Governance Materials for UKGI — March 2020
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Item
1. NED template appointment letter
2. Executive governance and materials underpinning the new Articles of Association and
Framework Document
a. Executive meeting structure
b. Matters Reserved to Board and Table of Delegated Authorities
c. Audit, Risk and Compliance Committee Terms of Reference
d. Nominations Committee Terms of Reference
e. Remuneration Committee Terms of Reference
f. Table of Obligations
8 Governance Framework Training Presentation
3. NED appraisal template
4. Induction
a. Induction meetings
b. Core induction materials
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Finsbury Dials
20 Finsbury Street
London
EC2Y 9AQ
PRIVATE AND CONFIDENTIAL
[Date]
Dear [],
Letter of appointment as Non-Executive Director
Following the approval of the Special Shareholder and the recommendation of
the Nominations Committee to the Board, I am pleased to issue this letter which
sets out the main terms of your appointment as a Non-Executive Director. The
Board will be asked to formally ratify your appointment at its meeting on [Date].
By accepting this appointment, you agree that this letter is a contract for
services and is not a contract of employment and you confirm that you are not
subject to any restrictions which prevent you from holding office as a director.
1. APPOINTMENT
Subject to the remaining provisions of this letter, your appointment shall be for
a term of three years commencing on [Date] until the Board meeting occurring
approximately three years from that date unless terminated earlier by either
party giving to the other six months’ prior written notice.
11 Your appointment is subject to the Company's articles of association, as
amended from time to time (Articles). Nothing in this letter shall be
taken to exclude or vary the terms of the Articles as they apply to you as
a director of the Company. Your appointment is subject to the prior
written consent of the Special Shareholder (as defined within the
Articles), [which has been obtained].
1.2 Continuation of your appointment is contingent on your continued
satisfactory performance and any relevant statutory provisions relating
to the removal of a director. If you are retired from office under the
Articles, your appointment shall terminate automatically, with immediate
effect and without compensation.
1.3. You may be required to serve on one or more Board committees. You
will be provided with the relevant terms of reference on your appointment
1.4
1.5
1.6
2.1
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to such a committee. You also may be asked to serve as a non-executive
director on the board of any of the Company’s subsidiaries or joint
ventures. Any such appointment will be covered in a separate
communication.
Notwithstanding paragraph 1 to paragraph 1.3, the Company may
terminate your appointment with immediate effect if you have:
(a) committed a material breach of your obligations under this letter;
(b) committed any serious or repeated breach or non-observance of
your obligations to the Company (which include an obligation not to
breach your statutory, fiduciary or common-law duties);
(c) been guilty of any fraud or dishonesty or acted in any manner which,
in the Company's opinion, brings or is likely to bring you or the
Company into disrepute or is materially adverse to the Company's
interests;
(d) been convicted of an arrestable criminal offence other than a road
traffic offence for which a fine or non-custodial penalty is imposed;
(e) been declared bankrupt or have made an arrangement with or for
the benefit of your creditors, or if you have a county court
administration order made against you under the County Courts Act
1984;
(f) been disqualified from acting as a director;
(g) not complied with the Company’s anti-corruption and bribery policy
and procedures or the Bribery Act 2010.
On termination of your appointment, you shall, at the Company’s
request, resign from your office as Non-Executive Director of the
Company and any offices you hold in any of the Company’s group
companies.
If matters arise which cause you concern about your role, you should
discuss these matters with the Senior Independent Director or Chairman.
If you have any concerns which cannot be resolved, and you choose to
resign for that, or any other, reason, you should provide an appropriate
written statement to the Senior Independent Director or the Chairman
for circulation to the Board.
TIME COMMITMENT
You will be expected to devote such time as is necessary for the proper
performance of your duties as a director. Overall we anticipate that you
will spend a minimum of 24 days a year on work for the Company. This
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2.2
2.3
2.4
3.1
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will include attendance at eight scheduled Board meetings per year, the
AGM (if one is called), one annual Board away day event a year (which
may span over two days), at least one site visit a year, Board dinners,
meetings with the non-executive directors, meetings with
representatives of the Special Shareholder, meetings forming part of the
Board evaluation process and training meetings. Some of these
meetings may involve overseas travel. In addition, you will be required
to consider all relevant papers before each meeting. Unless urgent and
unavoidable circumstances prevent you from doing so, it is expected that
you will attend such of the meetings outlined in this paragraph as may
be required.
The nature of the role makes it impossible to be specific about the
maximum time commitment. You may be required to devote additional
time to the Company in respect of preparation time and ad hoc matters
which may arise and particularly when the Company is undergoing a
period of increased activity. At certain times it may be necessary to
convene additional Board or committee meetings.
The overall time commitment stated in paragraph 2.1 will increase if you
become a committee member or chair, or if you are given additional
responsibilities, such as being appointed as non-executive director on the
board of any of the Company’s subsidiaries or joint ventures. Details of
the expected increase in time commitment will be covered in any relevant
communication confirming the additional responsibility.
By accepting this appointment, you confirm that, taking into account all
of your other commitments, you are able to allocate sufficient time to the
Company to discharge your responsibilities effectively. You should obtain
the agreement of the Chairman before accepting additional commitments
that might affect the time you are able to devote to your role as a Non-
Executive Director of the Company.
ROLE AND DUTIES
The Board as a whole is collectively responsible for the success of the
Company. The Board's role is to:
(a) provide entrepreneurial leadership of the Company within a
framework of prudent and effective controls which enable risk to be
assessed and managed;
(b) set the Company’s strategic aims, ensure that the necessary
financial and human resources are in place for the Company to meet
its objectives, and review management performance; and
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3.2
3.3
3.4
3.5
3.6
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(c) set the Company’s values and standards and ensure that its
obligations to its shareholders and others are understood and met.
As a Non-Executive Director you shall have the same general legal
responsibilities to the Company as any other director. You are expected
to perform your duties (whether statutory, fiduciary or common law)
faithfully, diligently and to a standard commensurate with the functions
of your role and your knowledge, skills and experience.
You shall exercise your powers in your role as a Non-Executive Director
having regard to relevant obligations under prevailing law and regulation,
including the Companies Act 2006 and the UK Corporate Governance
Code and associated guidance.
You shall have particular regard to the general duties of directors in Part
10 of the Companies Act 2006, including the duty to promote the success
of the Company under which all directors must act in the way they
consider, in good faith, would be most likely to promote the success of
the Company for the benefit of its members as a whole. In doing so, as
a director, you must have regard (among other matters) to:
(a) the likely consequences of any decision in the long term;
(b) the interests of the Company's employees;
(c) the need to foster the Company's business relationships with
suppliers, customers and others;
(d) the impact of the Company's operations on the community and the
environment;
(e) the desirability of the Company maintaining a reputation for high
standards of business conduct; and
(f) the need to act fairly as between the members of the Company.
You shall have particular regard to the Financial Reporting Council's UK
Corporate Governance Code and associated Guidance on Board
Effectiveness in respect of the role of the Board and the role of the non-
executive director and to the Code of Conduct for Board Members on
Public Bodies.
In your role as Non-Executive Director, you shall also be required to:
(a) constructively challenge and help develop proposals on strategy;
(b) scrutinise the performance of management in meeting agreed goals
and objectives and monitor the reporting of performance;
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3.7
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(c) satisfy yourself on the integrity of financial information and that
financial controls and systems of risk management are robust and
defensible;
(d) be responsible for determining appropriate levels of remuneration of
executive directors and have a prime role in appointing and, where
necessary, removing senior management and in succession
planning;
(e) devote time to developing and refreshing your knowledge and skills;
(f) uphold high standards of integrity and probity and support the
executive directors in instilling the appropriate culture, values and
behaviours in the boardroom and beyond;
(g) satisfy yourself as to the Company’s ongoing and consistent
compliance with any regulatory responsibilities;
(h) insist on receiving high-quality information sufficiently in advance of
Board meetings;
(i) take into account the views of shareholders and other stakeholders
where appropriate;
(j) make sufficient time available to discharge your responsibilities
effectively;
(k) exercise relevant powers under, and abide by, the Articles;
(1) disclose the nature and extent of any direct or indirect interest you
may have in any matter being considered at a Board or committee
meeting and, except as permitted under the Articles you will not
vote on any resolution of the Board, or of one of its committees, on
any matter where you have any direct or indirect interest;
(m) immediately report your own wrongdoing or the wrongdoing or
proposed wrongdoing of any employee or other director of the
Company of which you become aware to the senior independent
director;
(n) exercise your powers as a director in accordance with the Company's
policies and procedures, internal control framework and the Bribery
Act 2010; and
(0) not do anything that would cause you to be disqualified from acting
as a director.
Unless the Board specifically authorises you to do so, you shall not enter
into any legal or other commitment or contract on behalf of the Company.
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3.8
4.1
4.2
4.3
6.2
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You shall be entitled to request all relevant information about the
Company’s affairs as is reasonably necessary to enable you to discharge
your duties.
FEES AND EXPENSES
You shall be paid an annual fee of [Fee] (current at the date of this letter),
which shall be paid in equal instalments monthly in arrears through PAYE
after deduction of any taxes and other amounts that are required by law,
which shall be subject to a periodic review by the Board. This fee covers
all duties, including service on any Board committee.
The Company shall reimburse you for all reasonable and properly
documented expenses that you incur in performing the duties of your
office. The procedure and other guidance in respect of expense claims is
available from the Company Secretary.
On termination of your appointment, you shall only be entitled to such
fees as may have accrued to the date of termination, together with
reimbursement in the normal way of any expenses properly incurred
before that date.
INDEPENDENT PROFESSIONAL ADVICE
In some circumstances you may consider that you need professional
advice in the furtherance of your duties as a director and it may be
appropriate for you to seek advice from independent advisers at the
Company’s expense. A copy of the Board’s agreed procedure under which
directors may obtain such independent advice is available from the
Company Secretary. The Company shall reimburse the reasonable cost
of expenditure incurred by you in accordance with its policy.
OUTSIDE INTERESTS
You have already disclosed to the Board the commitments you have
outside your role in the Company. You must inform the Chairman in
advance of any changes to these commitments. In certain circumstances,
you may have to seek the Board's agreement before accepting further
commitments which either might give rise to a conflict of interest or a
conflict with any of your duties to the Company, or which might impact
on the time that you are able to devote to your role at the Company.
It is accepted and acknowledged that you have business interests other
than those of the Company and have declared any conflicts that are
apparent at present. If you become aware of any further potential or
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7A
7.2
7.3
10.
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actual conflicts of interest, these should be disclosed to the Chairman and
Company Secretary as soon as you become aware of them and again you
may have to seek the agreement of the Board.
CONFIDENTIALITY
You acknowledge that all information acquired during your appointment
is confidential to the Company and should not be released, communicated
or disclosed to third parties or used for any reason other than in the
interests of the Company, either during your appointment or following
termination (by whatever means), without prior clearance from the Chief
Executive. This restriction shall cease to apply to any confidential
information which may (other than by reason of your breach) become
available to the public generally.
You acknowledge the need to hold and retain Company information (in
whatever format you may receive it) under appropriately secure
conditions.
Nothing in this paragraph 7 shall prevent you from disclosing information
which you are entitled to disclose under the Public Interest Disclosure Act
1998, provided that the disclosure is made in accordance with the
provisions of that Act and you have complied with the Company's policy
from time to time in force regarding such disclosures.
TRAINING
On an on-going basis, and further to the annual evaluation process, the
Company may arrange for you to develop and refresh your skills and
knowledge in areas which are mutually identified as being likely to be
required, or of benefit to you, in carrying out your duties effectively. You
should try to make yourself available for any relevant training sessions
which may be organised for the Board.
INSURANCE AND INDEMNITY
The Company has directors’ and officers’ liability insurance and it intends
to maintain such cover for the full term of your appointment. The
indemnity limit is £60m (current at the date of this letter).
CHANGES TO PERSONAL DETAILS
You shall advise the Company Secretary promptly of any change in your
address or other personal contact details.
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11.
12.
13.
14,
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RETURN OF PROPERTY
On termination of your appointment with the Company however arising,
or at any time at the Board's request, you shall immediately return to the
Company all documents, records, papers or other property belonging to
the Company which may be in your possession or under your control, and
which relate in any way to the Company's business affairs and you shall
not retain any copies thereof.
MORAL RIGHTS
You hereby irrevocably waive any moral rights in all works prepared by
you, in the provision of your services to the Company, to which you are
now or may at any future time be entitled under Chapter IV of the
Copyright Designs and Patents Act 1988 or any similar provisions of law
in any jurisdiction, including (but without limitation) the right to be
identified, the right of integrity and the right against false attribution, and
agree not to institute, support, maintain or permit any action or claim to
the effect that any treatment, exploitation or use of such works or other
materials, infringes your moral rights.
POST-TERMINATION RESTRICTION
By countersignature of this letter and in consideration for the fees
payable to you under the terms of this letter, you agree that, in order to
protect the confidential information, trade secrets and business
connections of the Company to which you have access as a result of your
appointment, you will not (without the previous consent in writing of the
Company), for the period of six months immediately after the termination
of your appointment, whether as principal or agent and whether alone or
jointly with, or as a director, manager, partner, shareholder, employee
consultant of, any other person, carry on or be engaged, concerned or
interested in any business which is similar to or which is (or intends to
be) in competition with any business being carried on by the Company or
any company in the Company's group.
DATA PROTECTION
Post Office Limited is the Data Controller for the information about you
that we use and hold. We comply with the UK Data Protection Act and
respect your privacy in everything we do. We collect information from
you such as name, bank details, NI number in order to pay expenses in
accordance with this letter. We collect information for justifiable
purposes such as providing you with access to Post Office systems and
providing training.
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15.
16.
16.1
16.2
17.
is.
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For more information please contact our Data Protection Officer by
sending an email to data.protectioni
THIRD PARTY RIGHTS
No one other than you and the Company shall have any rights to
enforce the terms of this letter.
ENTIRE AGREEMENT
This letter constitutes the entire terms and conditions of your
appointment and supersedes and extinguishes all previous agreements,
promises, assurances, warranties, representations and understandings
between you and the Company, whether written or oral, relating to its
subject matter.
You agree that you shall have no remedies in respect of any
representation, assurance or warranty (whether made innocently or
negligently) that is not set out in this letter and you shall not have any
claim for innocent or negligent misrepresentation or negligent
misstatement based on any statement in this letter.
VARIATION
No variation of this letter shall be effective unless it is in writing and
signed by you and the Company (or respective authorised
representatives).
GOVERNING LAW AND JURISDICTION
Your appointment with the Company and any dispute or claim arising out
of or in connection with it or its subject matter or formation (including
non-contractual disputes or claims) shall be governed by and construed
in accordance with the law of England and Wales and you and the
Company irrevocably agree that the courts of England and Wales shall
have exclusive jurisdiction to settle any dispute or claim that arises out
of or in connection with this appointment or its subject matter or
formation (including non-contractual disputes or claims).
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Please indicate your acceptance of these terms by signing and returning to the
attached copy of this letter to me.
Yours sincerely
Veronica Branton (Company Secretary)
For and on behalf of Post Office Limited
I agree to the above terms of my appointment as Non-Executive Director of
Post Office Limited as set out in this letter.
Signed on [2019]
[Name]
Non-Executive Director
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Post Office Limited: Operating Rhythm
+ Monday Group CEO Direct Reports Check in meeting (60 mins) - the focus is on the week ahead and any issues that have emerged in the previous week.
+ Leadership Council (120 mins. Fortnightly on Tuesday or Wednesday) - the primary objective is to bring the Leadership of the Organisation together to tackle Group wide issues ~ business performance,
culture, purpose, performance management and cross functional alignment.
+ Wednesday 10@10 - FD wide, all colleagues town hall meeting. The objective is to inform colleagues about business performance, corporate issues and our change agenda.
+ Steering Groups are set up to take decisions/ escalate to GE as appropriate for projects/ major topics (e.g. GLO, Telecoms RFP/ sale)
1. Tuesday Trading and 2. Wednesday tactical__I 3. Wednesday strategic I 4. Monthly UK 5. Monthly Customer 6. Investment 7. Risk, Compliance and
Business Performance GE meeting (120 mins) I monthly GE meeting (All_I Operations meeting (120 I Plan meeting Governance meeting
meeting Chair: Nick Read day) s. Wednesdays) Chair: Al Cameron
Secretariat: Veronica Chair: Nick Read Chair: Al Cameron Secretariat: David Parry
Branton Secretariat: Veronica Burwood
Branton
Group wide weekly tactical No formal pre-reads. The I The GE assists the Group _I This isa strategic meeting, I This is a strategic meeting, I The IC assesses Business I The RCC supports the
meeting which reviews focus is upon tactical CEO in running the which focuses upon which focuses upon Case proposals with a Group Executive (GE) in
business performance through I decision making. Topics business and is the forum I lowering our cost to serve _I improving our customer spend between £2m and —_I fulfilling their
key trading data and core typically 15-30 minutes in I for major operational and delivering a simple and I proposition and delivering I £5m and those with a responsibilities in the
KPI's. One pack, one version I duration. Time is kept decisions. improved offer to upon our brand contract spend over £5m _I effective oversight of risk
of truth. aside for issues which Postmasters. Productivity, I promises. Outputs will for submission to Board.
emerge from the Monday
Scheduled two weeks
efficiency, cost reduction
include; growing our
management, internal
control and assurance, and
check in. before the monthly Board I and associated change customer base, deepening ‘compliance in the
meeting. All papers in plans will drive the agenda. I our customer relationships, Company. The Committee
advance. Topics should be driving footfall and reports to the Board's
strategic and forward increasing revenue. Audit, Risk and Compliance
looking with enough Committee
meaningful time for debate.
T._] Review of business T._] Tactical decision T. I Monthly business and I 1. I Implementation and I 1. I Implementation and ‘Approval of Business, Risk Management
performance and key items which cannot trading performance. tracking of tracking of customer Cases between £2m -
trading data. wait for or be Operational Plans. proposition and brand £5m. Approval of
accommodated on the strategy. contract spend over
monthly GE agenda £5m for submission to
the Board.
2. I Review of Board 2. I Compliance
items.
3. I Development and ‘Audit
implementation of
strategy.
4. I Approval and oversight 3, I Internal controls
of Operational Plans.
5, I Budget and Five Year ‘Annual Report and
Plan. Accounts
6. I Communications Review of ARC items
Strategy.
7. I People Strategy.
Output: Output: Output: Output: ‘Output Output: Output:
Trading and Actions and record of Minutes and actions Actions as required Actions as required Actions and record of Minutes (circulated to
performance figures decisions, as Approval of papers for decisions ARC) and actions
across the business required. Board Approval of papers for
Immediate actions to ARC
address performance
issues.
