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POST OFFICE LIMITED BOARD MEETING
Strictly Confidential
MINUTES OF A STRATEGY SESSION OF THE BOARD OF DIRECTORS OF POST OFFICE LIMITED HELD ON MONDAY
8 JULY 2024 AT 100 WOOD STREET, LONDON, EC2V 7ER AT 14:30 PM
Present: Nigel Railton Interim Chairman (NR)
Ben Tidswell Senior Independent Director (BT)
Lorna Gratton Non-Executive Director (LG)
Saf Ismail Non-Executive Director (SI) (Via Teams)
Elliot Jacobs Non-Executive Director (EJ)
Brian Gaunt Non-Executive Director (BG)
Simon Jeffreys Non-Executive Director (SJ)
Amanda Burton Non-Executive Director (AB)
Andrew Darfoor Non-Executive Director (AD)
Nick Read Group Chief Executive Officer (NR)
In attendance: Rachel Scarrabelotti Group Company Secretary (RS)
Owen Woodley Deputy CEO (Observer) (OW)
John Dillon Interim General Counsel — Inquiry (Observer) (JD)
Neil Brocklehurst Interim Chief Operating Officer (Observer) (NB)
Preetha McCann Interim Chief Financial Officer (Observer) (PM)
Shaun Kerrison Head of Postmaster Engagement (SK)
Pete Marsh Retail Operations Director (PM)
Mark Eldridge Postmaster Experience Director (ME)
Karen McEwan Group Chief People Officer (KM)
Tim Perkins People Director - Services (TP)
Diane Wills Public Inquiry Director (DW)
Dan O’Mahoney Inquiry Operations & Strategy Director (DO)
Chris Jackson Burges Salmon (CJ)
Sarah Bell Grant Thornton (SB)
Apologies: None
Action
11 Welcome and Conflicts of Interest
A quorum being present, the Chair opened the meeting. The Chair called for the Directors
to disclose any conflicts of interest. The 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.
The Board acknowledged the attendance of OW, JD, NB, PM, DW, DO and CJ as observers at
the meeting. As observers, the Board was aware that all contributions made by OW, JD, NB,
PM, DW, DM and CJ to the meeting were observations only, and did not constitute advice,
recommendations, directions or instructions. The Board confirmed that it would take due
care not to be unduly influenced solely by a contribution made by OW, JD, NB, PM, DW, DO
and CJ and that it would reach its conclusions based on a balanced and diligent assessment
of all the facts available to it.
1.2 Inquiry Confidentiality Undertakings
The Board noted that PM and ME did not have confidentiality undertakings accepted by
the Inquiry in place, and that these individuals would need to be excused from the meeting
should the need to discuss information confidential to the Inquiry arise.
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Postmaster and Colleague 23/24 Engagement Survey Results Deep Dive/ Culture
Dashboard
PM, ME, KM and TP joined the meeting at 14:40 and SK at 14:50. Key discussion points in
respect of the Postmaster 23/24 Engagement survey results were as follows:
ACTION AD queried whether the survey response was representational
geographically of Postmasters. The team undertook to produce a heat map of
survey responses;
Further advocates to increase Postmaster participation rates in the survey were
discussed and the engagement with the Voice of the Postmaster group was noted;
The Chair shared his reflections on the survey results noting the overall decrease
in Postmaster sentiment and advised that following his attendance at the recent
Postmaster conference in London he felt that the initiatives being undertaken by
the business were not going to change sentiment and that transformational
change was required. PM noted that there were multiple initiatives in train and
pockets of engagements, however agreed that the measures were not significant
enough and a better overall strategy was needed in order to lead to improved
remuneration for Postmasters;
SK outlined activities that had been undertaken over the last 12 months including
the pivoting of the field team to be more focused on Postmaster wellbeing, the
holding of listening sessions, the establishment of new working groups and
consideration being given as to how Postmasters could be more involved in
decision making. Consequently the number of Postmasters who had actively
engaged with the business had increased significantly in the last 12 months;
The Chair shared his view that there were one or two things that could shift
sentiment and that one of these was improved Postmaster remuneration. SI
agreed with this; if remuneration was improved initially then Postmasters were
likely to be more flexible on addressing other points of concern;
PM spoke to the 3 key concerns that had come through from the FY23/24 survey
being remuneration, leadership and culture;
ME shared his view on process changes the business could make to show more
respect to Postmasters in relation to remuneration, for example, by providing
Postmasters with details on the annual remuneration rate increases ahead of
dates for minimum pay increase announcements;
ACTION LG queried whether Postmasters with branches that offered broader
product sets expressed higher levels of positive sentiment in the survey. ME
advised that there could be a correlation. OW noted that it would be useful to see
what circumstances more positive Postmasters had such as product set and
location. The team undertook to look at this. BT noted that potentially there
could be a significant number of Postmasters whose product set did not increase,
so the divide between those Postmasters with positive sentiment and those with
negative sentiment could increase;
NB noted that since joining the business he hadn’t seen any surveys that went past
the Postmaster to the customer; ultimately happy customers would drive more
