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Agenda
Post Office Board Agenda (Strategy Day 1)
Finsbury Dials, 20 Finsbury
Street, London EC2Y 9AQ
‘Tim Parker (Chairman) Ken McCall (SID) * Veronica Branton * Dan Zinner (Group Chief Operating
(Company Secretary) Officer)
** Nick Read (CEO) © Carla Stent (NED) ‘© Tim Mcinnes (Strategy and ‘* Amanda Jones (Retail and Franchise
Transformation Director) Network Director) (Item 3.)
* Zarin Patel (NED) ‘* Alisdair Cameron (CFO) I © Tracy Marshall (Postmaster
Effectiveness Director) (Item 3.)
‘* Tom Cooper (NED) ‘© _lisa Harrington (NED)
* Saf Ismail (NED) * Elliot Jacobs (NED)
jen Tidswell (NED)
As as
1.] Welcome and Conflicts of Interest Noting Chairman 15:00 — 15:05 hrs
2.I Introduction to the Strategy Sessions Noting Nick Read /Dan I 15:05 - 15:45 hrs
Zinner / Tim
Mcinnes
3.I Session 1 — Postmasters: Engaging with independent I Discussion ‘Amanda Jones / I 15:45 — 17:00 hrs
postmasters and strategic partners to build stronger Tracy Marshall
partnerships
4.I Any Other Business Noting Chairman 17:00 - 17:15 hrs
Evening Drinks 18:00 — 19:00 hrs
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POST OFFICE LIMITED
BOARD REPORT
Independent Postmaster and
Title: Strategic Partner Engagement Meeting Date: I 27" July 2021
Framework
Author:
Tracy Marshall, Postmaster
Effectiveness Director & Katie Sponsor: Amanda Jones, Retail and
Secretan, Strategic Partnerships P . Franchise Network Director
Director
Input Sought
Discussion on proposals for Independent Postmaster and Strategic Partner Engagement
structure.
Previous Governance Oversight
Pre-Board engagement sessions
Questions addressed
1. Why do we need an engagement framework?
2. What are we starting with first and why?
3. What are the risks and issues?
4. What are next steps?
5. How will we measure success?
Report
Why do we need an engagement framework?
6. Our strategic roadmap to 2025 places Independent Postmasters (PMs) and Strategic
Partners (SPs) at its heart, to create a sustainable and trusted franchise business. To do
this we need to build strong, trusting, transparent and rewarding relationships.
7. To build back trust we must change our behaviours as an organisation. We have started
the cultural shift to being more ‘PM centric’ but still have a way to go. We must involve
(listen not tell); be transparent (honest about what we can and cannot fix) and show
progress (‘you said, we did’).
8. So, a starting point to building trust is making a Postmaster Promise: ‘We’ll build a
partnership based on mutual support, trust and dialogue and work together to help your
Post Office thrive in your community."
9. We must ground what we do around this Promise and ensure we have mechanisms that
enable our PMs and SPs to tell us how we are doing.
10. To help us fulfil the Promise, our target end state is to have a coherent, effective
framework by the end of the calendar year, which clearly sets out how we deliver trust
building formal and informal engagement. We propose to stand up the formal engagement
structure first as this seems a natural progression from the PM NED appointments and
moves us closer to creating a modern franchise relationship.
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What are we starting with first and why?
11. Appointing the PM NEDs has been a meaningful step in bringing first-hand experience into
the Board room, to amplify the focus on what really matters to PMs and SPs. However,
we recognise they can’t possibly speak for the entire large and diverse network.
12. Area Managers are our ‘jewel in the crown’ but we recognise there is more we can do to
empower them to fix more issues ‘on the ground’ and help them to surface the big issues.
more quickly and transparently.
13. We heard from the Consultation feedback that 60% of PMs want to be more involved and
play a more active role in Post Office so there is clearly an appetite for increased
engagement. It’s a similar story for SPs, who want more information on our long-term
plans and more engagement at a strategic level.