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nance report to Board (including the new Articles of Association
Changes to Matters Reserved to the Board & Terms of
Reference
Matters Reserved to Board
The Matters Reserved to Board were approved in 2015. These note that certain
matters require shareholder consent and set out the main categories of
approvals reserved to Board such as setting strategy. The following additions
have been made:
* a general section on the purpose of the Board, requirement to operate in
accordance with the Articles of Association and in compliance with the
Companies Act 2006
« the matters that requires Shareholder consent which now include group
matters reserved as well as company matters reserved
« an explicit delegation of authority to the Group Chief Executive Officer for the
day-to-day running of the company
* appendices with the spend approval limits, the authorised signatories and
company seal authority, treatment of liabilities and indemnities
« Table of Delegated Authorities, mapping out the approval stages for decisions.
Terms of Reference (ToR)
We've made changes to produce a consistent format and terminology so it is clear
whether the Committee is:
* receiving information to ensure that appropriate processes, policies and
controls are in place and/or monitoring implementation of agreed processes,
policies and controls in its assurance and oversight role;
e taking a decision under its delegated authority from the Board; or
* approving for recommendation to the Board or Shareholder where the ultimate
authority rests with them.
Principally we've used the terms Review, Approve, Approve for
recommendation.
Reporting responsibilities, authority and annual review and approval have been
included as sections in each ToR.
Matters Reserved to the Board
Document Note the Matters Reserved to the Board were last updated in 2015.
Paragraph(s)
Changes because of AoA revisions and addition of the Framework
Document
6&7 Reflects that there are now Company & Group Matters Reserved
(previously no Group Matters as not a Group).
Company Reserved Matters are all as before.
Group Reserved Matters within the AoA and Framework
Document (where applicable): Matters concerning all Group
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of Association)
nance report to Board (including the new Article:
Companies now requiring Shareholder (BEIS) consent that was
not required before:
- The entry into administration of the Company.
- The formation of any subsidiary undertaking or the
purchase, cancellation of transfer of Shares, or granting of
any Share Rights, in the company.
- The sale, issue, allotment, purchase, cancellation or
transfer of any shares by the company in any subsidiary
or associated undertaking.
- The amalgamation or merger of the company with any
other company or business undertaking.
- The creation or granting of any encumbrance over the
whole or any part of the company’s business, undertaking,
assets or over any Shares unless arising in the ordinary
course of business).
- Making of a loan, granting of credit or giving of a
guarantee or indemnity apart from _ intra-group
arrangements entered into in the ordinary course of
business.
- The restructure or reorganisation of the Group Structure
such that the Company’s shareholding in its subsidiary
undertakings is altered or amended
- The appointment, remuneration of any person who is not
a member of the Group as a director of any member of the
Group (other than the company and a member of the
Group that is regulated by the FCA
- The additional remuneration of any employee (but not
salary arrangements) of a member of the Group in their
capacity as a director of a member of the Group
- The establishment of (or approval of any agreement to
establish) a new pension scheme by the company
- Adoption, and variation of, Group/Company Business Plan
(previously only Strategic Plan required approval).
8 (i) Amendment to reflect requirement to develop a Group Strategic
Plan (under the Framework Document)
8 (xi) Addition of purpose of ensuring that any statutory or
administrative requirements for the use of public funds are
complied with, having regard to the requirements under the
Articles of Association, the Framework Document and associated
guidance (to reflect requirements under the Framework
Document).
9 (i) Matters requiring Shareholder Consent require Board approval
(in some instances are approved by a Board Committee - see
Table of Delegated Authorities)
9 (x) The provision regarding dividends has been updated to reflect
where the dividend is within the Group Strategic Plan and
references where POL must approve subsidiary dividend
declarations.
Monthly
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nance report to Board (including the new
of Association
Changes made to reflect best practice and the Code
1-3 Purpose amended to reflect duty to comply with AoA, regulatory
requirements and the Code (where appropriate). Wording
otherwise revised for stylistic reasons.
8 (ii) Approval of the Group’s purpose and values (Code Principle B)
9 (ii) Approval of the Group’s purpose and values (Code Principle B -
which includes strategy but this requires Shareholder approval)
9 (xxx) Addition of approval of Board Committee Terms of Reference
(this also happens in practice)
8 (viii), 9, Addition of a delegation to the Chief Executive (rather than
12&13 Group Executive) which is how the delegation exists in practice
and this addition makes it clear and explicit. There is also the
addition of the requirement for the Board to approve the
division of responsibilities between the chair, chief executive
and senior independent director (Code Principle K)
Changes to reflect current operational practice which is not reflected
in the MRB currently
9 (vi) The approvals relating to succession planning, talent
management and diversity have been updated to reflect what the
Nominations and Remuneration Committees actually do.
9 (xv - xvii) I The financial commitments section has been updated to reflect
the approvals that Board undertakes in practice as has developed
since the last update to the Matters Reserved to the Board and
the addition of subsidiary companies.
9 (xviii) Removal of reference to pension investment strategy and
monitoring performance of investment managers which is
undertaken by the trustees.
9 (xx) Insertion of definition of a senior employee (from the
Remuneration Committee Terms of Reference)
9 (xxi) Addition of requirement to approve subsidiary director
remuneration (appointment already provided for).
9 (xxii) Approval of Group Remuneration Policy (work in progress) and
introduction of an STIP scheme plus criteria and amount of
awards (previously only referred to LTIP).
9 (xxiii) Approval of Group policies amended to refer to key policy
framework which sets out where policies may be approved
10-11 Updated to reflect current committee structure
14-17 Membership and Secretary sections updated to remove names
and to amend number of Non-Executive directors (being six,
including the Chair, Senior Independent Director and
Shareholder Representative)
20 Removal of a requirement to hold eight Board meetings per
year and two strategy sessions to avoid this being too
prescriptive.
23 Amended to reflect that Group employees may attend Board
meetings at the request of the Chair (previously Post Office), so
this now includes all Group Companies.
24 Addition of ability to pass resolutions in writing which is
permitted under the AoA and happens in practice.
25 Correction of typo within the original Matters Reserved.
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nance report to Board (including the new Articles of Association)
Appendices I Addition of Spend Approval Limits, Authorised Signatory &
Company Seal Authority list & Liabilities and Indemnities
Approvals. Each were previously found in separate documents
and are now collated into this single document for ease of use.
Appendices I Addition of a Table of Delegated Authorities which sets out the
approvals path for matters requiring a decision from Executive
Committee to Shareholder (BEIS) and flags where other
sources may require consulting (e.g. relevant policies and
processes).
Audit, Risk and Compliance Committee
ToR
Paragraph
Changes because of changes made in the AOA
8-9 Approval of changes to accounting reference date, practice or
policy required by law or generally accepted accounting policies
or not (in the latter case for Shareholder consent)
Changes made to reflect best practice and the Code
B Revision of headings and categorisation of duties relating to the
Committee’s duties to reflect the model ToR from the
Governance Institute.
2 Monitoring the integrity of the financial statements - wording
reflects the model ToR from the Governance Institute.
5 Review and report to the Board on significant financial reporting
issues
7 Addition of reporting to the Board when not satisfied with
proposed financial reporting
9 Review and approve the statements in the ARA concerning
internal controls and risk management
10 Wording amended to reflect the model ToR which simply
amalgamates duties listed in other areas of the existing ToR
24 Adequacy and security of Whistleblowing arrangements. This
also happens in practice.
25, 27 & 28 I These provisions have been reworded and expanded upon in line
with model ToR. This also happens in practice.
30 - 35, 37 I This section has been taken from the model ToR adapted to the
specific requirements of POL.
Key changes:
- Direct access of Internal Audit to Board and Committee Chair
- Requirement to meet with the internal auditor once a year
without management present.
- Determine whether third party independent review is required
39 Review and approve selection procedure for appointment of the
audit firm.
40 If an Auditor resigns, review the issues leading to this and
determine whether any action is required.
42 Review the findings of the external audit (reworded as originally
more limited)
43 Addition of review of representation letters
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45 Monitoring of the independence of the external audit
47 Addition of requirement to meet regularly and at least once a
year without management.
48 Assessment of qualifications, expertise and resources and
effectiveness of audit process
49 Coordination with internal audit to be ensured.
50 - 52 Reporting responsibilities to the Board, in the ARA
54-57 Authority outlined in more detail (paragraph 58 was part of
original ToR)
61 Inclusion of requirement to be independent.
Chair cannot be a member of the Committee (Code Provision 24)
62 Appointment of Chair and election of cover if chair is not
present.
72 Convening of meetings — added possibility of any members,
external audit or internal audit requesting meetings (as per
Model ToR).
Changes to reflect current operational practice which is not reflected
in the ToR currently
1 Change of Company to Group reflecting the Committee oversight
role of its subsidiaries. Addition of risk appetite monitoring which
happens in practice.
3&4 Approval of the ARA & half yearly results for recommendation to
the Board (also in model ToR for ARC to review results requiring
Board approval). This has been incorporated with the existing
references to what should be reviewed. Other sections are
incorporated into paragraph 5.
7 Approval of Treasury Policy
16 List of risks reviewed with Head of Risk and clarified in simpler
definition, with expansion in footnote.
18 Change of Company to Group reflecting the Committee oversight
role of its subsidiaries.
21 Breach analysis happens in practice.
22 The ARC approves the Group Insurance in practice.
29 This happens in practice and is part of the ARC's role in monitoring
compliance.
31 Addition of every 2 years on the requirement to approve the
Internal Audit Charter.
53 Amendment of minutes for noting from POMS to receive reports
from subsidiary companies regularly and as requested by the
Committee (reflecting Post Office Insurance and Payzone and fact
that the minutes are not provided, but reports).
70 Notice amended to three working days in line with the Board and
other Committees
Nominations Committee:
Changes because of changes made in the AoA
[N/A
Alignment between the Matters Reserved to Board and the Terms of
Reference
Monthly
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[N/A
Changes made to reflect best practice because of changes to the
Governance Institute’s model terms which we propose adopting
ToR
Paragraph
18. Review the Group’s Governance Framework.
Changes to reflect current operational practice which is not reflected
in the ToR currently
1.(iii) Approve the appointment of individuals to the Company
subsidiary boards (Payzone now included).
1.(iv) Approve the nomination for appointment and reappointment of
individuals employed by the Company to the First Rate Exchange
Services Holdings Limited (“FRESH”) Board, and approve the
proposal for removal of individuals employed by the Company
from the FRESH Board.
21. Review and approve the processes for Board and Committee
evaluations.
22. Approve the appointment of external facilitators for Board and
Committee evaluations.
23. Review developments in corporate governance
and determine whether changes should be made to the Group’s
governance arrangements.
Remuneration Committee:
Changes because of changes made in the AoA
[N/A
Alignment between the Matters Reserved to Board and the Terms of
Reference
13. Approve for recommendation to the Board?, the establishment of
(or approval of any agreement to establish) a new pension
scheme by any member of the group.
14. Have oversight and approve for recommendation to the Board any
material changes to the pension arrangements for company
employees, in particular affecting the rate of contributions
required to be made?.
15. Approve for recommendation to the Shareholder of any exit
package that would be in excess of the contractual obligations for
the Group Chief Executive and Chief Financial Officer (previously
silent on CEO).
Changes made to reflect best practice because of changes to the
Governance Institute’s model terms which we propose adopting
ToR
Paragraph
41. The Secretary shall provide current and new Committee members
with any training, briefings or induction required under the
supervision of the Chair (change in wording).
1 Which in turn
requires the approval of the Shareholder.
2 Executive Directors’ remuneration packages and changes to these, including pensions,
must be approved by the Shareholder.
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of Association
Post Office Limited
(“the Company”)
Matters Reserved to the Board
A. Purpose
1. The Board is collectively responsible for setting the Company’s strategic
direction and primary business objectives. It establishes a robust
governance framework and ensures that the Company has financial and
human resources required to achieve its agreed objectives.
2. The Company is required to operate in accordance with the Companies Act
2006, the Company’s Articles of Association (the Articles) and any other
applicable and appropriate regulatory requirements. The Company seeks to
comply with the Financial Reporting Council’s UK Corporate Governance
Code 2018, where appropriate.!
3. The Directors’ statutory duties are set in the Companies Act 2006. One of
the primary duties of the Directors is to promote the success of the
Company for the benefit of its Shareholder? and taking into account the
interests of key stakeholders.
B. Matters Reserved to the Shareholder
4. In accordance with the Company’s Articles, the Shareholder may, by
special resolution, direct the directors to take, or refrain from taking, any
specified action (Article 45).
5. Article 8.1 (A) - (F) sets out certain powers reserved to the Shareholder
regarding Company Matters, which may occur and be effective only with
prior written consent from the Shareholder:
i. Appointment, reappointment or removal from office of any director,
chief executive (or equivalent) or Chair of the Company (Articles 8.1
(A) (i)-(iii), 40, 42, 44)
ii. Any change in the prescribed minimum number of directors of the
company (Article 8.1 (B) (via the Nominations Committee)
iii. The appointment of any person other than a director of the company
as an alternate director of any director of the company (Article 8.1 (C))
iv. Any action taken by any company or the Board (including any
appointment, removal or re-designation) which would have the effect
that the Board ceased to include directors appointed to the post of
Chair, chief executive and finance director (or directors carrying out
the general functions denoted by such posts) (Article 8.1 (D))
v. Approval or variation of director and officer remuneration and/or terms
and conditions of employment or engagement (Articles 8.1(E), 50-52
(via the Remuneration Committee)
TAs required under section 9.4 of the Framework Document between Post Office Limited, the Department of
Business, Energy & Industrial Strategy (BEIS) & UK Government Investments (UKGI) (the Framework
Document).
? BEIS
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Matters Reserved to the Board
vi. Declaration or payment of a dividend or other distribution outside of
the Group Strategic Plan (Article 8.1 (F))
vii. Any distribution, payment or return to Shareholders of the Company
out of capital of the Company (Articles 8.1 (G), 76)
6. Article 8.1 (H) - (Z) sets out the powers reserved to the Shareholder
relating to Group Matters, which may occur and be effective only with prior
written consent from the Shareholder:
i. The alteration or deletion of, or the ratification of any breach of, all
or any part of the Articles (Articles 8.1 (H))
ii. Voluntary winding up or entry into administration of the company
(Article 8.1 (1))
iii. Redemption or purchase of the Company’s own shares or reduction
in share capital (Article 8.1 (J))
iv. Set up of a new subsidiary company or any action relating to shares
in the Company (Article 8.1 (K))
v. Any action relating to shares held by the Company in a subsidiary
or associated undertaking? or in First Rate Exchange Services
Holdings Limited (while an associated undertaking of a member of
the Group) or in any other associated undertaking of a member of
the Group (Article 8.1(L))
vi. The amalgamation or merger of the Company with any other
company or business undertaking (Article 8.1 (M))
vii. The creation or granting of any encumbrance relating to the
Company’s business, undertaking, assets or Shares unless arising in
the ordinary course of business* (Article 8.1 (N))
viii. Making of a loan, granting of credit or giving of a guarantee or
indemnity apart from intra-group arrangements entered into in the
ordinary course of business® (Article 8.1 (O))
ix. The restructure or reorganisation of the Group structure such that
the Company’s shareholding in its subsidiary undertakings is altered
or amended (Article 8.1 (P))
x. The actual or proposed presentation of a petition to appoint an
administrator of the Company (Article 8.1 (Q))
xi. Change to accounting reference date, practice or policy if different
from the Group and unless required by law or generally accepted
accounting principles (Article 8.1 (R))
xii. The appointment, remuneration of any person who is not a member
of the Group as a director of any member of the Group (other than
3 An associated undertaking is defined an entity over which a company has significant influence but cannot
exercise control (pursuant to International Accounting Standard 28) and normally demonstrated by 20-50%
shares held. A subsidiary undertaking is defined as (a) holds a majority of the voting rights in it, (b) or is a
member of it and has the right to appoint or remove a majority of its board of directors, or (c) is a member of
it and controls alone, pursuant to an agreement with other members, a majority of the voting rights in it
(3.1159 CA 2006).
* This is a factual analysis that must be conducted on a case-by-case basis.
5 As previously defined.
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nance report to Board (including the new
Post Office Limited
Matters Reserved to the Board
the company and a member of the Group that is regulated by the
FCA (Article 8.1 (S)); or
xiii. The additional remuneration of any employee (but not salary
arrangements) of a member of the Group in their capacity as a
director of a member of the Group (Article 8.1 (S))
xiv. The establishment of (or approval of any agreement to establish) a
new pension scheme by the company (Article 8.1 (T))
xv. The adoption of or any material variation or amendment of a Group
Strategic Plan previously adopted (Article 8.1 (U) and Group
Business Plan (Section 4.2 Framework Document)®
xvi. The adoption, material variation or amendment to a Group Strategic
Plan previously adopted (Article 8.1 (V))
xvii. Entry into a Relevant Transaction’ the Company’s interest in an
asset is lost meaning it can no longer perform the business of the
Company as per the Group Strategic Plan (Article 8.1 (W))
xviii. The entry into or implementation of a Relevant Transaction® by the
Company involving actual or likely spend or liability in excess of
£50,000,000 (Article 8.1 (X))
xix. The entry by the Company into any Relevant Transaction? which is
not on commercial terms and is not considered by the Board to be
in the interests of the company (Article 8.1 (Y))
xx. Any action in relation to the Post Office Trade Mark which prevents
the Group using the Trade Mark, including sale, assignment,
charging, mortgaging, granting of licence or disposal (Article 8.1
(2))
xxi. I The borrowing of funds from any source other than another member
of the Post Office Group, Article 8.1 (Z) (AA))
c. Duties & Responsibilities
7. In addition to its legal duties, the Board has the following specific
responsibilities:
i. Setting the strategic direction of the Group by developing a Group
Strategic Plan and Group Business Plan;
ii. Establishing the Company’s purpose and values;
iii. Setting the Company’s risk appetite and ensuring a proper
framework exists for the management of risk;
iv. Maintenance of proper accounting and tax records, as required by
the Companies Act 2006;
v. Maintenance of a sound system of internal control so that the
Company can meet its statutory and regulatory obligations;
5 Subsidiary Company Business Plans require the approval of the Company and Shareholder.
7 Relevant Transaction is any transaction which is not (i) in the ordinary course of business, (ii) intra-group; or
(iii) approved in the Group Strategic Plan (Article 2).
® As previously defined
° As previously defined
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vi.
vii.
viii.
xi.