Postmaster remuneration so how did we make the step behind the Postmaster
work;
EJ referenced the bi-annual pulse survey due for October 2024 and queried what a
realistic participation rate to aim for might be. NB shared his view that one thing
that we could do in the meantime was focus on disengagement rather than
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POST OFFICE LIMITED BOARD MEETING
Strictly Confidential
engagement, and improving the sentiment of Postmasters who expressed the
lowest levels of engagement;
PM outlined the businesses’ key strategic partners and the improved survey
results for this group, noting that the survey results were compiled from a
different set of questions than those asked of Postmasters. The strategic partner
survey results showed good feedback on how we compared with other partners.
Questions followed as to whether remuneration was a concern of this group, the
motivations for strategic partners having a Post Offices, and the individuals at the
strategic partner level who completed the survey;
SI noted that the survey results for strategic partners indicated that they felt well
informed and queried what the business was doing to make them feel this way.
PM replied that the strategic partnership team acting like product representatives
much more.
Key discussion points in respect of the Employee 23/24 Engagement survey results were as
follows:
TP noted that the employee engagement survey had been conducted in February/
March and that the participation rate had been 86% so there was confidence that
the results were representative of employee sentiment. Engagement levels had
declined along with the pride colleagues felt in working for Post Office although
colleagues motivation to do their best job for the business remained high.
Additionally 58% of colleagues wanted to stay with the business for the next 5
years which was a high percentage by market standards. NB queried however
whether there was a correlation between the people who took no pride in working
for the business however would stay regardless. TP advised that in the SLP the
percentage of colleagues wishing to stay was more like 25%. OW noted that
reward issues in most organisations would be the top reason to leave, however at
the Post Office top motivating factors of leaving were culture and lack of intent;
TP advised that internal communication was the number 1 thing that colleagues
wished to see improved, the other was the level of openness and honesty. In most
other businesses key concerns were in respect of reward or progression. The Chair
agreed and shared his perspective that the issue might be the things that we were
unable to communicate on for example strategy and the future given that the
Company did not have a definitive strategy;
TP noted the low level of colleague sentiment in respect of senior leaders and
outlined the 2 aspects of that. Areas where colleagues had seen improvement
were discussed with line managers overall having improved on 6 out of 7
measures. Importantly there had been an improvement in colleagues being held
to account. The People team were not confident in line manager capabilities
however within the business; although colleagues were generally happy with their
line manager they did not then have confidence in senior management;
EJ queried whether was there was a difference in survey results between those
working in Directly Managed Branches (‘DMBs’) as opposed to head office. TP
replied that the front line was happier including those who worked in DMBs and in
supply chain;
TP spoke to the survey findings in relation to diversity and equality at Post Office
and noted the lack of diversity reflected in the membership of the Executive and
Board;
TP outlined the revised approach to action planning, essentially making action
plans suitably tailored for different areas and having the Leadership Team drive
these. The action plans would then be aligned to the People plan themes and
actions tracked centrally. It was critical to deliver great communication out of the
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Strategic Review in respect of the future of the organisation and also on the
culture point and significant improvements to the survey results for 24/25 were
being aimed for. ACTION TP committed to undertake some benchmarking of the
FY23/24 employee survey results as against employee survey results for other
purpose led organisations. AD queried the consequences if the revised employee
survey targets were not met and queried who was accountable and whether there
was a link through to reward. NR replied that it was the CEO who was accountable
and AB advised that improvement in the employee survey results was linked with
reward;
BT raised the issue of the percentage of senior women who had received an
unwanted comment. A zero tolerance approach needed to be established — BT
queried where was this reflected. TP advised that this was included in the action
plan for senior women;
TP moved to speak to the Culture Dashboard and outlined the way the indicators
had been devised. The Culture Dashboard was due to be provided to the Board
twice a year and presented to the Executive every 2 months. The results of
Postmaster and Employee pulse and full surveys would be presented at the same
time along with any work completed by Group Assurance on culture. Of the 27
indicators, TP advised that different weightings might be applied. Discussion
followed as to how the indicators would align with strategy and the need for
benchmarking of the indicators.