14. The elephant in the room is the NFSP who are the official representative body for
postmasters. They are coming under increasing pressure, as their relevance and
effectiveness in representing PMs interests is being called into question. In the recent PM
Consultation, only 35% felt engaged with the NFSP.
15. Our proposal is to stand up a formal engagement structure, with a slightly different
approach for PMs and SPs, recognising the distinctly different needs of these groups. We
propose 9 Regional Forums for PMs for the purpose of raising tactical issues that can’t be
resolved at a local level. Engagement will be two way - PMs raising issues on behalf of
other PMs and then sharing outputs from forums for transparency. There will also be a
Senior Operator Forum for SPs, enabling us to share branch and operational activity
directly with them so that change can be driven from Head Office.
16. A selection of nominated members from across the 9 Regional PM Forums will sit on one
national forum. This will operate at a more strategic level to surface the big issues
regardless of branch type or location. For example, helping us to work out how to take
PMs on the ‘digitising mails journey’ or getting traction on network stability levers such as
automation. Similarly, there will be an Executive SP Forum for the purpose of providing
strategic insight and sharing priorities to create alignment with SPs to drive joint business
plans.
17. We would expect members of the GE and SLG to attend the National PM and Executive SP
Forums, the outputs of which will be shared with PMs and SPs to ensure transparency,
and with the GE and Board to give visibility of issues and action being taken. We would
like to discuss more about how we do this, on the 27%,
What are the risks and issues?
18. There is a risk, and high likelihood that this proposal will create conflict with the NFSP as
they are mandated to be the only body with which POL will ‘discuss and consult on matters’
affecting PMs, for example Remuneration. (an NFSP briefing note is in Appendix 1)
19. We believe the NFSP are perceiving threats on a number of levels:
a) Judge Fraser criticised the NFSPs ability to be independent as they are financially
dependent on being funded by POL under the Grant Fund Agreement (GFA)
b) CWU activity in bringing a Workers Rights Claim indicates an aspiration to represent
PMs
c) Increasing pressure from PMs questioning their relevance and effectiveness
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d) Increased engagement activities by POL such as the creation of a PM Director role
and the contents of this paper.
20. Recent conversations with the CEO of the NFSP have been difficult; he blames POL for
‘undermining the NFSP’. Our strategy so far has been to adopt a less confrontational
approach and try to help the NFSP accept the need for change. We have tacit support
from Richard Taylor and his Public Affairs team to raise this with BEIS to ensure they are
onboard. We need to decide what the relationship with the NFSP should be in the future,
given the GFA and will bring some options for discussion with the Board on the 27"July.
21. We recognise it will be a challenge to attract the right mix of diverse PMs to each forum
who are prepared to commit to what will be highly visible roles so we need to think
carefully about how we make it appealing.
22. As there is a risk that the forums may be viewed as ‘not having teeth’ it is critical for us
to demonstrate proper governance and transparency (e.g. attendance, agendas and
outputs). We need an infrastructure of dedicated people, with the right skills and capability
to manage this well, much like the way Co-Sec supports the Board. The Postmaster
Director (currently being recruited) will own PM engagement, co-ordinating all activity and
ensuring join up across the business. A similar role is needed in the SP team. Regional
Managers will need coaching on effective facilitation and chairing of meetings.
What are the next steps?
23. This is our action plan below by month:
e¢ July/August
o Recruit SP Engagement and PM Director roles
e August
o Hold briefing sessions to gain ‘buy in’ and commitment from our SLG population
and other key stakeholders who will be required to attend meetings
o Engage with the NFSP on our proposals
o Write up and publish the Terms of Reference for the forums
¢ September
o For SPs, all group forum engagement and individual account management activity
in place
o Launch the new postmaster engagement structure at local events
« October
o Pulse survey to measure PM sentiment
« November
o Regional PM forums stood up and first meetings held
e February
o National PM forum stood up and first meeting held
o Develop and trial new AM role with enhanced empowerment.
How will success be measured?