Maintenance of the reputation of the Company as a public institution,
including consideration of new products and activities which may
attract public interest or have an impact on the value of the
Company’s brand;
Ensuring regular and active communications with the Shareholder,
particularly on the Company’s performance against the Strategic
Plan and other key indicators;
Delegation of authority to Board Committees according to their
respective Terms of Reference;
Delegation of authority to the Group Chief Executive;
Formal evaluation of the performance of the Board and Board
Committees; and
Ensuring that any statutory or administrative requirements for the
use of public funds are complied with, having regard to the
requirements under the Articles of Association, the Framework
Document and associated guidance.
8. Pursuant to Article 49, the Board may delegate any of the powers conferred
to them under the Articles to any executive director or committee as they
see fit. Whilst the Board may choose to so delegate, the following matters
are reserved to the Board, unless a specific delegation is in place (the Board
may revoke any delegated authority granted):
Approve for recommendation to the Shareholder on those matters requiring
Shareholder consent, as specified in the Articles (see paragraph B above)!°;
9. Strategy & Management
Approve the Group’s purpose, and values ;
Approve the Funding Agreement with the Shareholder and monitoring
of the achievement of milestones contained within the plan;
Approve the adoption of and review annually the criteria for
measurement of performance (Key Performance Indicators) and
management?!;
Review and monitor necessary corrective action required in light of
reviews of performance against the Group Business Plan;
Approve succession plans for directors of Group Companies and
monitor diversity, talent management and succession plans for senior
leaders of the Group (delegated to the Remuneration and Nominations
Committees).
*° Certain matters may be approved by a Board Committee. Please refer to the Delegated Authorities Table.
11 The Company is required to provide quarterly reports to the Shareholder on the targets and budgets set out
in the GSP and the performance of the branch network (FD Section 13).
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Matters Reserved to the Board
10. Ownership, Capital Structure & Constitution??
Approve the change of the Company Name, trading name or Registered
Office for any member of the Group
11. Financial Reporting & Controls
i. Approve the Annual Report and Accounts (on recommendation from
the Audit, Risk and Compliance Committee);
ii. Approve the half-yearly results13 (on recommendation from the Audit,
Risk and Compliance Committee);
iii. Approve the recommendation for declaration of dividend and payment
of interim dividend (within the Group Strategic Plan) (Articles 68 -
69)14;
iv. Approve the risk appetite statement (on recommendation from the
Audit, Risk & Compliance Committee);
v. Review the Company’s risk management systems, internal controls
and key systems (delegated to the Audit, Risk & Compliance
Committee);
vi. Approve changes to accounting reference date, practice or policy by
the Company as required by law or generally accepted accounting
principles (delegated to the Audit, Risk & Compliance Committee);
vii. Approve of Group treasury and banking policies, including methods of
mitigating against foreign currency exposure and any use of financial
derivatives (delegated to the Audit, Risk & Compliance Committee);
viii. Monitor the independence of the external auditor (delegated to the
Audit, Risk & Compliance Committee).
12. Financial Commitments
i. Approve the entry into or implementation of a transaction (OPEX spend)
by the Company involving actual or likely spend or liability15 up to
£50,000,000;16
ii. Approve the entry into or implementation of a transaction by
the Group involving actual or likely spend or liability in excess of
£5,000,000 for Post Office Management Services Limited, and
£2,000,000 for Payzone Bill Payments Limited;
iii. Approve changespend over £5,000,000 for the Group (£2,000,00 for
Payzone Bill Payments Limited);
22 ll other matters require Shareholder consent (see paragraph B above).
13 Where produced
* Declaration or payment of any dividend outside of the Group Strategic Plan requires Shareholder consent
(see paragraph B above). The Company is required to consent declarations of dividends within the Group
Strategic Plan for Subsidiary Companies.
9 See above
26 See appendix for approvals required for unlimited liabilities and indemnities. There are certain matters where
there is a risk of loss or liability or a wider risk which should be escalated to the Board (and, in some instances,
the Shareholder). These instances may also come under the matters requiring Shareholder consent.
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iv. Approve the Group pension strategy and any material changes to
pension arrangements for the Group, in particular reflecting the rate of
contribution made (on recommendation from the Remuneration
Committee).
13. Appointment and Senior Remuneration
i. Approve the appointment or removal of the Secretary (Article 66);
ii. Approve the appointment, remuneration or dismissal of senior
employee17 (delegated to the Nominations and Remuneration
Committees);
iii. Approve the appointment, reappointment, removal and remuneration of
directors for Subsidiary Companies18 (delegated to the Nominations and
Remuneration Committees);
iv. Approve the Group Remuneration Policy19 (on recommendation from the
Remuneration Committee);
v. Approve the introduction of any long or short term incentive scheme,
performance criteria and any awards made under such schemes
(delegated to the Remuneration Committee)20;
vi. Approve the appointment, reappointment or removal of the Group’s
principal professional advisors, 21 including the external auditor (on
recommendation from the Audit, Risk & Compliance Committee).
14. Governance
i. Ensure delivery of obligations on the Company under the Postal Services
Act 2011, including the publication of the annual Network Report and
Postal Heritage Report;
ii. Approve the adoption of the Company policies related to business
operation and/or strategic matters and identified within the approved
policy framework as requiring Board level oversight (some policies may be
approved by Board Committees in accordance with the key policy
framework);
. Authorise a Conflict of Interest (Article 54 (A));
iv. Approve overall levels of insurance for the Company, including directors’
and officers’ liability insurance and any arrangement for indemnity of
directors (delegated to the Audit, Risk & Compliance Committee) ;22
”” Defined as any executive who reports directly to the Group Chief Executive Officer, other than executive
directors.
‘8 The Nomination Committee may also approve the nominations for appointment, reappointment or removal of
any statutory director who is an employee of the Group to an associated undertaking of the Group and the
appointment, reappointment or removal of the Shareholder Representative to an associated undertaking (First
Rate Exchange Services Holdings Limited)
28 This incorporates the establishment of any profit-sharing, share option, bonus or any other incentive
schemes for employees of any Group Company.
2° Remuneration of Executive Directors requires Shareholder approval.
2 This consists of advisors specifically mentioned in the Group Annual Report & Accounts including but not limited
to, the Group's solicitors, actuary and financial advisors.
» The Company must consider if the Group policy is sufficient or whether additional cover is required.
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Matters Reserved to the Board
vi.
vii.
viii.
15.
16.
Approve the adoption of and changes to Matters Reserved to the Board
(including appendices23) and Board Committee Terms of Reference (on
recommendation from the relevant committee for the relevant
committee);
Approve the process for the annual review of Board and Board Sub-
Committee Effectiveness (delegated to the Nominations Committee);
Approve the authority delegated to the Group Chief Executive (or
equivalent) and the division of responsibilities between the chair, chief
executive and senior independent director (on recommendation of the
Nominations Committee);
Approve the Group’s overall corporate governance arrangements
(delegated to the Nominations Committee).
Delegation to Committees
The Board may delegate authority for specified responsibilities to
Committees of the Board. The Terms of Reference for these Committees
will be approved by the Board. The duties of each Committee are contained
in the Terms of Reference. The Committees of the Board are:
a) Audit, Risk & Compliance Committee
b) Nominations Committee
c) Remuneration Committee
The Board has authority to establish additional Committees of the Board
from time to time.
Delegation to the Group Chief Executive Officer
The Group Chief Executive Officer (Group CEO) is granted full authority for
the day-to-day running of the business of the Company, including
authority to make changes to the management, approve agreements
(including novation, extension and/or variation of such agreements), and
to accept risks, rights and obligations on behalf of the Company (including
NDAs, Letters or Intent or exclusivity obligations), other than those
matters reserved to the Board and Shareholder for its decision and
subject to the limit of authority of up to £5,000,000 and any applicable
internal policies and processes.
The Group CEO is also authorised to sub-delegate such authority as he or
she sees fit, including the power to further sub-delegate, provided than
any such sub-delegation shall be within the limits of authority set out
above and evidenced in writing (see Spend Approval Limits Appendix).
23 Including: Spend Approval Limits, Authorised Signatories, Records of Spend Approvals and Authorised
Signatories, Approval of unlimited liabilities and indemnities and Delegated Authorities
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Matters Reserved to the Board
17. Composition and Governance
Membership
i. The minimum number of directors is two (Article 37), but there is no
maximum. Appointment and any change to the minimum number of
directors is subject to the appropriate Shareholder approval.
ii. Normally, terms of office will be three years for a maximum of two terms.
However, this is at the discretion of the Shareholder.
iii. The composition of the Board is at the discretion of the Shareholder. The
current composition of the Board is:
a) Non-Executive Chair;
b) One Senior Independent Non-Executive Director;
c) Three Non-Executive Directors;
d) One Shareholder representative; and
e) Two Executive Directors, being the Group CEO and Group Chief
Financial Officer.’*
Secretary
18. The Group Company Secretary, or his or her nominee, shall not be a
member of the Board but shall act as Secretary to the Board and shall keep
minutes and records of each meeting, as required by the Companies Act
2006.
19. Minutes of each meeting will be circulated to the Chair for approval and
then to all members of the Board. Minutes will be formally approved and
signed at the next meeting.
Quorum
20. The quorum for the transaction of business at a Board meeting shall be
two directors (Article 59).
Meetings
21. The Board shall meet as often as required, and not less than once every
quarter. A separate Strategy session will be held at least one a year. The
Board may meet in person, by telephone or by other electronic means, so
long as each member can contribute to the business of the meeting
simultaneously (Article 64).
2* This includes any persons holding these positions in the interim.
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Matters Reserved to the Board
22.
23.
24.
25.
26.
Meetings may be convened by the Secretary to the Board, at the request
of the Chair, or any other director, at any time.
Notice of each meeting shall be given to all members of the Board and any
other person required to attend, at least 3 working days before each
meeting.
Other Group employees and/or external consultants may attend for part or
the whole of any Board meeting at the invitation of the Chair.
Resolutions may be made in writing? if signed by all directors entitled to
receive notice of the meeting (Article 63).
The Non-Executive Directors shall meet at least twice per year without the
executive directors being present.
ANNUAL REVIEW AND APPROVAL
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27. The Board will undertake an annual review of its performance and the
content of the Matters Reserved (subject to the Articles of Association).
The Board will approval any changes to these Matters Reserved pursuant
to the annual review or whenever so required.
Approved by: Date: Version: Effective from:
Post Office Limited Board February 2015 I 1.0 February 2015
[Post Office Limited Board 24/03/2020 2.0 01/04/2020]
28. Appendices
Spend Approval Limits
The Board has delegated to the Group CEO spend approval of up to £5,000,000
and the Group CEO recommends to the Board the following standard spend
approval limits subject to applicable internal policies and processes:7©
Job Title Spend Approval Limit
Group Chief Financial Officer (CFO) I £4,000,000
Group Executive Member £2,000,000
Direct Reports to Group Executive I £250,000
The Group CEO may sub-delegate up to his spend limit of £5,000,000 and
determine the conditions of that delegation. Such delegation must be provided
to the Group Company Secretary in writing.
25 This includes electronic circulation and signature.
26 OPEX spend may be approved in accordance with these levels. CAPEX spend requires prior approval from the
Project Review Board and/or Investment Committee. The spend is measured over the life of the contract or
project.
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The Group CFO and Group Executive member may delegate up to their
£4,000,000 and £2,000,000 spend approval limit respectively, on a permanent
or ad hoc basis, to their direct reports or below, provided such delegation is
provided to the Group Company Secretary in writing. For the avoid of doubt,
direct reports to Group Executive members automatically have a £250,000
delegation, unless the Group Executive member advises the Company
Secretariat otherwise.?”
Authorised Signatories & Company Seal Authority
The following positions are approved to sign documents that will bind the
Company such as, but not limited to, contracts, statements of work, change
notes, order forms and terms & conditions.’® Signature is subject to
applicable internal policies, processes and documented exceptions:
- Any Statutory Director;
- The Group Company Secretary;
- Any member of the Group Executive; and
- Any Senior Assistant Company Secretary.
The following positions are permitted to sign employment contracts or
similar HR related agreements (for the purpose as specified only) as set out
below:
Job Title Purpose
Employment Recruitment, Leavers & New Joiners’ Contracts
MI Manager
Payroll Manager Contract Changes
Agents On-boarding Team Agents’ contracts
The following positions are permitted to sign franchise agreements as part
of the DMB programme:
Job Title
Head of DMB Programme
Director of Network Development
Any one of the following positions is approved to authenticate the affixing
of the Company Seal pursuant to Article 78 (C):
- A Statutory Director;
- Group General Counsel;
- Group Company Secretary; or
- Senior Assistant Company Secretary.
2” This does not apply to Personal, Executive Assistants or Team Supports who report directly to a Group
Executive member.
28 The Board authorised the Company Secretariat to keep a list of authorised signatories in its meeting on 22
January 2016 (see minute reference 69 of 2016).
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Matters Reserved to the Board
Records of Spend Approvals and Signatories
The Group Company Secretary is authorised to keep a list of individuals who
hold authority to approve spend, are authorised signatories and may
authenticate the Company Seal from time to time. Any changes in persons
appointed the relevant positions must be notified to the Group Company
Secretary in writing.
Liabilities and Indemnities?®
Certain contracts may include unlimited liabilities and/or indemnities. If this
is the case, the following rules shall apply:
i. If the unlimited liability/indemnity is for one of the following “standard
liabilities”, no additional approval is required and approval is required
under the spend approval limits;
a. Categories of loss that cannot be limited by law:
« death
* personal injury
° fraud
« fraudulent misrepresentation
b. Categories of loss which reflect industry practice:
« breach of third party intellectual property rights (IPR);
« breach of Confidentiality;
« breach of Data Protection; and
« breach of applicable law.
If the liability/indemnity is not a “standard liability” (as listed above), and
is unlimited or is above the Group Chief Executive’s spend approval limit,
additional approval will be required from the Group Chief Financial Officer
and Group General Counsel.
There are certain matters where there is a risk of loss or liability or a
wider risk which should be escalated to the Board (and, in some
instances, Shareholder):°°
* a granting of a security in excess of £5m;7"
* a new area of business which might bring the Group within the
scope of oversight of a regulator to which it has not previously
been subject;??
* a matter which gives rise to risk in excess of £5m in maintaining
service commitment to customers in line with the Group’s social
purpose (for which the Group has an averse risk statement) ;>?
29 This approach was approved by the Board on 27 March 2018.
2° Please consult the matters reserved to the Shareholder consent in paragraph B above.
3! See also Article 8.1 (AA) & (X)
2 See also Article 8.1(Z)
35 Subject to Article 8.1(X)
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yvernance report to Board (including the new Articles of Association
Post Office Limited
Matters Reserved to the Board
a matter which could risk disruption to the credit facility (averse
risk appetite - the Company is to ensure loan remains below
£950m with maintenance of £200m headroom);** or
a matter where there is realistic possibility of Competition and
Markets Authority intervention.>>
3* Refer also to the Treasury Policy and Article 8.1(AA)
35 See also Article 8.1(Z)
PUBLIC
12
GE Monthly
POL00448720
POL00448720
key BBEIS: Department of Business, Eneray & Industrial Strategy
Post Office Limited (POL) 2222: Final authorisation ofa decision as worded under the Articles of Association and FO. ‘The Group/Group Companies: Post Office Limited (POL), Post Office Management Services Limited (Post Office
ay it ‘Approve for recommendation: Authorisation to permit the request to be considered at the next governance stage. Insurance (POI) and Payzone Bill Payments Limited (PEBPL)
(“the Company”) ‘Consent; Permission Is granted to proceed wih a decision authorised by the Company as worded under the Subsidiary: A wholly owned company of Post Office Limited: Past office Insurance and Payzone Bill Payments Limited
Delegated Authorities ‘Articles of Association and FD. ED: Framework Document between BEIS (Shareholder), UKGI (Shareholder Representative) & POL
A shareholder consent: The authorisation is only valid once consenthas been received from the Article: Refers to Articles of Association of the Company as effective from 1/4/2020. These should be consulted for
Shareholder as required under the Articles ofAssociation and FO. farther information prior to proceeding.
Action Required
FOL Brecutive Commons Soard Committee
i fe fe 5
4 Fy Group 535 Fy 83
Hi j : executive ; i i FP I oceowe IS I set
r gs g8= gst
Pane say & Management
POL Board must develop
{a Group Strategic Plan
(GSP) covering a period
(uonetoossy Jo sefonsy mau auy Bulpnjoul) pseog 0} Yodes eoUEWIEAC g geL
1.1 Adoption of, or material variation to, the Group Strategic Plan (every - vove for of at least three years,
three years) (Acie 8.1 (U), Article 46, FD section 4) . . - I recommendatonte I = . : recammendation I Approve I bythe Sharenoer PO.
{the adoption of a Group Strategic Plan or any material variation or POL Bos to Shareholder Section 4).
° amendment of a Group Strategic Plan previously adopted] Fhe GS? Must be
m reviewed annually by the
=z POL Board (FD section
3s 6).
2 POL Board and
Ea Shareholder must
= _—_I1.2. Adoption of, or variation to, the Group Business Plan (every 12 . . . Be . . eT er I ppeove I ebprove nid
= months) (FO section 4) to POL Board to Shareholder Prone which feed into the
a [Group Business Pian.
& 13 Substantial alteration to the nature of the business of the Company
e unless as specified in the Group Strategic Plan (Article 8.1 (V)); FD Bbocove tor Approve subject
= section 3.3 (vi)) : - : recommendation . : : to Shareholder
= [Save as specifically provided for in the approved Group Strategic iG pol eae sharehok Consent
= Plan, any substantial alteration in the nature of the business carried
Fy fon by any Group company]
$ 1.4 Approval of the Funding Agreement with Government and Approve for
x monitoring of the achievement of milestones contained within the : : recommendation : : : Approve
8 plan [existing Matter Reserved] TOPOL Boars
2 POL Board is required to
= provide quarterly reports
S —_I1.5. Approvat of the criteria for measurement of performance (Key Approve for tothe shareholder on
2 Performance Indicators) and management, including annul review : : : recommendation : . : Approve the targets and budgets
S of such criteria [Existing Matters Reserved] ‘to POL Board Sekout im the GSP and
branch network (FO
Section 13)
1.6 Approval of succession plans for directors of Group Companies . 2 . . . Approve .
(Existing Matters Reserved)
Where an Article had
2.1. ‘The alteration or deletion of, oF the ratification of any breach of, al . . I eet I. ‘roharcnolcr I SI SNetis be vases through
or any part of the Articles; (Article 8.1 A (H)) rrmendatio sharehol should be ralsed through
2.2 Voluntary winding up or entry into administration of any Group
Company (Article 8.1 (I))
[The voluntary winding-up or entry into administration of am . . . Approve for . . . Approve subject
ion o-uP y M recommendation to Shareholder Consent
member of the Group, the passing of a special resohiton tothe comment areal
effect that any member of the Group should be wound -up by the
court or put into administration, the presentation (whether solely oF
ELL JO 6
ELL 50 6
O/LL-0Z0Z YOHEW 11 - SuReey AjyUOW 39,
02/
key
imi ‘Approve: Final authorisation of a decision as worded under the Articles of Association and FD.