PM, ME, KM and TP left the meeting at 16:20.
Grant Thornton Governance Review Recommendation Planning
SB joined the meeting at 16:24. The Chair asked BT to lead the session . BT suggested that
the Board work through the priority actions as set out in the draft Action Tracker.
Comments were as follows:
Item 1 —The Board reflected that this item was largely driven by the outcomes of
the Strategic Review. SB queried, in the intervening time, how the Board wished
to treat the Chair’s objectives letter and whether this still included the provision of
11,500 branches. LG advised that the Chair’s objectives letter remained in draft
however still included the requirement for 11,500 branches and the Chair noted
that the optimum network branch provision would be advised via the strategic
review. DW suggested that the action set against the second part of the
recommendation be amended to make it clear that the Board were being
informed by themes arising incrementally from the Inquiry;
Item 2 - LG noted that the draft revised Shareholder Relationship Framework
Document had been provided to RS and C Spelzini and requested that any
concerns in respect of clarity be called out to UKGI and DBT. LG advised further
that the draft Shareholder Relationship Framework Document was accompanied
by a draft Delegation Letter, the purpose of which was to make clear any
delegations of authority between the Shareholder and the Company. BT queried
who would be assisting with the exercise. RS advised her expectation that she
would be closely involved in this with C Spelzini and that external legal support
may be sought. The Chair requested that the revised Framework Document be
tested against the outputs of the Strategic Review. LG took the point however
advised that UKGI wished for the revised Framework Document and Delegation
Letter to be settled by the end of the summer;
Item 3 — AB queried whether the actions in this section should look at Director
Inductions particularly for the Postmaster Directors and suggested that this be
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NB: Actions in
this section
have been
incorporated
into the
Actions
Tracker rather
than the
Matters
Arising
Schedule
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POST OFFICE LIMITED BOARD MEETING
Strictly Confidential
picked up with SI and EJ. EJ shared his reflections that the Director Induction
programme had not been tailored sufficiently for Postmasters NEDs and that
specific training was needed in respect of conflicts and corporate governance
generally. BT noted that the recommendations and actions in Item 3 would be the
responsibility of the Nominations Committee so suggested that meeting times may
need to be extended in order to ensure sufficient Nominations Committee
oversight of these matters;
@ Item 4-— the recommendations and status were discussed;
Item 1(a) — it was felt that this was duplicative of the earlier actions. It was
requested that the next draft of the Actions Tracker reference back specifically to
the actions above and that the items the Remuneration Committee were tracking
be added to the tracker.
Generally the Board requested that columns be added to the Action Tracker for
timeframes and assigning action owners, colour coding be applied to show which items
could proceed in the interim and which were part of the Strategic Review, that the Action
Tracker for operational matters be mapped to the Board Action Tracker and that reporting
on the Tracker be provided on a monthly basis. The Chair invited all Board members to
feedback any further comments on the draft table to RS.
Any Other Business
There being no other business the Chair declared the meeting closed at 17:00.
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