24. We will take a pulse survey to measure PM and SP sentiment in October and again in late
January 2022 using two of the same key sentiment questions asked in the Postmaster
consultation survey carried out earlier this year:1)’How would you describe your
relationship with Post Office?’ and 2) ‘How supported, or not, do you feel from Post
Office?’. Our aim is that this new formal engagement structure, coupled with other
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continuous improvement activity across Post Office, will lead to improved positive scores
of 30% for both by January, from a baseline of 17% and 25% respectively.
Appendix 1
National Federation of Sub Postmasters (NFSP) - briefing note
What is the background?
They are the representation organisation for postmasters, with around 7.3k of our branches
run by their members.
During the Network Transformation programme, the NFSP agreed to the Grant Framework
Agreement (GFA). This committed them to supporting Network Transformation, including
leration_of the final Isory)_phi f th in return for funding... At thi
The GFA is for a period of 15 years, starting in 2015, expiring in 2030. Under the GFA, we fund
their annual operation (£1.5m pa) and some specific projects (£1m pa). In return, they provide
certain services to postmasters and the opportunity for free membership for any postmaster
who wants it.
What is the NFSP mandated to negotiate on PMs behalf?
« Our NT Contracts (approx. 5544 NFSP members) state NFSP is solely acknowledged by
Post Office Ltd as a representative body of operators. The NFSP is the only body with
which Post Office Ltd will seek to discuss and consult on matters affecting operators,
subject to any legal, regulatory or political obligations.
e Our SPSO contracts (approx. 1770 members) state that we will consult the NFSP on
remuneration rates as well as the definitions of Commercial and Small Post Office®
branches and the remuneration system applicable to them.
What was Judge Frasers criticism and what action is being taken to address?
e (Cl) criticised POL’s relationship with the NFSP. In particular, the CIJ found that it was
“not an organisation independent of the Post Office” and “the Post Office effectively
controls the NFSP”. The Judge was particularly critical of the GFA, which contains terms
allowing POL to seek clawback of funds from the NFSP for breach of certain terms.
These included a term which required the NFSP not to take “any action” which might
bring POL’s “name or reputation into disrepute”. The Judge also criticised the NFSP itself
for appearing to “put its own members’ interests well below its own” in relation to how
it approached proposed changes to the NT contracts in 2011.
« Weare continuing discussions with the NFSP with respective legal advice on both sides
to find suitable wording for the GFA that resets the relationship to address the above
comments. We have also started a conversation with Calum Greenhow (CEO of the
NFSP) on their strategy to become financially independent. We are also looking
internally at various options on how we can ensure that the NFSP can become financially
independent.
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What is the current engagement approach?
« Monthly meeting with their ‘Negotiation & Engagement Team’ - discussions around
product change, network issues, IT, service and support updates, marketing plans as
well as remuneration.
« Ad hoc meetings to discuss specific issues with PO senior stakeholders e.g. MDA2 and
ATM withdrawal.
« Monthly meetings between NFSP CEO (Callum Greenhow) and Amanda Jones and
occasional “121s” with Nick Read once or twice a year.
¢ Quarterly tripartite Working Group between BEIS, NFSP and PO, established by BEIS 2
years ago with the then aim of working collaboratively to identify and capitalise on new
business opportunities for POL and its postmasters.
How does the NFSP use the Grant Fund Agreement?
The Grant Fund of £1.5m is used to ensure the NFSP maintains direct and indirect support to
its members, therefore costs include resource, outsourcing of support services, communication
printing costs, HO costs, meeting costs.
The NFSP provides support to its members in areas such as: Financial support through their
charity, the NFSP Benevolent Fund; legal and employment advice; contractual issue
representation.
There is a current
ual project specific grant agreed for the funding of a Post Office Mails
support team fo! to help support Postmasters to achieve their mails obligations and help
achieve the ma gregation targets, therefore achieving additional remuneration to their
members through the segregation bonus scheme. This year, this team is also focused on
achieving wider compliance metrics and building understanding of the MDA2.
They also have a desire to provide retail support to their members, which was declined by us
as we did not feel this provided good value for money.
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{ Strategy Day 1 -