Post Office Limited (POL) jovove for recommendation; Authorisation to permit the request to be considered atthe next governance stage
(“the Company”)
Delegated Authorities
‘Consent:
‘Articles of Association and FD.
Permission is granted to proceed with a decision authorised by the Company as worded under the
As shareholder consent The authorisation is only valid once consenthas been received from the
Shareholder as required under the Articles ofAssociation and FD.
EIS: Department of Business, Energy & Industrial Strategy
‘The Group/Group Companies: Post Office Limited (POL), Post Office Management Services Limited (Post Office
Insurance (POI)) and Payzone Bill Payments Limited (PZBPL).
‘Subsidiary:
ary: A wholly owned company of Post Office Limited: Post office Insurance and Payzone Bill Payments Limited
POL00448720
POL00448720
ED: Framework Document between BEIS (Shareholder), UKGI (Shareholder Representative) & POL
‘Article: Refers to Articles of Association of the Company as effective from 1/4/2020. These should be consulted for
further information prior to proceeding
Action Required
(uonetoossy Jo sefonsy mau auy Bulpnjoul) pseog 0} Yodes eoUEWIEAC g geL
POL Executive Committees Board Committee
be iz cour 223 iy Shareholder
E -xecut ge
£8 HA Executive Hee g2 POL Board (BEIS) Notes
2 & 2 é
jointly with any over person) of a petition for the winding “up oF any
member of the Group, oF any proposal for any of the foregoing}
23 Redemption or purchase of the Company's own shares or reduction
in share capital (Article 8.1 ())
(The redemption or purchase by any member of the Group of any
share in itself or the reduction of the share capital of any member of ‘Approve for ‘Approve subject
the Group, or any uncalled or unpaid liability In respect thereof, - - recommendation to I - - toShareholder I Consent
P P y i POL Board ‘consent
capital redemption reserve oF share premium account of any
member of the Group or the passing of any resolution authorising
any of the foregoing) (Article 8.1 (3))
ZA Set up of a new subsidiary Company oF any action relating to shares
in an existing Group Company or associated undertaking ' (Article
8.1 (K) & (L)) [the formation of any subsidiary undertaking or the
issue, allotment, purchase, cancellation or transfer of shares, or
granting of any share rights, in any member of the Group / The sale . . . Approve for . . . ‘Approve subject
issue, allotment, purchase, cancellation or transfer of any shares by Spee cee ‘consent Consent
any member of the Group In any subsidiary undertaking or in FRES
Limited (while an associated undertaking of a member of the Group)
or in any other associated undertaking of a member of the Group]
ZB The amalgamation or merger of any member of the Group with an
be ihe v id v Approve for Approve subject:
other company or business undertaking (Article 8.1 (M)); : : - Pecommendation - : : to'Shareholder I Consent
te POL Board ‘consent
Zs The creation or granting of any encumbrance relating to the
Company's business, undertaking, assets or Shares unless arising in
the ordinary course of business? (Article 8.1 (N))
[The creation or granting of any encumbrance over the whole or any
part of the company’s business, undertaking oF assets or over any
* Approve for Approve subject
Shares in the company or the entry into any agreement to do so, or . . . reckP rove for . . . npprove subject fo
the same in respect of any member of the Group (other than, in te POL Board ‘consent
each case, the creation or grant of any lien arising in the ordinary
course of business and/or any charge arising by the operation (or
purported operation) of title retention clauses and in the ordinary
course of business]
“An associated undertaking is defined an entity over which a company has significant influence but cannot exercise control (prsuant to International Accounting Standard 28) and normally demonstrated by 2050% shares held. A subsidiary undertaking is defired as (a)
holds @ majority of the voting rights init, (b) or is a member of it and has the right to appoint or remove a majority of it board of directors, or (c) is a member of it and controls alone, pursuant to an agreement with other members, a majorjtof the voting rights in it
(5.1159 Companies Act 2006),
*This is a factual analysis that must be conducted on a caseby-case basis.
POL00448720
POL00448720
4
B
Key BEIS: Department of Business, Energy & Industrial Strategy &
Post Office Limited (POL) 4222¥2i Final authorisation ofa decision as worded under the Articles of Associaton and FO. ‘The Group/Group Companies: Post Office Limited (POL), Post Office Management Services Limited (Post Office ©
ay it ‘Approve for recommendation: Authorisation to permit the request to be considered at the next governance stage. Insurance (POI) and Payzone Bill Payments Limited (PEBPL) °
(“the Company”) ‘Consent: Permission is granted to proceed wih @ decision authorised by the Company as worded under the ‘Subsidiary: A wholly owned company of Post Office Limited: Post office Insurance and Payzone Bill Payments Limited ©
Delegated Authorities ‘ticles of Association and FD. FD: Framework Document between BEIS (Shareholder), UKGI (Shareholder Representative) & POL Fs
‘Approve subject to Shareholder consent The authorisation is only valid once consenthas been received from the Article: Refers to Articles of Association of the Company as effective from 1/4/2020. These should be consulted for 3
Shareholder as required under the Artices ofAssociation and FO. farther information prior to proceeding. z
7 7 8
Action Required 3
POL Executive Committees Board Committee 3
H #3 fe § } a
ge 22 croup gig g g Shareholder i
i < EE
53 gE Executive He iH ge POL Board (BEIS) Notes 2
gs ge ee 282 8
z8 ss= §8o a
i ‘ 2 é S
2.7 The restracture or reorganisation of the Group structure such that any hoover os ea Fa
prove for prove subject =
Group company’s shareholding in its subsidiary undertakings is . - - recommendation - - . toshareholder I Consent 6
altered or amended (Article 8.1 (P)) to POL Board consent 2
a
ZB The actual or proposed presentation of @ petition to appoint an 5
administrator for any company in the Group (including POL) (Article s
° 8.1(Q)) Approve for Approve subject a
is} [The presentation, or proposal for presentation, (whether solely or - - - recommendation to} - - toshareholder I Consent 2
z jointly with any other person) of a pettion applying for the POL Board consent =
S appointment of an administrator of any member of the Group] Ea
2 ®
= [25° Any action in relation to the Post Office Trade Mark which prevents &
= the Group using the Trade Mark, including sale, assignment, 2
3 charging, mortgaging, granting of licence or disposal (Article 8.1 >
= @) 8
a [(i) the sale, assignment, charging, mortgaging or outright disposal 2.
' by any member of the Group of any Trade Mark in any of the g
= Primary Territories, (ji) the granting of an exclusive licence by any s
=z member of the Group which prevents the Group from using any Approve for ‘Approve subject ~
s ‘Trade Mark in any of the Primary Territories, (i) the taking of any - > - yecommendation to I - - to Shareholder I Consent
> action by any member of the Group with the intention of POL Board consent
x jeopardising any Trade Mark in any of the Primary Territories, (iv)
8 the taking of any action by any member of the Group whi ch has the
2 effect of causing any Trade Mark in any of the Primary Territories to
= cease to subsist, or (v) the taking of any decision or action by any
S member of the Group which has the effect of allowing rights in
S respect of any Trade Mark in any of the Primary Territories to lapse]
8
2.10 Change of the Company Name, trading name or Registered office Approve for
for any member of the Group. : - - recommendation to - - : ‘Approve
POL Board
3.1. Declaration or payment of any dividend or other distribution outside Within the Group
of the Group Strategic Plan by any member of the Group (Article 8.1 Strategic Plan, POL
m Approve for ‘Approve subject Board must approve the
[The declaration or payment of any dividend or the making of any . . - oc . . ten I Semen oe yinent ofan
distribution by the company other than in accordance with the inten dividend (articles
Group Strategic Plan] 68 - 69).
iny distribution, payment or return to shareholders of the Company Approve for Approve subject
3.2. Any distribution, payment turn to shareholders of the Company - . - recommendation to - - - to Shareholder Consent
‘out of capital of the company (Article 8.1 (G)) ro nate share!
3.3 Any distribution, payment or return to shareholders of the Company Approve for Sebalteny Company wil
ut of capita ofthe company by @ Subsidiary [Subsidiary Company : - - recommendation to I = : Consent sporove subect to
Articles] POL Board conse
ELL JO 96
POL00448720
POL00448720
g a
g B
° Key BEIS: Department of Business, Energy & Industrial Strategy oS
m Post Office Limited (POL) 0s: Fia! authorisation of» decision as worded under the Articles of Associaton and FD. tage, T= Staun/Group Companies: Post Ofce Limited (POL), Post Office Management Services Limited (Post Office ©
= sa it Prove for recommendation: Authorisation to permit the request to be considered at the next governance stage, Insurance (POI)) and Payzone bill Payments Limited (PZ8PL). °
3 (“the Company”) ‘Consent: Permission is granted to proceed wih a decision authorised by the Company as worded under the ‘Subsidiary: A wholly owned company of Post Office Limited: Post office Insurance and Payzone Bill Payments Limited ©
Delegated Authorities ‘Articles of Association and FD. ED: Framework Document between BEIS (Shareholder), UKGI (Shareholder Representative) & POL ry
Approve subject to Shareholder consent: The authorisation is only valid once consenthas been received from the Article: Refers to Articles of Association of the Company as effective from 1/4/2020. These should be consulted for
Shareholder as required under the Artices ofAssociation and FO. farther information prior to proceeding. z
7 7 8
Action Required 3
POL Executive Committees Board Committee 3
i tg fe § } a
ge fz ere. gig g g Shareholder i
i < EE
a 4 Executive BE E Ha POL Board (BEIS) Notes ge
He 33 HS zge 8
TF Change W accounting TeFeTEnce date, prAGIGE OF Paley By Shy 2
member of the Group, if different from those previously adopted by 5
the Group, unless required by law or generally accepted accounting 5
principles (Article 8.1 (R)) c
[The adoption of any accounting reference date or any material Where changes are Fa
: Approve required by law or
variation of the accounting practices and policies to be applied in the Avprove for prove, Approve subject Ser een 3
° preparation of the accounts of any member of the Group, if different - - recommendat! : Shareholde - . toshareholder I Consent I counting principles, g
m from the practices or policies then adopted or applied by other onto Yeonsent consent the POL ARC approve 5
Fs members of the Group (other than any accounting practice or policy these changes. a
$ required to be adopted by law or required by generally accepted 2
z accounting principles applying in the place of incorporation of the 8
= company or the relevant member of the Group] Ey
FE >
g Taprave The POL Baad may Fs
= 3.4 Approval of the Annual Report and Accounts, including any corporate for delegate authority on an IS
2 governance statement and any specific reports required by law - - - . recommen : : Approve : ‘ad hoe basis to 8
: (Existing matter reserved) dation to individuals to finalise or I
= POL Board committee to approve. I 5
= ‘Approve The POL Board may 8
= [3.5 Approval of any half year financial report or trading statement for for delegate authority on an
D - - : : recommen : : ‘Approve : ‘3d hoe basis to
s Publication [Existing matter reserved) ‘scommer ad oe basis to
$ POL Board committee to approve.
8 3.6 Approval of Group treasury and banking policies, including methods ‘Approve for
8 of mitigating against foreign currency exposure and any use of g . recommendati - Approve : : : :
2 financial derivatives (Existing matter reserved} fn to POL ARC
S —_I3.7 Approval ofthe appointment, reappointment or removal of the . . " . soprve . .
gS external auditor [Existing matter reserved]
8
Toprove "The POL ARC will review
Approve for for and mentor the Group's
3.8 Approval of Company's risk appetite statement - i recommensat - recommen - - Anprove - fsk management
‘onto POLAR dation to systems, operat
POL Board controls and key
4.1. Making of a loan, granting of credit or giving of a guarantee oF Refer to the Treasury
indemnity by the Group, apart from intra-group arrangements Policy for authorities in
entered into in the ordinary course of business? (Article 8.1 (0)) relation to intra-group
[save for any intra-group arrangements entered into between wholly loans.
owned members of the Group in the ordinary course of Business bY . . . oc I . . oprove subject
any Group Company, the making of any loan (otherwise than by POL Board to shareholder I Consent
way of deposit with @ bank or other institution the normal business consent
of which includes the acceptance of deposits or in the ordinary
course of business), the granting of any credit (other than in the
normal course of business) or the giving of any guarantee or
This will be a factually based decisionand taken on a case by case basis.
POL00448720
POL00448720
4
B
Key BEIS: Department of Business, Energy & Industrial Strategy o
Post Office Limited (POL) 22220: Final authorisation ofa decision as worded under the Articles of Assocation and FO. The Group/Group Companies: Post Office Limited (POL), Post Office Management Services Limited (Post Office ©
ay it ‘Approve for recommendation: Authorisation to permit the request to be considered at the next governance stage. Insurance (POI) and Payzone Bill Payments Limited (PEBPL) °
(“the Company”) ‘Consent: Permission is granted to proceed wit a decision authorised by the Company as worded under the ‘Subsidiary: A wholly owned company of Post Office Limited: Post office Insurance and Payzone Bill Payments Limited ©.
Delegated Authorities ‘Articles of Association and FD. ED: Framework Document between BEIS (Shareholder), UKGI (Shareholder Representative) & POL ry
As ct to Shareholder consent The authorisation is only valid once consenthas been received from the ticle: Refers to Articles of Association of the Company as effective from 1/4/2020. These should be consulted for
Shareholder as required under the Artices ofAssociation and FO. farther information prior to proceeding. z
7 7 8
Action Required 3
POL Executive Committees Board Committee 3
H fg fe iy =
ge FF group gig g g Shareholder 5
§ xecutive gE
53 gE Executive He iH ge POL Board (BEIS) Notes 2
gs ge ee 282 8
z8 ss= §8o a
by any Group company] 5
a
4.2 The establishment of (or approval of any agreement to establish) a eo ra Anprove for I approve subject 5
new pension scheme by any member of the Group (Article 8.1 (T)) - - - POL Remuneration - . recommendation I to shareholder consent 2
° Committee consent 3
2 ‘Any proposal should I =
a be reviewed to check I >
= whether Shareholder I >
$ consent is required Ea
a because of instances &
< each elements of an I
z individuat's >
[43 Approval of the Group pension strategy and any material changes to Approve for hoprovet 's whasto I >
8 \pprove for remuneration hasto I
@ pension arrangements for the Group, in. particular the rate of - . ‘ recommendation to I . eee ton I Approve . ee tne g
2 contribution made [Existing matters reserved} 1 RemuneteS to POL Board Shareholder and to 8
: check that the a
+ approach taken would I 5
= not run contrary to 3
= public sector pay
g guidance which is
3 deemed to apply to
© POL.
S__ [a Entry into @ Relevant Transaction? whereby any Group Companys
8 interest in an asset is lost meaning it can no longer perform the tr the Company is sti
i business of the Company as per the Group Strategic Plan (Article 8.1 siete oeuatvely use
= )) the asset forthe
5 [The entry into any Relevant Transaction under which any member remainder ofits useful
of the Group, directly or indirectly, ceases to own or retain any such ‘economic life,
interest as it’ may have in any asset in the absence of which the . . . Approve for . . . Approve subject Shareholder (POL)
Group might reasonably be considered to be unable to continue to recommendation to to Shareholder Consent I approval and Parent
perform the business of te Group as provided for Inthe Group POL Board consent Shareholder (BIS)
Strategic Plan, except in circumstances under which the relevant consent i not required.
asset remains available for exclusive use by any one or more Fenech mack be
members of the Group for the remainder of its useful economic life approved by the Board
or until itis fully depreciated; ]
5 The entry into or implementation of @ Relevant Transaction by any
member of the Group involving actual or likely spend or liability in
excess of £50,000,000° (Article 8.1 (X)) - - . Approve for . . . ‘Approve subject
(The entry into or implementation of @ Relevant Transaction by any recommendation to to Shareholder Consent
member of the Group which involves or is likely to involve (either POL Board consent
individually or when taken together with all other related Relevant
« Relevant Transaction is any transaction which Is not (i) In the ordinary course of business, (il) intragroup; or (li) approved in the Group Strategic Plan (Article 2).
» As previously defined
® See appendix to the Matters Reserved to the Board for approvals required for unlimited liablitiesand indemnities. There will be instanceswhere there is a risk of lass or liability or a wider risk, such as reputational risk, which should be escalated to the Board(and, in some
Instances, the Shareholder, for example where a proposal could be deemed tobe "novel or contentious"). These Instances may also come under the matters requiring Shareholder consent.
8
2,
x
3
POL00448720
POL00448720
2 Fl
B
° Key BEIS: Department of Business, Energy & Industrial Strategy oS
g Post Office Limited (POL) S22:2vei Fin! authorisation ofa decision 9s worded under the Articles of Association and FD. tage, T= Staun/Group Companies: Post Ofce Limited (POL), Post Office Management Services Limited (Post Office ©
3 the i (pprove for recommendation: Authorisation to permit the request to be considered at the next governance stage, Insurance (POD) and Payzone Bll Payments Limited (PEBPL) fo)
a (“the Company”) ‘Consent: Permission is granted to proceed with @ decision authorised by the Company as worded under the ‘Subsidiary: A wholly owned company of Post Office Limited: Post office Insurance and Payzone Bill Payments Limited
Delegated Authorities ‘ticles of Association and FD. FD: Framework Document between BEIS (Shareholder), UKGI (Shareholder Representative) & POL Fs
A ct to Shareholder consent The authorisation is only valid once consenthas been received from the ticle: Refers to Articles of Association of the Company as effective from 1/4/2020. These should be consulted for
Shareholder as required under the Artices ofAssociation and FO. farther information prior to proceeding. z
7 7 8
Action Required 3
POL Executive Committees Board Committee 3
H tg ee Hi } a
ge 22 croup 228 i g Shareholder 5
E xecutive $e
53 gE Executive He iH ge POL Board (BEIS) Notes 2
Hi ™ z a Ss
previously approved under this article Error! Reference source A
not found.4.5 entered into or implemented in the previous 12 5
months)) the incurrence of a commitment or lability, or the e
payment of a sum, by any member of the Group which Is an amount z
in excess of £50,000,000} 3
o 3
fi [HB The entry by any member of the Group into any Relevant 2
z ‘Transaction which is not on commercial terms and is not considered Fetter to ‘Approve subject 4
8 by the directors of the relevant member of the Group to be in the - - - POL Board R - - consent Consent S
= interests of that member of the Group (Article 8.1 (¥)) 8
= [#7 The borrowing of funds by any member of the Group For any TERETE]
e source other than another member of the Group (Article 8.1 (AA)) ap uctninses Pe Ie
2 (The incurring of (or entry into of any commitment to incur) any g
5 Approve for rove subject 8
é borrowing by ony member of the Group in circumstances where the : : : Re toorove fas, I. - - Aoprove subject I Consent 8
' borrowing is to be provided from any source other than another POL Board consent g
= ° S
= member of the Group] 2
= S
5 The Group CEO has
3 delegated authority to
$ approve OPEX spend
S up to £5m and may
$3 I 4.8. The entry into or implementation of a transaction (OPEX spend) by Worove for delegate below this
2 the Group involving actual or likely spend or liability” in excess of : 5 - fecommendetion to} - - - ‘Approve : tim.
