Detriment 2 may be deferred directly from the Inquiry to us, BT called
for questions. ZP noted that the HRC had expressed discomfort about notifying
Postmasters if funding was not in place. SR replied that notifications would not be issued
until we had the funding for the corresponding product.
The Board RESOLVED that the phased funding and delivery approach to Detriment 2 be
and is hereby APPROVED.
Confidential: discussion of legally privileged advice
In respect of outstanding balance payments, BT advised that this issue had been
considered many times at the HRC. The quandary was that if we notified Postmasters and
requested, they pause payments, were we inadvertently stimulating claims against an
unfunded position. NR queried whether there had been any communications with the
current 77 Postmasters who were repaying. SR replied that there had not been. SR noted
that 13 of the 20 cases in this category that had been investigated had shown that the re-
payments were in order. AC noted that we had not investigated the balance of the other
cases:
JAC
advised that he was not persuaded by the argument against pausing repayments and his
view was that we needed to notify and speak to the Postmasters in question and
investigate fully. NR agreed with AC’s position. BT advised that there had never been a
mechanism proposed that would allow the matter to be handled in a controlled way. AC
queried whether there was an execution problem. SR replied that attempts had been
made to initiate an individual by individual approach, but this had stalled,
ZP requested
that the correspondence refer to reviewing accounting, rather than investigating.
SR queried whether the Board were comfortable about the potential crystallisation of
liability. TC acknowledged this; any Postmaster who had ever made a payment to the
Company could potentially make a claim. ZP queried whether this was not covered by
HSS? TC replied that this was not clear. BT contributed that we could not use the measure
of the payment as an indication of detriment — we needed to find the detriment. AC
agreed that the potential liability point was a concern, however felt that this was not
comparable as against the risk of continuing with the breach situation. ACTION TC
requested that management distil out all the Postmasters who had made payments since
the Cl, and ZP asked that management determine how many current Postmasters had
finished payment plans.
SR
It was RESOLVED Management be directed to contact the 64 Postmasters currently
repaying for whom investigations had not yet taken place, to advise them to pause
payments whilst an investigation into the reason for the payments is carried out.
BT referenced the number of remaining issues on outstanding payments and queried
whether the Board felt that the work being undertaken on Detriment 2 would be sufficient
to resolve questions on outstanding balance payments. AC advised that these issues
would need to be considered by Management.
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Sl left the meeting at 17:30.
OHC Model
TABLED and NOTED was a report, ‘Overturned Historical Convictions’.
It was RESOLVED that the HMBU adopt a remediation approach for the processing and
settling of Overturned Historical Conviction Claims, with HSF initially continuing to deliver
Non-Pecuniary Claims, and the Company developing the in-house capability to deliver
Pecuniary claims from approximately March 2023 be and is hereby APPROVED.
HMU Update and Funding Requests
TABLED and NOTED were the following papers:
(iii) ‘Historical Matters Programme Update’;
{iv) “HMBU Finance Update’;
(v) ‘HSS Post-Offer Funding December 2022 and January 2023’;
(vi) ‘HSS Pre-Offer Funding December 2022 and January 2023’;
(vii) ‘Historical Matters HMU Funding Request Overturned Historic Convictions
(OHC)’; and
(viii) ‘Historical Matters HMU Funding Request Disclosure Governance & Appeals
(DGA/CCRC)’.
It was RESOLVED:
(i) Funding for HSS Post Offer delivery costs in the amount of £678,000 for the
period December 2022 and January 2023 be and are hereby APPROVED;
(ii) Funding for HSS Pre-Offer delivery costs in the amount of £3.183m for the
period December 2022 and January 2023 be and are hereby APPROVED;
(iii) Funding for OHC claim settlement activities in the amount of £2.310m for the
period November and December 2022, and January 2023 be and are hereby
APPROVED;
(iv) Authority be delegated to NR and AC to release funding for OHC claim
settlement activities up to a maximum of £1.54m for the period February and
March 2023 be and is hereby APPROVED;
(v) Funding for DGA (CCRC) delivery costs in the amount of £1.589m for the
period December 2022 until 24 January 2023 be and are hereby APPROVED.
ZP queried the periodicity of these requests, noting that they were very frequent. ACTION
AC agreed with this and suggested that a 12-month budget for HMU spend be brought
back to the Board in January. ZP advised that she was agreeable to this course of action
and requested that the periodic Financial Performance Report note drawdowns as against
the approved budget.
ACTION TC raised the deadline on applications to the HSS and whether additional funding
would be sought for the period beyond March 2023; a decision on this would be required
to be taken soon. SR replied that he thought we would need to request additional funding
in relation to dissolved cases. BT requested that this be taken away by the team and
returned for consideration by the Board.
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Public Inquiry Update
TABLED and NOTED were the following papers:
(i) ‘Post Office Horizon IT Inquiry: Update’; and
(ii) ‘Briefing Note on the Inquiry’s confidentiality undertakings’.