= 5,000,000 (£2,000,000 for PZBPL) [Existing Matter Reserved) POL Board Each Subsidiary has
S its own spend
approval limits. See
applicable Matters
Reserved to the
Board.
4.9. Approval of Change spend under £2,000,000 for the Group*
{Existing delegated authority from the Board to the Group CEO} ‘Approve : : : : : : :
4.10 Aaproval of Change spend over £2,000,000 but up t0 £5,000,000 —[—, Change spend over
for the Group® [Existing delegated authority from the Board to the I, Abpreve for ove . . . . . . . £2m for PZBPL will
approval.
” Non-standard unlimited liabilities and indernnities or those capped at £2m and above may be approved byGroup General Counsel and the Company's Chief Financial Officeras part of the Contract Approval Process. Standard liabilities and indemnities do not require
‘additional approvals or Board oversight. There are certain matters where there Is a risk of loss or liability or @ wider risk which should b escalated to the Shareholder. These instances may also come under the matters requiring Shareholderonsent. Please refer to the
Matters Reserved to the Board.
This Is defined Change spend refers to the CAPEX & Exceptional budget, which is managed by be Group Change team. It does not include OPEX spend or contract approvals, for which the appropriate spend approvals must be considard. If a project's forecast spend
exceeds £5m (total CAPEX, Exceptional and OPEX), POL Board approval is required.
As previously defined
POL00448720
POL00448720
“4
key BBEIS: Department of Business, Eneray & Industrial Strategy &
Post Office Limited (POL) 4222¥2i Final authorisation ofa decision as worded under the Articles of Associaton and FO. ‘The Group/Group Companies: Post Office Limited (POL), Post Office Management Services Limited (Post Office ©
°c it ‘Approve for recommendation; Authorisation to permit the request to be considered at the next governance stage. reumece (pO) aed Parsons Bil Payrments Livited (PZBPL) fe)
("the Company”) ‘Consent: Permission is granted to proceed wih @ decision euthorises by the Company as worded under the Subsidiary: A whlly owned company of Post Office Limited: Post office Insurance and Payzone sill Payments Limited
Delegated Authorities Aces of Association end FD, ED: Framework Document between BEIS (Shareholder), UKGI (Shareholder Representative) & POL 3
Al shareholder consent The authorisation is only valid once consenthas been received from the Article: Refers to Articles of Association of the Company as effective from 1/4/2020. These should be consulted for 3
Shorehoider as required under the Articles ofAssociation and FO. Fre information prior to proceeding, 2
7 7 8
Action Required 3
POL Executive Committees Board Committee 3
* 5 ES
Se gE Executive fee Hi POL Board (BEIS) Notes Hy
i . 2 é S
3
FS
4.11 Approval of Change spend over £5,000,000 for the Group'® dperowe for, I Approve fr . reechgerowe tor I . . prove . 5
‘on to IC ‘on to GE 1. Board e
3
3
o The interview panel
m makes a =
2 recommendation of >
= appointment at the end I =
J —_I5.1 Approval of the recruitment and appointment process for a director Approve for of the recruitment =
E of the Company including engagement terms of external search . . . . _ I recommendat- . . ppprove I processito the g
= agents for appointments and formation of interview panel (FD. on to the P Shareholder. 6
= Section 7.3 (i) ‘Shareholder ‘Appointment then ES
= requires approvals from I >>
8 POL Nominations ang I
ES Remuneration 8
a Committees and Board. I 8
, ‘Shareholder to be S
is informed nat less than IS
= ten Business Days before IS
= the proposed date of
s appointment of @
& I 5.2 Appointment, reappointment or removal from office of any director director including re
= including the chief executive, interim directors and alternate Approve for I Approve for I Approval subject ‘appointment (Article 28),
x including th pescutive, interim directors nate ea - : . : - I recammendati- I recommendat-on I “to Shareholder I Consent
8 rectors who are not slresdy directors of the Company (Article onto POL Board I ‘to POL Board consent The Shareholder shall
is (A) (0) & (il), (C), 40, 41, 53, FD section 7) appoint one senior UK
? Government offical as
= the representative
S ‘rector tothe POL Board
(FD section 7:3 (i).
8 The Shareholder shall
appoint the Chair of the
POL Board (FD section
7300)
5.3 Appointment, reappointment or remaval of any person as Chair of . 2 . . I aera I AMP OE cee TO I pprove I This appointment isa
the Company (Article 8.1 (A) (iii), 42 (A), FD section 7) nto POL Board I to POLBoard I to Shareholder ae pho tha roles act
Cade on Puc
Appointments
There could be
5.4 Any action taken by any the company or the Board (including any instances where for @
appointment, removal or re-designation) which would have the temporary period the
effect that the Board ceased to include directors appointed to the . . . . . reimProve fOr I Approve for I APRrove subject I I Board did not have
post of Chair, chief executive and finance director (or director s eT Beate I recommendation I *° Sharchal one of these
Carrying out the general functions denoted by such posts) (Article to POL Board postholders in post
8.14 (0) Where an interim role
of arrangement
"© As previously defined.
€A1 $0 OL
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POL00448720
POL00448720
(“the Company”) ‘Consent; Permission Is granted to proceed wih a decision authorised by the Company as worded under the Subsidiary: A wholly owned company of Post Office Limited: Past office Insurance and Payzone Bill Payments Limited
Delegated Authorities Articles of Association and FD. ED: Framework Document between BEIS (Shareholder), UKGI (Shareholder Representative) & POL
‘Approve subject to Shareholder consent The authorisation is only valid once consenthas been received from the tice: Refers to Articles of Assaciation of the Company as effective from 1/4/2020. These should be consulted for
Shareholder as required under the Articles ofAssociation and FD. further information prior to proceeding
OZ/EO/LL-OZOZ YEW I} - BuReey AUOW 3D
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7 7 8
Action Required 3
POL Executive Committees Board Committee 3
ee ibo] s Sroup 289 ig shareholder 5
ge Executive aE
£8 Ha 3 Executive Hee fee POL Board (BEIS) Notes 2
ge ge @ eee zee FA
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TequreaBoweama] 2
Shareholder approval. I =
'5.5 Approval or variation of director remuneration and/or terms and E
conditions of employment or engagement (Article 8.1 (E)) The Board delegates to I
{the approval of or agreement to or any material variation or Commitee the approval I
amendment to: (i) the remuneration (including, without limitation, Approve subject for recommendationto. I
salary, share options, bonuses, benefits in kind and pension rights) - - - d . - to Shareholder Consent I the Shareholder of 3
paid or granted to any director of the company; or (i) the terms and bucthis mont beittin IS
Conditions of employment or engagement of any of the directors of approved remuneration I
the company) policies 5
8
5.6 Appointment, reappointment, removal and remuneration © of e
executives reporting directly to the Group Chief Executive Officer , S
(Group Executive), other than executive directors [Existing duty . . ss : . poprove Approve . . BOL wil observe the a
within Remuneration and Nominations Committees Terms of Terms (FD Appendix 5). I
This incorporates the 6
establishment of any 3
profit-sharing, share
‘option, bonus or other
incentive schemes for
‘employees of any Group
Company.
‘The Group is required to
5.7 Approval of the Group Remuneration Policy [Existing duty with Approve for seek consent for actions
Remuneration Committee Terms of Reference} = . - - : - recommendation I Approve - relating to shares in
to POL Board Subsidiaries (Article 8.1
8)
POL will observe the
Public Sector Pay and
‘Terms (FD Appendix 5).
POL director
with in 5.5 and 5.9-
5.11 for subsidiaries
5.8 Approval of the introduction of any Tong and/or short term Incentive
scheme, the associated performance criteria and any awards made . . . . . . Approve . .
under such schemes (Existing Matters Reserved)
5.9 Approval of the recruitment and appointment process for a director
(who is not an employee of a member of the Group) to Subsidiary
including formation of interview panel. (Existing duty within : : : - : Approve . - -
Nominations Committee Terms of Reference]
Encompassing: salary, share options, bonuses including long-term and short-term incentive plans), benefits in kind and pension rights. Exit packages outside the Group policies and procedures will alsgequire approval.
© As defined above.
POL00448720
POL00448720
4
B
Key BEIS: Department of Business, Energy & Industrial Strategy o
Post Office Limited (POL) 2222: Final authorisation ofa decision as worded under the Articles of Association and FO. The Group/Group Companies: Post Office Limited (POL), Post Office Management Services Limited (Post Office ©
sa it ‘Approve for recommendation: Authorisation to permit the request to be considered at the next governance stage. Insurance (POI) and Payzone Bill Payments Limited (PEBPL) °
(“the Company”) ‘Consent: Permission is granted to proceed wit a decision authorised by the Company as worded under the ‘Subsidiary: A wholly owned company of Post Office Limited: Post office Insurance and Payzone Bill Payments Limited ©.
Delegated Authorities ‘Articles of Association and FD. ED: Framework Document between BEIS (Shareholder), UKGI (Shareholder Representative) & POL ry
As shareholder consent: The authorisation is only valid once consenthas been received from the Article: Refers to Articles of Association of the Company as effective from 1/4/2020. These should be consulted for
Shareholder as required under the Artices ofAssociation and FO. farther information prior to proceeding. z
7 7 8
Action Required 3
POL Executive Committees Board Committee 3
A § g
53 gE Executive Eee Ae POL Board (BEIS) Notes 2
Hi ™ z a Ss
7 2
5.10 Appointment and remuneration of any person who Is not an Statutory Director 3
employee of a member of the Group as a director of any Group Approve for Approve for Approve subject appointments to Post &
Company (unless that company is regulated by the FCA) (Article 8.1 : : - - : recommendatio I recommendation I to Shareholder Consent I Office Insurance donot I
‘nto POL Board I "to POL Board consent require Shareholder a
Ss) @) consent e
5.11 The additional remuneration of any employee (not including any Tader the subaary ®
salary arrangements for such employee) of a member of the Group Approve for I Approve for I Approve subject articles, directors are 2
a) in their capacky as a director of a Group Company (Article 8.4 - “ . - - I recommendatio I recommendation I ‘te'sharchoider I Consent I not ented to g
a (sie) ‘nto POL Board I” to POL Board consent remuneration for their
2 Seruces tothe Company I 2
3 as directors or for any I
$ ‘ther service which they I
I 5.12 appointment, reappointment, removal and remuneration of undertone nee I
= statutory directors of Subsidiary (where Shareholder Consent is not capacity a adirector, I 9.
> required, cf. 5.10 & 5.11 above) [Existing duty within Remuneration - - < = . Approve ‘Approve - - executive director. >
8 and Nominations Committees Terms of Reference} Directors are entitled to I 2
E expenses that are 8
a reasonably and property I ©
: incurred 2
+ I 513 Nomination for appointment, reappointment or removal of any s
statutory director who Is an employee of the Group to an associated This applies to First Rate I —
= Undertaking of the Group and the appointment, reappointment or . . . . . Approve . . . Hiriesatihetoads
g removal of the Shareholder Representative to an associated Holdings Limited
$ undertaking [Nominations Committee Terms of Reference]
x
‘The apparnted Seereta
{S__ I 5.13 Appointment and removal of a Secretary (Article 66) a : : - - - - Approve - shall be the Group
2 Company Secretar
=: [Se Appointment, reappointment or removal of the Group's principal Reprove Tr "
= rofessional advisors'® [Existing Matter Reserved - : : recommendation to I = Prove
S P (Existing 1 1 Boar:
gS
© Tet any change to the prescribed minimum number directors of the . . . . . reaerove for ‘Approve subject
company (Article 8.1. (B)) recommendatio sharehol Consent
The Group Conflicts oF
Interest Policy is
reviewed and
approved by the ARC
annually and directors
6.2 Authorisation of Conflicts of Interest for Board Directors (Article 54) : : : : : - : ‘Approve appointment letters
set out the
requirements for
advising/ receiving
approval for
additional external
appointments.
% As defined above.
1 As defined above.
°S This consists of advisors specifically mentioned in the Group Annual Report & Accounts including but not limited to, the Gropls solicitors, actuary and financial advisors,
ELL 40 ZOL
POL00448720
POL00448720
3 a
8 key EIS: Department of Business, Energy & Industrial Strategy &
2 Post Office Limited (POL) 222:222: inal authorisation of a decision as worded under the Articles of Association and FO. The Group/Group Companies: Post Office Limited (POL), Post Office Management Services Limited (Post Office ©
i ay it ‘Approve for recommendation: Authorisation to permit the request to be considered at the next governance stage. Insurance (POI) and Payzone Bill Payments Limited (PEBPL) fo)
= (“the Company”) ‘Consent; Permission Is granted to proceed wih a decision authorised by the Company as worded under the Subsidiary: A whlly owned company of Post Office Limited: Post office Insurance and Payzone sill Payments Limited
° Delegated Authorities Aneles of Association and FD. ED: Framework Document between BEIS (Shareholder), UKGI (Shareholder Representative) & POL. 3
shareholder consent: The authorisation is only valid once consenthas been received from the Article: Refers to Articles of Association of the Company as effective from 1/4/2020. These should be consulted for
$Shorehelder ss required under the Arles efAssoclotion and FD. farther information prior to proceeding. z
7 7 8
Action Required 3
POL Executive Committees Board Committee 3
ey Hi I « Sroup aig ig shareholder 5
ge Executive aE
Pa He 3 Executive fee eee Pou Board I "pers Notes 2
He 33 = HS zge 8
Hi ™ z a Ss
.3_Approval of the overall levels of insurance for the Group, including ‘Approve for a
directors’ and officers’ liability insurance and any arrangements for : : recommendati - Approve Approve 5
indemnity of directors [Existing Matters Reserved] ‘on to POL ARC &
Some pales maybe I
6.4 Adoption of Company policies related to business operation and/or Approve for Approve for approved by Board 3
strategic matters and identified within the approved policy framework . - recommendsti é recommen - - Anprove - Commitee: in z
as requiring Board level oversight [Existing Matter Reserved I fon to POL ARC pation 2 accordance wth the °
policy framewor 3
R ‘Approve for I ABPTOVETON I pporove for I Approve for ‘any changes are subject I =
TM I 6.5. Adoption of and changes to Matters Reserved to the Board (including a Fesmenend I _ APE PF y chang 7
2 recommendation to recommendatio I recommendation tothe Articles of >
z the appendices), Board Committee Terms of Reference and these - - - ommendat ation to I Tecommendatio Aiea ‘Approve . to the Articles 0 z
g Delegated Authorities [Existing Matter Reserved] jevant committee I POL804S I “wamca Ton). I {Remco TOR) Framework Document. I ©
g is uttee I (ARC TOR) 2
= [6 Approvatof the delegation to the Group Chief Executive and the ‘Roprove for &
= division of responsibilities between the chair, chief executive and the : : P : Fecommendatio : Approve . Ey
= senior independent director [Addition due to Code, best practice] ‘nto POL Board 2
& [@7 Process for the annual review of Board and Board Committee > ; - Approve > - > fa
= Effectiveness [Nominations Committee Terms of Reference] haa 8
2 The Board detegatesto I ©
: the Nominations a
+ Committee approval of a} 5
= number of elements of IS
= governance and
Fy Feviewing and
3 monitoring corporate
rove for
= I 6.8 Approval ofthe Group's overall corporate governance arrangements . ° . . «I <ABerave for . pporove . Governance
x (existing Matter Reserved} recornmendatio evelopment and
8 compliance but decisions
8 fon the constitutional
2 documents, including
= the Articles of
5 ‘esociation and Matters
Reserved to the Board
require Board approval.
POL00448720
POL00448720
w Articles of Association
nance report to Board (including the r
Post Office Limited
(“the Company”)
Terms of Reference of the Audit, Risk and Compliance Committee
The Audit, Risk and Compliance Committee (the “Committee”) is a Committee of
the Post Office Limited Board (“the Board”) from which it derives its authority and
to which it reports after each meeting. Its authority is always subject to the powers
and duties of the Board, as set out in the Articles of Association.
A. PURPOSE
1. The purpose of the Committee is to assist the Board of Directors in fulfilling
its fiduciary responsibilities by:
i. Contributing an independent view on the accounting, financial control
and financial reporting practices of the Group’;
ii. Taking all reasonable steps to ensure accurate and informative
corporate financial reporting and disclosures which meet appropriate
accounting and corporate governance standards; and
iii. Providing oversight of the Group’s risk management systems,
operational controls and key systems, including monitoring
exposures to the Group Risk Appetite.
B. DUTIES AND RESPONSIBILITIES
Financial Reporting
The Committee shall:
2. Monitor the integrity of the financial statements of the Company, including
its annual report and half yearly reports and any other formal statements
relating to its financial performance, and review and report to the board on
significant financial reporting issues and judgements which those statements
contain having regard to matters communicated to it by the auditor.
3. Review and approve for recommendation to the Board the Annual
Report and Accounts, including but not limited to:
i. Reports of the External Auditor;
ii. any proposed changes in presentation of the financial statements or
accompanying notes which the auditors may recommend; and
iii. the Management letter.
4. Review and approve for recommendation to the Board the half year
financial report or trading statement for publication?.
diary undertakings: Post Office Management Services
Limited
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Post Office Limited
Terms of Reference of the Audit, Risk and Compliance Committee
5.
10.
11.
Review and report to the Board on significant financial reporting issues,
including, but not limited to:
i. the consistency of, and any changes to, significant accounting policies
both on a year on year basis and across the Company/Group;
ii, the methods used to account for significant or unusual transactions
where different approaches are possible;
iii. whether the Company has followed appropriate accounting standards
and made appropriate estimates and judgements, taking into account
the views of the External Auditor;
iv. the clarity and completeness of disclosure in the Company’s financial
reports and the context in which statements are made;
v. all material information presented with the financial statements, such as
the business review and the corporate governance statements relating
to the audit and to risk management; and
vi. an overview of the extent to which the Annual Report and Accounts are
fair balanced and provide the information necessary to the Shareholder?
to assess the Company’s performance, business model and strategy.
Report to the Board where the Committee is not satisfied with any aspects
of the proposed financial reporting by the Company;
Approve the Group Treasury and banking policies, including methods of
mitigating against foreign currency exposure and any use of financial
derivatives.
Approve for recommendation to the Shareholder any changes to the
accounting reference date, practice or policy by any Group Company, if
different from those previously adopted by the Group, unless required by law
or generally accepted accounting principles.
Approve any changes to accounting policies required by law or generally
accepted accounting policies.
Internal Controls and Risk Management Systems
The Committee shall:
Along with the external and internal auditors, monitor the adequacy and
effectiveness of the Company’s internal financial controls and other internal
control and risk management systems.
Review recommendations for the improvement of the Company’s internal
controls, processes and systems.
The Department for Business, Energy and Industrial Strategy
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Tab 8 Governance report to Board (including the new Articles of Association)
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Terms of Reference of the Audit, Risk and Compliance Committee
12.
13.
14.
15.
16.
17.
18.
19.
20.
21.
22.
Pu
Review and approve the statements to be included in the Annual Report
concerning internal controls and risk management.
Review the overall risk management framework and strategy in place for
the Group including its risk appetites and tolerance.
Review the Company’s overall risk position and periodically invite
management to outline risk management strategy and status within their
specific business units.
Review management’s assessment of the degree of risk the Company
prudently incurs in achieving a reasonable balance between the cost of
managing risk and control systems and the benefits derived.
Review areas of specific risk as highlighted by management, including
enterprise and business risk.*
Monitor the Risk and Compliance Committee activities and receive summary
reports as appropriate.
Review legal, regulatory and any other matters that may have a material
impact on the financial statements, related Group compliance policies, and
programmes and reports prepared to manage and monitor Group compliance
policies.
Review whether any remuneration policy adopted by either the Company or
its subsidiaries, or the implementation of any such policy is consistent with
the risk appetite particularly in relation to conduct risk.
Monitor the impact of any new legislative, regulatory, market or other
developments which could materially or adversely affect the Group.
Receive reports on specific breaches and incidents and review management
plans for resolution. The Committee will also review management plans for
root cause analysis resulting from breaches and issues.
Approve the overall levels of insurance for the Group, including directors’
and officers’ liability insurance and any arrangements for indemnity of
directors.
Compliance, Whistleblowing and Fraud
The Committee shall:
iis includes, but is not lim
ted to the financ
hange Serv
bi
Idings Limit
e Company's
BLIC 3
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107 of 173
Post Office Limited
Terms of Reference of the Audit, Risk and Compliance Committee
23.
24.
25.
26.
27.
28.
29.
30.
31.
32.
33.
The r
eth
equir
esources to
Modern
Review with the internal auditors and the external auditors the results of
any review of the compliance with the Company’s codes of ethical conduct
and similar policies including whistleblowing>.
Review at least annually the adequacy and security of the Company’s
arrangements for its employees and contractors to raise concerns, in
confidence, about possible wrongdoing in financial reporting, regulatory
breaches or other matters. The Committee shall determine that these
arrangements allow proportionate and independent investigation of such
matters and appropriate follow up action
Review the Group’s procedures for detecting fraud and the systems and
controls for prevention of bribery and any non-compliance.
Review any summary of frauds, thefts and other irregularities of any size.
Review the regular reports from the Money Laundering Officer and monitor
he adequacy and effectiveness of the Group’s anti-money laundering systems
and controls.
Review regular reports from the Director of Compliance and monitor
adequacy and effectiveness of the Group’s compliance function.
Review late statutory filings and the circumstances around such lateness.
Internal Audit
The Committee shall:
Approve the appointment or termination of appointment of the Head of
Internal Audit.
Approve the Internal Audit Charter every two years®.
Review and approve the annual Internal Audit Plans, including any
changes to these plans, to ensure they are aligned to the key risks of the
business and review reports on work carried out. The review should include
methods employed by the internal auditors to assess risk and to prioritise
the various audit proposals identified in the annual plan.
Ensure internal audit has unrestricted scope, the necessary resources and
access to information to fulfil its mandate.
urp% c
d in the of i it t ient
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nance report to Board (including the r
w Articles of Association
Post Office Limited
Terms of Reference of the Audit, Risk and Compliance Committee
34.
35.
36.
37.
38.
39.
40.
41.
42.
Ensure the Internal Auditor’ has direct access to the Board Chair and to
the Committee Chair, and is accountable to the Committee.
Monitor and review annually the effectiveness of the internal audit
function in the context of the Group’s overall risk management system and
the work of compliance, finance and the external auditor and as part of this
assessment:
i. Meet with the Head of Internal Audit without the presence of
management
ii. Review the annual internal audit plan work and results
iii. Determine whether it is satisfied that the quality, experience and
expertise of internal audit is appropriate for the business
iv. Review actions taken by management to implement the
recommendations of internal audit and to support the effective working
of the function.
Ensure the independence of the internal auditor including an annual review
of any non-audit services provided by internal audit.
Determine whether an independent, third party review of processes is
appropriate.
External Audit
The Committee shall:
Approve for recommendation to the Board the appointment,
reappointment or removal of the independent external auditors, the
proposed fees (in consultation with management) and the acceptance of
the scope and general extent of the engagement.
Review and approve the selection procedure for the appointment of the
audit firm in accordance with applicable regulatory requirements, ensuring
that all tendering firms have access to all necessary information and
individuals during the tendering process.
If an Auditor resigns, review the issues leading to this and determine
whether any action is required.
Review and approve the agreed annual external audit plans and approach
to risk assessment and the scope and plan of their audits.
Review the findings of the audit with the external auditor. This shall include
discussing any major issues which arose during the audit including (but not
limited to) key accounting and audit judgement and the levels of error
identified.
clude the He:
Internal A
heir representative) ai
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nance report to Board (including the r
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Post Office Limited
Terms of Reference of the Audit, Risk and Compliance Committee
43. Review any representation letter(s) requested by the External Auditor
before they are signed by management.
44. Review the management letter and management's response to the
auditor's findings and recommendations.
45. Monitor and review annually the independence of the external auditors
including level of fees paid, an annual review of any non-audit services
provided by the external auditors and auditor’s processes for maintaining
independence.
46. Approve the Group's policy on non-audit services by the auditor.
47. Meet regularly with the external auditor (including once at the planning
stage before the audit and once after the audit at the reporting stage) and,
at least once a year, meet the external auditor without management being
present, to discuss the auditor’s remit and any issues arising from the audit.
48. Review annually the qualifications, expertise and resources of the external
auditor and the effectiveness of the audit process, which shall include a
report from the external auditor on their own internal quality procedures,
an assessment of the quality of the audit, handling of key judgement by the
auditor and the auditor’s response to questions from the Committee.
49. Ensure co-ordination of the external audit with the activities of the internal
audit function.
c. REPORTING RESPONSIBILITIES
50. The Chair shall report formally to the Board on its proceedings after each
meeting on all matters within its duties and responsibilities and shall also
formally report to the Board on how it has discharged its responsibilities.
This report shall include:
i. the significant issues that it considered in relation to the financial
statements (required under paragraph 5) and how these were
addressed;
ii. its assessment of the effectiveness of the external audit process
(required under paragraph 48), the approach taken to the
appointment or reappointment of the external auditor, length of
tenure of audit firm, when a tender was last conducted and advance
notice of any retendering plans; and
iii. any other issues on which the board has requested the Committee’s
opinion.
51. Advise the Board on any area it deems appropriate within its remit where
action or improvement is needed.
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Tab 8 Governance report to Board (including the new Articles of Association)
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Terms of Reference of the Audit, Risk and Compliance Committee
52.
53.
54.
55.
56.
57.
58.
The Committee should exercise judgement in deci
fina
al st
Report on its activities in the Group’s annual report. The report should
describe the work of the Committee, including®:
i. the significant issues that the Committee considered in relation to
the financial statements and how these issues were addressed;
ii. an explanation of how the Committee has assessed the
independence and effectiveness of the external audit process and
the approach taken to the appointment or reappointment of the
external auditor, information on the length of tenure of the current
audit firm, when a tender was last conducted and advance notice
of any retendering plans; and
an explanation of how auditor independence and objectivity are
safeguarded if the external auditor provides non-audit services,
having regard to matters communicated to it by the auditor.
The Company’s Subsidiary Companies shall provide reports to the
Committee on a regular basis and as requested by the Committee.
AUTHORITY
The Committee is authorised to:
Seek any information it requires from any employee of the company in
order to perform its duties.
Obtain, at the company’s expense, independent legal, accounting or other
professional advice on any matter if it believes it necessary to do so.
Call any employee to be questioned at a meeting of the committee as and
when required.
Have the right to publish in the company’s annual report, details of any
issues that cannot be resolved between the committee and the board. If
the board has not accepted the committee’s recommendation on the
External Auditor appointment, reappointment or removal, the annual
report should include a statement explaining the committee’s
recommendation and the reasons why the board has taken a different
position.
Conduct or authorise investigations into any Group matters within the
Committee’s cope of responsibilities.
‘onsiders in relation to the
vat have inform
ng which of the issue:
ement t should
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nance report to Board (including the r
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Post Office Limited
Terms of Reference of the Audit, Risk and Compliance Committee
59.
60.
61.
62.
63.
64.
65.
66.
67.
In the absence of express authority from the Board, the Committee will
not, without the concurrence of both management or discharge of the
independent auditors, have either the responsibility or authority for the
altering of the financial statements or the accounting procedures of the
Group.
COMPOSITION AND GOVERNANCE
Membership
The Chair and members of the Committee will be appointed by the Board,
acting on the recommendation of the Nominations Committee.
The Committee shall consist of at least two independent non-executive
directors and only independent non-executive directors shall be eligible to
be members of the Committee. The Chair shall not be a member of the
Committee.
The Committee Chair shall be appointed by the Board. In the absence of
the Committee Chair and/or an appointed deputy at a Committee meeting,
the remaining members present shall elect one of themselves to chair the
meeting.
The Chair of the Company and Executive Directors may be invited to
attend any meeting, or any part of any meeting, by the Committee Chair.
The Group Chief Financial Officer, the Group General Counsel, the Head of
Risk, the Director of Compliance and the Head of Internal Audit (or those
holding positions with responsibility for such roles, howsoever named) will
be permanent invitees.
The External Auditors may attend all or part of any Committee meeting at
the invitation of the Chair. As a minimum the External Auditors will attend
to present their external audit plan for approval and to present their
reports.
Quorum
Quorum shall be two members, of whom one will have recent and relevant
financial experience.
Committee Secretary
The Company Secretary, or his or her nominee, shall act as Secretary to
the Committee and shall attend all meetings to keep minutes and record
actions.
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of Association
nance report to Board (including the new
Post Office Limited
Terms of Reference of the Audit, Risk and Compliance Committee
Frequency
68. The Committee shall meet as often as required but at least three times per
year.
Governance
69. Meetings may be held in person or by telephone or other electronic means,
so long as all participants can contribute to the meeting simultaneously.
70. Notice of each meeting shall be given to all those entitled to participate at
least three working days before the meeting. Meetings shall be planned in
accordance with key reporting and financial planning dates.
71. Meetings for the Committee will be convened by the Secretary, at the
request of Chair or any of the members and the External Auditor or Head
of Internal Audit, if they consider it necessary. The Secretary will be
responsible for setting the venue date and time of meetings in consultation
with the Chair. All papers supporting the meeting will be issued in good
time, one week in advance of the meeting date.
72. The Chair will report regularly to the Board. Minutes of each Committee
meeting will be circulated to all members of the Committee and, once
agreed, to all members of the Board.
73. The Company will provide current and new Committee members with any
training, briefings or induction required. The Company Secretary, The
Group Chief Financial Officer, the Group General Counsel, the Head of Risk,
the Director of Compliance, the Head of Internal Audit (or those holding
positions with responsibility for such roles, howsoever named) and the
External Audit Partner will keep members informed of relevant published
guidance as necessary.
F. ANNUAL REVIEW AND APPROVAL
74. The Committee will undertake an annual review of its performance and the
Terms of Reference. The outcome of these review will be recommended to
the Board for approval (notwithstanding amendments approved by the
Committee whenever so required).
Approved by: Date: Version: Effective from:
Post Office Limited Board I 23 January 2013 11 23 January 2013
Post Office Limited BoardI 26 March 2014 1.2 26 March 2014
Post Office Limited Board I 22 September 2015 1.3 22 September 2015
Post Office Limited Board I 24 March 2020 2.0 01 April 2020
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POST OFFICE LIMITED
(“the Company”)
Terms of Reference of the Nominations Committee
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The Nominations Committee (the “Committee”) is a Committee of the Company Board
(“the Board”) from which it derives its authority and to which it reports after each
meeting. Its authority is always subject to the powers and duties of the Board, as set
out in the Articles of Association.
A. PURPOSE
1. The purpose of the Committee is to:
(i)
(ii)
(iii)
(iv)
(v)
(vi)
(vii)
(viii)
Recommend to the Board the appointment, re-appointment or
removal of individuals to/ from the Board of Post Office Limited
Recommend to the Board the appointment of individuals to the
Board committees
Approve the appointment of individuals to the Company subsidiary
boards
Approve the nomination for appointment and reappointment of
individuals employed by the Company to the First Rate Exchange
Services Holdings Limited (“FRESH”) Board, and approve the
proposal for removal of individuals employed by the Company from
the FRESH Board
Approve the appointment or removal of executives who report
directly to the Group Chief Executive Officer
Recommend to the Board the appointment or removal of the Group
Company Secretary
Succession planning for Board and oversight of succession planning
at Group Executive and senior leadership level
Review and monitor the Group’s overall corporate governance
arrangements.
2. The consent of the Shareholder is required for Post Office Limited Board
appointments and will be obtained prior to recommendations to the Board?.
B. DUTIES AND RESPONSIBILITIES WITH REGARDS TO THE COMPANY
Board and Senior Executive appointments
3. Review the structure, size and composition of the Board (taking account of
the skills, experience, knowledge and diversity of its members), to ensure
that the roles of Board Chairman, Group Chief Executive, Group Chief
Financial Officer, Senior Independent Director and Non-Executive Directors
are filled and to recommend changes to the Board’s composition as
necessary.
4. Monitor the independence, and process for evaluation, of Board committees
and the skills and experience available within the Board, in order to
1 post Office Management Services Limited (Post Office Insurance) and Payzone Bill Payments Limited.
Shareholder approval would be required for the appointment of Non-Executive Directors to non FCA regulated
subsidiaries.
? The Department for Business, Energy and Industrial Strategy
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10.
11.
12.
recommend new appointments to committees, or the replacement of
individuals on those committees, as required from time to time.
Review the results of any Board and Committee evaluation process which
may relate to the time required from non-executive directors and whether
non-executive directors are spending enough time to fulfil their duties, the
composition of the Board, any of its Committees or the Group Executive.
Review and approve for recommendation to the Shareholder the re-
appointment of any non-executive director at the conclusion of their
specified term of office having given due regard to their performance and
ability to continue to contribute to the Board in the light of knowledge, skills
and experience required.
Approve for recommendation to the Shareholder the process for
identifying and nominating candidates for appointment to the Board,
including the formulation and approval of appropriate role descriptions and
specifications and considering candidates from a wide range of backgrounds,
on merit and against a range of objective criteria and with due regard for
the benefits of diversity on the Board, including gender, and which seek to
attract a wide range of talent and promote diversity within the organisation.
Such deliberations should also assess whether appointees have enough time
available to devote to the position.
Approve for recommendation to the Board, the appointment, re-
appointment or removal from office of any statutory director including the
Group Chief Executive of the Company, Chief Financial Officer, interim
directors and alternate directors who are not already directors of the
Company.
Approve for recommendation to the Board, the appointment,
reappointment or removal of any person as Chair of the Company.
Review for each proposed appointment the respective merits of open
advertising and the use of specialist advisers to facilitate the search for
appropriately qualified candidates and recommend for approval the
Shareholder.
Approve the engagement terms of external search agents for appointments
to the POL Board once Shareholder approval has been obtained.
Approve recommendations made by the Group Chief Executive on
appointments to or removal of executives who report directly to him.
Succession planning
13.
Ensure that the business puts in place development and succession plans
for the Board the Group Executive and senior leadership, taking into account
the challenges and opportunities facing the Company and the skills and
expertise needed for leadership of the Post Office in the future.
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14. Review, on behalf of the Board, succession planning for Board and senior
leadership at executive level.
15. Ensure that any proposed appointee to the Board discloses other business
interests and any potential conflict of interest, in line with the
recommendations of the UK Corporate Governance Code (the Code) and the
precepts of the Nolan Committee on Standards in Public Life.
16. Engage with the Remuneration Committee in respect of new hires, to
ensure that the proposed package for new senior appointments reflects the
responsibilities of the role and is designed to attract talent but is not
excessive.
17. Review on behalf of the Board any matters relating to the continuation in
office of any director or Group Executive Member and the Group Company
Secretary, including the suspension or termination of any contract of
employment or contract for services, subject to the provisions of the law.
Corporate Governance
18. Review the Group’s Governance Framework.
19. Review and approve the processes for Board and Committee evaluations.
20. Approve the appointment of external facilitators for Board and Committee
evaluations.
21. Review developments in corporate governance and determine whether
changes should be made to the Group’s governance arrangements.
22. Ensure that on appointment to the Board, non-executive directors receive
a formal letter of appointment setting out clearly what is expected of them
in terms of time commitment, committee service and involvement outside
Board meetings.
23. Note the appointment of any director to executive or other office in
accordance with the Conflicts of Interest Policy and letter of appointment for
Non-Executive Directors.
C. DUTIES AND RESPONSIBILITIES WITH REGARDS TO THE COMPANY
SUBSIDIARY BOARDS
Board and senior executive appointments
24. Review the structure, size and composition of the boards (taking account
of the skills, experience, knowledge and diversity of its members), to ensure
that the key roles are filled and to recommend changes to the board
composition as thought necessary.
25. Approve the process for identifying and nominating candidates for
appointment to the boards, including the formulation and approval of
appropriate role descriptions and specifications and considering candidates
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26.
27.
31.
33.
34.
35.
36.