AC advised that the Inquiry budget would be brought for consideration at the January
Board meeting. In the meantime, management were requesting that the Board delegate
authority to NR and AC to approve funding for Inquiry activities for the period November,
December and January. BT queried the anticipated funding required to cover activities
during this period. AC advised a maximum of £9m.
It was RESOLVED that the Board delegate authority to NR and AC to approve funding for
Inquiry activities for November, December and January, up to a maximum spend of £9m.
BF outlined staff changes to the Inquiry team, to enable execution. BF reminded the Board
of the Inquiry Compensation hearing scheduled for 8 December.
BF and SR left the meeting at 17:38.
Approval Requests
Head Office Premises
TABLED and NOTED was a paper, ‘Columbus (new Head Office workspace)’.
Following discussion, it was RESOLVED:
(i) Entry into an Agreement for Lease with Pontegadea UK Limited in respect of
premises at level 3, 100 Wood Street, London, for a 10-year lease term
commencing 1 February 2022, with a 5-year break provision, with a maximum
spend of £18, 227, 471 over the 10-year term be and is hereby APPROVED;
(ii) To delegate authority to the Group Chief Retail Officer to finalise the terms of
the Agreement for Lease and any ancillary documents, in accordance with the
parameters set out in the paper; and
(ii) To authorise any two Directors or a Director and the Company Secretary to
execute the Agreement for Lease and any ancillary documents.
Approval Requests with no Presentation
Network Performance Report
TABLED and NOTED were the following papers:
(i) ‘Post Office Network Report 2022 & PWC Assurance Audit — Cover Paper’;
(ii) ‘Network Report 2022’; and
(ii) ‘PWC Branch Network Audit Progress Report’.
RS advised that the shareholder had requested an amendment to the draft Report, with
additional information in relation to accessibility to be inserted. ACTION RS would send
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around the additional pages to the Board for comment. RS circulated the additional
information proposed to be inserted on 8 December with no objections raised.
It was RESOLVED that the Network Performance Report be and is hereby APPROVED and
that the Network Performance Report be sent for laying in Parliament on 15 December
2022 with published subsequently.
Noting Papers with Presentation
Health & Safety Report
MH joined the meeting at 17:40.
TABLED and NOTED was a paper, ‘Health & Safety Monthly Report’. MH spoke to the
Report. EJ raised Health and Safety issues in branch in relation to additional mails volumes
due to RMG industrial action and queried the advice being provided to Postmasters in
relation to this. MH advised that conversation with RMG on this were ongoing. NR
advised that the team would continue to review this. MH left the meeting at 17:47.
Noting Papers with no Presentation
Common Issues Judgement Dashboards
TABLED and NOTED were the following papers:
{i) “Common Issues Judgment Dashboard P7 Cover Paper’; and
(ii) ‘Common Issues Judgment Dashboard P7’.
Payzone Integration — Exploratory Work
TABLED and NOTED was a paper, ‘Payzone Integration Exploration’.
Corporate Social Responsibility Strategy
TABLED and NOTED were the following papers:
(i) ‘Corporate Social Responsibility Strategy - Cover Note; and
(ii) ‘Corporate Social Responsibility Strategy’.
Noting and Governance Items
Committee Memberships
TABLED and NOTED was a paper, ‘Appointments to Board Committees’.
Noting the recommendation of the Nominations Committee, and that the Chair did not
vote, the Board RESOLVED that:
(i) The Chair be appointed as a member and Chair of the Nominations
Committee; and
(ii) The Chair be appointed as a member of the Remuneration Committee;
with appointments commencing 1 December 2022.
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Remuneration Committee Terms of Reference
TABLED and NOTED was a paper, ‘Committee Terms of Reference Review’. The paper was
withdrawn.
NED Aggregate Fee Cap
TABLED and NOTED was a paper, ‘NED Fees Cap Increase’. LH spoke to the paper, advising
that the aggregate NED fee cap as set out in the Company's Articles of Association needed
to be increased following the shareholder's decision on the Chair’s remuneration. It was
felt that now was not the right time to increase NED fees overall, however if the level of
NED fees turned out to be an issue when finalising recruitment of the new ARC Chair,
there would be some funds remaining from the proposed increase to apply to this. RS
advised that the Special Resolution and amendment to the Company's Articles of
Association would need to be filed at Companies House.
It was RESOLVED:
(i) An increase in the aggregate cap on NED fees as set out in Article 50 of the
Articles of Association of the Company from £400,000 to £470,000 be and is
hereby APPROVED; and
(ii) A special resolution in the form tabled be and is hereby APPROVED with the
Company Secretary authorised to circulate the special resolution to the
shareholder to request consent of the shareholder to request amendment to
Article 50 of the Articles.
Sealings Report
The Board APPROVED the affixing of the Common Seal of the Company to the documents
set out against items numbered 2140 — 2143 inclusive and 2162 in the Seals Register.
Future Meeting Dates
The future meeting dates were NOTED.
Forward Agenda
The Forward Agenda was NOTED.
Any Other Business
There being no further business the Chairman declared the meeting closed at 17:49.
Date of next scheduled meeting
Board Meeting 24 January 2023 10:00 — 15:00.
Chairman Date
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