37.
from a wide range of backgrounds, on merit and against a range of objective
criteria and with due regard for the benefits of diversity on the boards,
including gender, and which seek to attract a wide range of talent and
promote diversity within the organisation. Such deliberations should also
assess whether appointees have enough time available to devote to the
position.
Approve the appointment, reappointment, removal of statutory directors
from any subsidiary company (where Shareholder Consent is not required).
Review and approve the re-appointment of any non-executive director at
the conclusion of their specified term of office having given due regard to
their performance and ability to continue to contribute to the boards in the
light of knowledge, skills and experience required.
Review on behalf of the Board any matters relating to the continuation in
office of any board director, including the suspension or termination of any
contract of employment or contract for services, subject to the provisions of
the law.
REPORTING RESPONSIBILITIES
The Committee Chair (the Chair) shall report to the board after each
meeting on the nature and content of its discussion, recommendations and
action to be taken.
Report to the Board whatever recommendations it deems appropriate on
any area within its remit where action or improvement is needed.
Report on its activities in the Company's annual report describing the
work of the Committee, including:
i. The process used in relation to appointments, its approach to
succession planning and how both support the development of a
diverse pipeline.
ii. How board evaluation has been conducted, the nature and extent
of an external facilitator’s contact with the board and individual
directors, the outcomes and actions taken, and how it has
influenced or will influence board composition.
If an external search consultancy has been engaged, it should be identified
in the annual report alongside a statement about any other connection it
has with the company or individual directors.
AUTHORITY
The Committee is authorised by the Board to obtain, at the company’s
expense, outside legal or other professional advice on any matters within
its terms of reference.
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F. COMPOSITION AND GOVERNANCE
Membership
38. The Committee Chair (the Chair) and members of the Committee will be
appointed by the Board, acting on the recommendation of the Nominations
Committee and in consultation with the Chair of the Remuneration
Committee.
39. In the absence of the Chair of the Committee at any meeting, the
Committee members present shall determine who shall chair the meeting.
40. It shall consist of three members, including at least two independent non-
executive directors.
41. The Chairman of the Company shall chair the Committee.
Quorum
42. The quorum necessary for the transaction of business shall be two
members. In the absence of the Chair at any meeting, the Committee
members present shall determine who shall chair the meeting.
Committee Secretary
43. The Company Secretary, or his or her nominee, shall act as Secretary to
the Committee and shall attend all meetings to keep minutes and record
actions.
Frequency
44. The Committee shall meet as often as required but at least two times per
year.
Governance
45. Meetings may be held in person or by telephone or other electronic means,
so long as all participants can contribute to the meeting simultaneously.
46. Notice of each meeting shall be given to all those entitled to participate at
least three working days before the meeting.
47. Meetings for the Committee may be convened by the Secretary in
consultation with the Chair, or by any member of the Committee, at any
time. The Secretary will be responsible for setting the venue date and time
of meetings in conjunction with the Chair. All papers supporting the
meeting will be issued in good time, one week in advance of the meeting
date.
48. Minutes of each meeting will be circulated to all members of the Committee
and, once agreed, to those members of the Board who have no personal
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interest in the matters discussed. Where a conflict of interest exists, the
Company Secretary will provide sufficient information to the full Board to
provide an understanding of the matter(s) considered.
49. The Committee Secretary shall provide current and new Committee
members with any training, briefings or induction required under the
supervision of the Chair.
50. Only members of the Committee have the right to attend Committee
meetings. The Group Chief Executive and the Group Chief People Officer
(or the holder of any equivalent position) and external advisors shall be
informed of the date of each meeting and may be invited by the Chair to
attend all or part of any meeting, as and when appropriate.
51. The Committee shall have access to sufficient executive time and resources
in order to carry on its duties, including access to the Group Company
Secretary and members of the Human Resources team.
52. The Committee shall have authority to appoint executive search
consultants and to obtain, at the Company’s expense, legal or other
professional advice on matters within its terms of reference as required,
up to a financial limit determined by the Board.
53. If there should be disagreement between the Committee and the full
Board, the Chairman of the Board shall make time available for discussion
of the issue so that the matter may be resolved.
ANNUAL REVIEW AND APPROVAL
54. The Committee will undertake an annual review of its performance and the
Terms of Reference. The outcome of these review will be recommended to
the Board for approval (notwithstanding amendments approved by the
Board whenever so required).
Approved by: Date: Version: Effective from:
Post Office Limited Board 25/11/2015 Lt 25/11/2015
[Post Office Limited Board 01/04/2020 2 01/04/2020)
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POST OFFICE LIMITED
(“the Company”)
Terms of Reference of the Remuneration Committee
The Remuneration Committee (the “Committee”) is a Committee of the Company
Board (“the Board”) from which it derives its authority and to which it reports
after each meeting. Its authority is always subject to the powers and duties of
the Board, as set out in the Articles of Association.
A. PURPOSE
1. The purpose of the Committee is to:
vi.
vii.
viii.
Ensure that appropriate group remuneration strategies are in place
for (the Company) and its subsidiaries designed to attract, retain and
motivate the executive management and workforce required to run
the Company successfully’ without paying more than is necessary and
linking incentives to the Company's vision, mission and values.
Approve for recommendation to the Shareholder:
e« the remuneration and terms and conditions of employment and
variation of these for Executive Directors
e the fees for Non-Executive Directors for the Company, including
the Chair.
Approve the remuneration packages of individuals who report
directly to the Group Chief Executive Officer.
Approve the remuneration packages of Executive Directors/
Managing Directors and fees for Non-Executive Directors of its
subsidiaries.
Approve for recommendation to the Shareholder’, the criteria for,
and outturn of performance related pay arrangements for Executive
Directors and the criteria for executives who report directly to the
Group Chief Executive Officer (STIP).
Approve for recommendation to the Board’, the establishment of
(or approval of any agreement to establish) a new pension scheme
by any member of the Group.
Have oversight of and approve for recommendation to the Board
any material changes to pension arrangements for Company
employees, in particular affecting the rate of contributions required to
be made.
Have oversight of the Group remuneration and related policies for
the wider organisation.
‘In doing so, regard will be paid to the views of the Shareholder and other stakeholders; all relevant legal,
regulatory and corporate governance requirements; the risk appetite of the Company and alignment to its long-
term strategic goals, structuring of a significant proportion of remuneration to link rewards to corporate and
individual performance and designed to promote the long-term success of the Company.
? The Department for Business, Energy and Industrial Strategy.
3 The Board must then seek the approval of the Shareholder.
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ix. Have oversight of Group workforce engagement strategies and
outputs.
B. DUTIES AND RESPONSIBILITIES
Remuneration Policy for Post Office Limited: Executive
2. i. Approve for recommendation to the Board the remuneration policy
for the Group Chief Executive Officer, executive directors and those
executives who report directly to the Group Chief Executive Officer,
taking into account the remuneration policy set for other employees and
linking incentives to the Company’s vision, mission and values.
ii. Review the group remuneration policy annually and recommend any
changes to the Board for approval.
Remuneration Package: Executive Directors
3. Approve for recommendation to the Shareholder the remuneration
package for Executive Director appointments proposed by the
Nominations Committee. This may include, but shall not be restricted
to:
i. Base salary
ii. Short term incentive (annual bonus)
iii. Long Term Incentive Plan
iv. Pension Provision
v. Benefits such as car or car allowance, private health, holidays
vi. Contractual terms such as notice periods.
The recommendations shall align with the group remuneration
policy approved by the Board.
Remuneration Package: Direct reports to the Group Chief Executive
Officer
4. Approve the remuneration package for direct reports to the Group Chief
Executive. This may include, but shall not be restricted to:
i. Base salary
ii. Short term incentive (annual bonus)
iii. Long Term Incentive Plan
iv. Pension Provision
v. Benefits such as car or car allowance, private health, holidays
vi. Contractual terms such as notice periods.
The recommendations shall align with the group remuneration policy
approved by the Board.
5. Review the contractual terms applicable to executive directors such that
payments adhere to the group remuneration policy approved by the Board.
6. Review each element of the remuneration package and total remuneration
for new hires and any internal promotions and appointments which are
proposed to carry a salary in excess of the lowest salary of any executive
who reports directly to the Group Chief Executive Officer.
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7.
10.
11.
12.
13.
14.
Review annually the overall total remuneration of the Senior Group
(defined as the Group Chief Executive Officer, executive directors and
those executives who report directly to the Group Chief Executive Officer)
compared both with external market comparators and with the
remuneration of other employees in the Group.
Long Term Incentive Plan (LTIP)
i. Approve the implementation of, or changes to performance related
incentive schemes for the Executive Directors*, executives who report
directly to the Group Chief Executive Officer and senior managers eligible
to be invited to participate in the Post Office (LTIP).
ii. Review annually the performance related incentive schemes for the
executive directors, executives who report directly to the Group Chief
Executive Officer and senior managers eligible to be invited to
participate in the Post Office Long Term Incentive Plan (LTIP).
Short Term Incentive Plan (STIP)
i. Approve the criteria for, and the outturn of, performance related pay
arrangements (STIP) for Executive Directors® and the executives who
report directly to the Group Chief Executive Officer
ii. Review annually the criteria for, and outturn of, performance related
pay arrangements (STIP) for Executive Directors® and executives who
report directly to the Group Chief Executive.
Receive information on the total outturn of performance related pay
arrangements across the business.
Approve for recommendation to the Board, the establishment of (or
approval of any agreement to establish) a new pension scheme by any
member of the Group.
Have oversight of and approve for recommendation to the Board any
material changes to pension arrangements for Company employees, in
particular affecting the rate of contributions required to be made.
Approve for recommendation to the Shareholder of any exit package
that would be in excess of the contractual obligations for the Group Chief
Executive and Chief Financial Officer.
Approve the exit package for any individual with a salary above the lowest
salary of those executives who report directly to the Group Chief
Executive’, where the exit package would be in excess of contractual
obligations.
4 Executive Director LTIP arrangements must be approved by the Shareholder.
5 Executive Director STIP arrangements must be approved by the Shareholder.
® Executive Director STIP arrangement must be approved by the Shareholder.
7 For approval by the Shareholder in the case of the Chief Financial Officer.
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Remuneration Policy for Post Office Limited: Non-Executive
Directors
15. Approve for recommendation to the Shareholder the fees for Non-
Executive Directors of the Company to the Board, including the Chair.
Remuneration for Post Office Subsidiary Boards®: Executive
16. Approve the remuneration package for statutory executive director
appointments to the Company subsidiary boards °. These elements will form
the remuneration package and exit package for an individual in the above group, which may
include, but shall not be restricted to:
i. Base salary
ii. Short term incentive (annual bonus)
iii. Long Term Incentive Plan
iv. Pension Provision
v. Benefits such as car or car allowance, private health, holidays
vi. Contractual terms such as notice periods.
The recommendations shall align with the Group Remuneration Policy.
17. Review the contractual terms applicable to executive directors of the Post
Office subsidiaries such that they adhere to the group remuneration policy.
18. Review annually the overall total remuneration of the Senior Group
(defined as any members of the subsidiary board) compared both with
external market comparators and with the remuneration of other
employees in the Group.
Remuneration Policy for Subsidiary Boards: Non-Executive
Directors’?
19. i. Approve the remuneration framework within which the fees for each
Non-Executive Director of a Subsidiary Board may be paid where an
appointment is recommended by the Nominations Committee.
ii. Review annually the remuneration framework for Non-Executive fees
for the subsidiary boards.
c. ENGAGEMENT
20. To have oversight of workforce engagement measures, such as
engagement surveys, and outputs from these.
21. To receive feedback from the Senior Independent Director on employee
views.
® Post Office Management Services Limited (Post Office Insurance) and Payzone Bills Payments Limited.
° Excluding subsidiary board appointments which are in addition to an executive's primary role and where no
additional remuneration applies.
10 Section 7.3 of the Framework document. Non-Executive Directors may be appointed for Post Office
Management Services Limited, trading as Post Office Insurance.
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D. REPORTING RESPONSIBILITIES
22. Report to the Board after each meeting on the nature and content of its
discussion, recommendations and action to be taken.
23. Report on its activities in the Company’s annual report and should
describe the work of the Committee.
24. Identify in the annual report any consultants appointed as remuneration
consultants, alongside a statement about any other connection it has with
the Company or individual directors.
E. AUTHORITY
25. The Committee is authorised by the Board to obtain, at the Company’s
expense, outside legal or other professional advice on any matters within
its terms of reference.
26. The Committee shall be authorised to seek any information it requires from
any employee of the Company in order to perform its duties.
F. COMPOSITION AND GOVERNANCE
Membership
27. The Committee Chair (the Chair)! and members of the Committee will be
appointed by the Board, acting on the recommendation of the Nominations
Committee and in consultation with the Chair of the Remuneration
Committee.
28. In the absence of the Chair of the Committee at any meeting, the
Committee members present shall determine who shall chair the
Committee.
29. It shall consist of at least two independent non-executive directors. If
considered independent at the time of appointment, the Chairman of the
Company may be a member of the Committee, but shall not chair it.
30. Only Non-Executive directors shall be eligible to be members of the
Committee, such that no individual shall be involved in determining their
own remuneration.
11 The UK Corporate Governance Code (16/07/2018), stipulates that Remuneration Committee Chairs should
have at least 12 months’ experience on a remuneration committee prior to appointment.
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31.
32.
33.
34.
35.
36.
37.
38.
39.
40.
41.
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Quorum
Quorum shall be two members. In the absence of the Chair at any
meeting, the Committee members present shall determine who shall chair
the meeting.
Committee Secretary
The Group Company Secretary, or his or her nominee, shall act as
Secretary to the Committee and shall attend all meetings to keep minutes
and record actions.
Frequency
The Committee shall meet as often as required but at least three times per
year.
Governance
Meetings may be held in person or by telephone or other electronic means,
so long as all participants can contribute to the meeting simultaneously.
Notice of each meeting shall be given to all those entitled to participate at
least three working days before the meeting.
Meetings for the Committee may be convened by the Secretary in
consultation with the Chair, or by any member of the Committee, at any
time. The Secretary will be responsible for setting the venue date and time
of meetings in conjunction with the Chair. All papers supporting the
meeting will be issued in good time, one week in advance of the meeting
date.
The Chair will report regularly to the Board. Minutes of each Committee
meeting will be circulated to all members of the Committee and, once
agreed, to those members of the Board who have no personal interest in
the matters discussed. Where a conflict of interest exists, the Company
Secretary will provide sufficient information to the full Board to provide an
understanding of the matter(s) considered.
The Secretary shall provide current and new Committee members with any
training, briefings or induction required under the supervision of the Chair.
Only members of the Committee have the right to attend Committee
meetings. The Group Chief Executive and the Group Chief People Officer
(or the holder of any equivalent position) shall be informed of the date of
each meeting and may be invited by the Chair to attend all or part of any
meeting, as and when appropriate.
The Committee shall have access to sufficient executive time and resources
in order to carry on its duties, including access to the Company Secretary
and members of the Human Resources team.
The Committee shall be exclusively responsible for establishing the
selection criteria, selecting, appointing and setting terms of reference of
remuneration consultants and have authority to appoint remuneration
consultants and to obtain, at the Company’s expense, legal or other
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professional advice on matters within its terms of reference as required,
up to a financial limit determined by the Board.
42. If there should be disagreement between the Remuneration Committee
and the full Board, the Chairman of the Board shall make time available
for discussion of the issue so that the matter may be resolved. Where any
such disagreement cannot be resolved, the Remuneration Committee shall
report the issue as part of any annual report on its activities required by
the Shareholder.
G. ANNUAL REVIEW AND APPROVAL
43. The Committee will undertake an annual review of its performance and the
Terms of Reference. The outcome of these review will be recommended to
the Board for approval (notwithstanding amendments approved by the
Committee whenever so required).
Approved by: Date: Version: _I Effective from:
Post Office Limited Board 25/03/2015 11 25/03/2015
Post Office Limited Board 25/11/2015 1.2 25/11/2015
Post Office Limited Board 30/10/2018 1.3 30/10/2018
Post Office Limited Board 20/07/2019 1.4 30/07/2019
[ Post Office Limited Board 24/03/2020 1.5 25/03/2020)
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item Obligation Accountability (A)/ Responsibility 3
Overall Aims I 1. Maintain a minimum of 11,500 Post Offices during Funding Agreement. (Section 2.2 (i)) ‘A: CEO and CFO 2
Section 2 2. Meet minimum access requirements of Entrustment Letter. (Section 2.2 (ii)) R: 1-3: Group Retail and Franchise ®
3. Provide that Post Offices make available services of general economic interest (SGEl). (section 2.2 (iii)) Network Director; and Head of g
4. Operate under sound commercial/financial principles in accordance with applicable laws. Seek to deploy capital, brand and products as I Network. 4: all of GE 8
a responsible commercial operator, and manage risk to deliver positive financial returns, notwithstanding network requirements. (Section &
24) 2
The Special __I Prior written consent of Shareholder required for following decisions including but not limited to: ACEO and CFO FA
Share 1. Varying POL's Articles. R: CoSec will ensure the appropriate a
Section 3.3 2. Voluntary winding up of the company or member of the group. delegated authorities are in place and 3
3. _ Issuing or allotment of shares or granting of share rights in the company. governance requirements are e
4. Appointment or removal from office of any director or the CEO. adhered to g
5. The adoption or amendment of a Strategic Plan. e
6. Any unplanned substantial alteration in nature of the business. Z
7. Sale of material assets in the absence of which POL would not be able to perform its business as provided for in the Strategic Plan. 2
8. The entry into or implementation of a transaction involving the commitment or liability or the payment of a sum in excess of £50,000,000. 2
9. The entry into any transaction which is not on commercial terms and is not considered by the directors to be in the interests of the Company. >
10. Alterations to trademark rights. &
11. Any material variation to the remuneration or terms and conditions of employment of any of the directors appointed or approved by the g
Shareholder.
12. Incurring of any borrowing exceeding pre-set limits and subject to other restrictions as agreed with HM Treasury; and
13. The appointment or removal from office of the Chair. 8
Group 1. Develop a GSP covering a period of at least 3 years. (Sections 4.1, 4.4) ‘A: Group Chief Strategy and 8
Strategic Plan I 2. Ensure a GSP is in place at any time covering a period of 3 years. (Sections 4.1, 4.4) Transformation Officer 2
(GSP) 3. Agree a timetable with Shareholder to provide a draft and final version of next GSP at least 12 months ahead of expiration of current R: This will require input from all 8
(forms part of GSP. (Section 4.4) areas of the business, (including PO!
Group Plans) I 4. Seek final approval of GSP from the Shareholder subsequent to POL Board approval and PZBPL).
Section 4 5. Review GSP annually and update if required. Proposed changes/variations are subject to discussion and approval of the Shareholder.
(Section 4.6)
6. Inform and consult Shareholder of any contemplated changes of Group Plans. All changes subject to Shareholder approval. (Section
47)
Group 7. Develop a GBP for next the financial year on an annual basis covering a period of twelve months. (Section 4.2) A: CEO and CFO
Business 8. By 31 December, the Shareholder will agree with POL a timetable for a draft and final version of the GBP for the next financial year. R: Head of Financial Performance
Plan (GBP) (Section 4.2) and Analysis (who currently produces
(forms partof I 9. Agree with the Shareholder any issues and priorities that should be addressed in GBP (Section 4.2). the 5 yr plan)
Group Plans)
Section 4
Accounting I 1. CEO as AO to observe principles of HM Treasury in Managing Public Money (MPM) (see Appendix 1 obligations below). A: CEO
Officer 2. Personally responsible for safeguarding all funds, ensure propriety, regularity, value for money and feasibility in handling funds, and day I R: GE and wider POL Business
responsibiliti to day management of POL.
es (POL AOis I 3. Attend Committee of Public Accounts meetings when invited.
currently CEO)
Appendix 1:
Section 6.2; ___I governance
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“have a governance structure which transmits, delegates, implements and enforces decisions
Appendix 1 + have trustworthy internal controls to safeguard, channel and record resources as intended
+ work cooperatively with partners in the public interest
+ operate with propriety and regularity in alll its transactions
+ treat its customers and business counterparties fairly, honestly and with integrity
+ offer appropriate redress for failure to meet agreed customer standards
+ give timely, transparent and realistic accounts of its business and decisions, underpinning public confidence;
decision-making
+ support its ministers with clear, well-reasoned, timely and impartial advice
+ make all its decisions in line with the strategy, aims and objectives of the organisation set by ministers and/or in legislation
+ take a balanced view of the organisation's approach to managing opportunity and risk
+ impose no more than proportionate and defensible burdens on business;
financial management
+ use its resources efficiently, economically and effectively, avoiding waste and extravagance
+ plan to use its resources on an affordable and sustainable path, within agreed limits
+ carry out procurement and project appraisal objectively and fairly, using cost benefit analysis and generally seeking good value for the
Exchequer as a whole
fa} + use management information systems to gain assurance about value for money and the quality of delivery and so make timely adjustments
+ avoid over defining detail and imposing undue compliance costs, either internally or on its customers and stakeholders
+ have practical documented arrangements for controlling or working in partnership with other organisations, as appropriate
+ use internal and external audit to improve its internal controls and performance.
Shareholder I Provide information to Shareholder Policy Sponsor where required to fulfil their oversight function from policy perspective. ‘% Group Corporate Affairs and
Policy Communications Director
Sponsor (the R: Government Affairs and Policy
‘I Policy Director
Sponsor
= Section 6.4
SI Shareholder’s I Provide information to UKGI where required to fulfil their function as Shareholder representative. ‘A: Group Corporate Affairs and
wb Representativ Communications Director
S fe R: Government Affairs and Policy
Director
= I Section 6.5
& [Shareholder I CEO and CFO to attend shareholder meetings. ‘A: Shareholder, CEO and CFO(in
I Meetings terms of attendance)
R: Government Affairs and Policy
Section 6.6 Director (in terms of briefings).
POL Board I 1. To exercise control over day to day operations of POL A: The POL Board
2. Accountable to Shareholder. R: GE and wider POL Business
Section 6.7 3. _ Inform Shareholder of any significant changes that impact strategic direction or the attainability of targets. Determine rectification steps.
4. Ensure statutory/administrative requirements for use of public funds are complied with.
Individual 1. Abide by statutory and common law duties. ‘A Each member of the POL Board
Board 2. Not to misuse information gained in the course of public service for personal gain/political profit, nor seek to use the opportunity of public
service to promote private interests or those of connected persons or organisations.
3. Shareholder Representative NED to recuse him/herself from relevant Board decision where there is potential for or perceived conflict of
interest.
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Section 6.8
1. Ensure that policies and actions support POL’s overall aims and Shareholder’s wider strategic policy. A: The Chairman
2. Ensure POL Board acts with probity and that corporate governance structures and controls are in place in line with governance codes _I R: GE and wider POL Business
and guidance.
7. Formulate POL Board strategy, ‘A The Chairman
2. Promote efficient and effective use of staff and other resources. R: GE and wider POL Business
3. Ensure work of POL Board and its members are reviewed and working effectively
es 4. Ensure POL Board has appropriate balance of skills to direct business.
(additional) I 5. Ensure directors are fully briefed on terms of appointment, duties, rights and responsibilities.
Section 6.10 _I 6. Assess performance of individual members when considering re-appointment.
Board T._ POL Board to consist of: Non-Executive Chair; Group CEO; CFO; a number of NEDs with one dedicated as Senior Independent Director I A: The POL Board and Shareholder
Composition, (SID); and a Shareholder NED. (Section 7.1) R: Remco, NomCo and CoSec will
appointments I 2. The three sub-committees, Audit, Risk and Compliance (ARC), Nominations Committee (NomCo) and Remuneration Committee ensure the appropriate delegated
: (RemCo), are to be chaired by a NED. (Section 7.1) authorities are in place and
remuneration I 3. On the advice of NomCo, all POL Board appointments (apart from the Chair and Shareholder NED) are subject to Shareholder approval. I governance requirements are
and review A request for approval must contain justification for the appointment. Written consent of the Shareholder is required. (Section 7.3) adhered to.
4. Before the recruitment process begins, Shareholder to be consulted on overall recruitment process, including proposed terms, and
Section 7 conditions of appointment. This also applies to re-appointment of directors and appointment of interim directors. (Section 7.3)
5. The employment contract for each POL Board member must contain a Power of Attorney enabling POL to execute a deed of resignation
upon termination of employment. (Section 7.4)
6. RemCo to recommend to POL Board the remuneration policy and changes to individual elements of remuneration packages of POL
Board members. Remuneration will require Shareholder approval. (Section 7.6)
7. Remuneration of POL Board member that exceeds thresholds of HM Treasury's Guidance for Approval of Senior Pay requires additional
approval by Chief Secretary to the Treasury. (Section 7.6)
8. Chair to ensure performance of POL Board, Committees and POL Board members is evaluated annually. (Section 7.7)
9. SID to conduct annual appraisal of Chair and Effectiveness Review; report findings to Shareholder typically via UKGI. (Section 7.7)
10. No Group Company other than POL is to have non-executive directors appointed to its Board. This shall not apply to any Group
Company subject to FCA regulation. (Section 7.8ii)
Essential 1. Publish ARA and lay before Parliament annually. (Section 8.1) 1.
Publications I 2. Provide Network Report to Shareholder annually and lay before Parliament. (Section 8.2) A: CEO and CFO
R: The Financial Controller currently
Section 8 co-ordinates this exercise and holds
the pen, with input from the wider
business. The Government Affairs
and Policy Director team lay before
parliament.
A: CEO and CFO
R: The Director or Network
Development currently co-ordinates
this exercise and holds the pen, with
input from the wider business. The
Government Affairs and Policy
Director team lay before parliament.
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Observance I 1. Observe Public Sector Pay and Terms (Section 9.3) T. Group Chief People Office
corporate 2. Seek to comply with FRC UK Corporate Governance Code (the Code). If POL does not intend to observe the Code, to notify UKGIin I2. CoSec Team
governance advance. (Section 9.4) 3. CoSec Team
guidelines 4. CoSec Team
Appendix 2 5. CoSec Team
Section 9 & I POL shall have regard to the principles set out in relevant sections of the following guidance documents: 6. Head of Risk
Appendix 2 I Corporate Governance 7. Head of Treasury, Tax and
3. Corporate Governance Code for Central Goverment Departments (April 2017) Insurance
https ://www.gov.uk/government/publications/corporate-governance-code-for-central-government-departments-2017 8. MLRO
9. Head of Financial Performance
4. Guidance note that supports the Corporate Governance Code (April 2017) and Analysis.
Attps:/assets. publishing. service.gov.uk/government/uploads/system/uploads/attachment _data/file/609668/PU2076 corporate governance 10. As per 7.3 of the FD, only the
uidance.pdf appointment of the Chairman is a
public appointment and thus
5. Code of Conduct for Board Members of Public Bodies (June 2019) caught by this guidance.
https://www.gov.uk/government/publications/Board-members-of-public-bodies-code-of-conduct However, it is our understanding
6. Management of Risk: Principles and Concepts (July 2019) the expectation is that this
httos:/www.ov.uk/aovernment/publications/orange-book guidance will also be followed for
the CEO. Accountability sits with
Financial Management the SoS with the Group Chief
7. Managing Public Money (MPM) (March 2018) People Officer being the point of
https://assets publishing service.gov.uk/government/uploads/system/uploads/attachment _data/file/742189/Managing Public Money MPM contact within POL.
with annexes 2018.pdf 11. As per 7.3 of the FD, only the
appointment of the Chairman is a
8. HM Treasury and NAO Guidance on Tackling Fraud (2013) public appointment and thus
https://www.nao.org.uk/wp-content/uploads/2013/02/Tackling External Fraud.pdf caught by this guidance.
9. HM Treasury Consolidated Budget Guidance (particularly Chapter 17) (March 2019) However, it is our understanding
https://www.gov.uk/government/publications/consolidated-budgeting-quidance-2019-to-2020 the expectation is that this
guidance will also be followed for
Senior Appointments and Remuneration the CEO. Accountability sits with
10. Governance Code on Public Appointments (December 2016) RemCo and responsibility which
https://assets.publishing service.gov.uk/government/uploads/system/uploads/attachment_data/file/578498/governance code on public app sits with the Group Chief People
ointments 16_12 2016 pdf Officer.
11. HM Treasury Guidance for approval of Senior Pay (January 2018) 12. MLRO
https www aov.uk/government/publications/senior-civil-service-pay-and-reward
Other
12. Whistleblowing Guidance and Code of Practice (March 2015)
https //www.gov.uk/government/publications/whistleblowing-guidance-and-code-of-practice-for-employers
Financial 1. Not to borrow externally unless agreed by Shareholder. (Section 10.1) ® CEO and CFO
responsibiliti I 2. Borrowing from the Shareholder will be subject to appropriate documentation to be agreed between POL/Shareholder. (Section 10.1) R: CoSec will ensure the appropriate
es and 3. As part of the Funding Agreement between Shareholder/POL, POL Board is required to meet specific requirements in terms of preparing I delegated authorities are in place and
funding and reporting against the strategic plan covering the relevant funding term. (Section 10.2) governance requirements are
arrangements I 4. To adopt dividend policy once commercially sustainable. (Section 10.4) adhered to. Head of Treasury, Tax
Section 10 and Insurance
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A: CEO and CFO
POL’s 7. Any undertaking that incurs expenditure in excess of £50,000,000 requires prior written consent of Shareholder. (Section 17.1)
delegated 2. To putin place appropriate policies of financial delegation to Group Companies. Group Companies to seek to comply with these R: CoSec will ensure the appropriate
authority policies. (Section 11.2) delegated authorities are in place and
governance requirements are
Section 11 adhered to
Reporting T,_ Share information on key strategic or policy issues with Shareholder. (Section 12.1) 1.
performance, I 2. Any final decision on “Relevant Issues” will require written notification to Shareholder not less than 10 business days before any final A: Group Corporate Affairs and
information
exchange and
confidentialit
y
decision is made
Relevant issues include:
* Issues not set out in an approved GBP
* Anissue that may have material adverse effect upon the business or financial prospects of the Group or Group Company.
* Regulatory matters, such as any Group Company being referred for regulatory investigation by relevant regulatory authority.
Communications Director
R: Government Affairs and Policy
Director
2
A: The POL Board
R: CoSee will ensure the appropriate
Section 12 (Sections 12.2, 12.3)
delegated authorities are in place and
governance requirements are
adhered to
Reporting T. Provide quarterly report via UKGI on: ‘A: CFO
performance (a) Summary of performance of previous quarter R: Head of Financial Performance
to the (b) Information on expected draw-down for remaining duration of strategic plan and Analysis (1, 4) , Director of
Shareholder (c) Update on delivery against planned investments. Investment plans should include look ahead over the next three financial years. I Network Development (2), Head of
(Section 13.1) Legal, Disputes Resolution & Brand
Section 13 Provide quarterly update to UKGI on performance of branch network against overall aims set out in Entrustment Letter. (Section 13.2) (4)
On
Inform UKGI before the quarterly update is provided of whether POL has failed to meet its objectives set out in section 2.2 of framework
document. (Section 13.2)
4. Provide quarterly update on any active litigation, threatened litigation or reasonably anticipated litigation. (Section 13.4)
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LCG Governance Framework
Workshop
Company Secretariat, March 2020
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Agenda
Introduction
Our Structures
Company Constitutional Documents
Company & Group Matters Reserved
VF wnir
Matters Reserved to the Board, Board Committee Terms of Reference and Executive
Committee Terms of References
Examples of Key Approval Paths
What hasn’t changed?
The Framework Document
po on D
What does this mean for LCG?
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Introduction
Reason for the changes
.
.
.
Post Office Limited’s Shareholder (Department for Business, Energy and Industrial Strategy - BEIS) request
Greater oversight by BEIS over the Group — certain matters relating to our subsidiaries now require BEIS consent
Introduction of a Framework Document in line with other Government-owned entities
Governance Framework translates changes to Constitutional Documents into operational documents
Documents revised to be clearer and consistent across the Group
Key Information
Affects all Group Companies that are wholly owned by Post Office Limited (excludes First Rate Exchange Services Joint Venture)
Final ministerial approval is pending, but expected shortly
Due to be approved by all Group Boards in March 2020
Changes are effective from 1 April 2020
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Group Structure
Secretary of State for Business,
Energy & Industrial Strategy
Post Office Limited
First Rate Exchange Services Post Office Management Services Payzone Bill Payments
Holdings Limited (FRESH) Limited Limited
50% owned Joint venture with Bank 100% owned 100% owned
of Ireland (UK) pic
First Rate Exchange Services
Limited (FRES)
100% owned by FRESH
Board & Committee Structure
Post Office Limited (POL)
First Rate Exchange Services
(Holdings) Limited (FRESH)
(30:50 joint venture with Bank of Ireland (UK) pe)
First Rate Exchange Services
Limited (FRES)
(wholly owned subsidiary of FRESH)
s2anquea qwier
Executive Committee (ExCo) Executive Committee (ExCo)
FRESH isan aasociated undertaking of POL **Committees attended by representatives from FRES, POL K BOI. ***These meetings orm the new operating rhytten introduced at the end ef 2019 and their governance is stil being finalised.
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Company’s Constitutional Documents ===» Governance Framework
Post Office Limited Post Office Limited
* Articles of Association (existing but revised) * Matters Reserved to the Board
* Entrustment Letter (existing) * Board Committee Terms of Reference
* Funding Agreement (existing) * Executive Committee Terms of Reference
* Framework Document (new document)
Post Office Insurance
Post Office Insurance ¢ Matters Reserved to the Board
¢ Articles of Association (existing but revised) * Board Committee Terms of Reference
* Executive Committee Terms of Reference
Payzone Bill Payments Limited
Payzone Bill Payments Limited
* Articles of Association (existing but revised) y y
* Matters Reserved to the Board
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What is the purpose of these documents?
* Matters Reserved to the Board
* Sets out the decisions that can only be taken at Board level
* Includes where decisions require the consent of BEIS
* Assists with Board planning and ensures that there is clarity over where the decision-making responsibility lies.
* Board Committee Terms of Reference
* Sets out the powers and responsibilities of the committee
* May be able to take decisions of its own accord, or may make recommendations to the Board
* All power is delegated from the Board
* Executive Committee Terms of Reference
* Forum for operational decision-making
* Power delegated to CEO/MD for day-to-day running of the business
* Assists CEO/MD in running the business — looking at tactical and strategic business issues and reviewing all matters
going to the Board
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Company Matters Reserved
For Post Office Limited, these matters require approval by BEIS as Shareholder of Post Office Limited.
For Post Office Insurance & Payzone Bill Payments Limits, these matters required approval by Post Office Limited as Shareholder.
* The appointment or removal of directors, chief executive (or equivalent) or chair of the Company (including
alternate directors, but Post Office Insurance is not permitted to have alternates)
¢ Any change in the prescribed minimum number of directors of the company (all have minimum of two)
* Any action taken by the company or the Board (including any appointment, removal or re-designation)
which would have the effect that the Board ceased to include directors appointed to the post of chair, chief
executive and finance director (or directors carrying out the general functions denoted by such posts).
* The approval of, or any material amendment, to director remuneration and terms and conditions of
employment.
¢ The declaration or payment of any dividend or the making of any distribution by the company other than in
accordance with the Group Business Plan.
¢ Any distribution, payment or return to shareholders of the company out of capital of the company.
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Group Matters Reserved
For Post Office Limited, these matters require approval of BEIS as Shareholder of Post Office Limited.
For Post Office Insurance & Payzone Bill Payments Limits, these matters required approval by Post Office Limited (Shareholder) and BEIS (Parent Shareholder).
*denotes a new approval requirement for POL (for subsidiaries, no matters previously required BEIS approval)
* the adoption of a Group Strategic Plan / Company Business Plan or any material variation or amendment thereof
* The alteration or deletion of, or the ratification of any breach of, all or any part of the Articles
+ The winding-up or entry into administration of the company or the presentation of a petition for the winding-up of the company
* Any action relating to shares in the Company
* Formation of a subsidiary or any action relating to a subsidiary or associated undertaking
+ Amalgamation or merger of the Company with another
* Creation or grant of an encumbrance over whole or part of the business
* Other than intra-group, making of loans, granting of credit or giving of a guarantee or indemnity (other than in the ordinary course of business)
* Restructure or reorganisation of the Group
* Change to accounting reference date or accounting practices or policies previously used (unless required by law or GAAP)
* Appointment and remuneration of any director appointed to a subsidiary company who is not an employee of the Group (not applicable to Post Office Insurance)
* The establishment of a new pension scheme
* Substantial alteration to the nature of the business (unless specifically provided for in the Group Strategic Plan)
* Relevant transaction where Company ceases to own something meaning it cannot continue to perform the business of the Company
+ Relevant transaction where spend/liability is >£50,000
* Relevant transaction that is not on commercial terms and is not considered by the Board to be in the best interests of the Company
* Actions relating to Trademarks (sale, assignment, disposal etc.)
+ Non-intra Group borrowing (save for some limited exceptions) (previously only where exceeded £75,000,000)
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What is a relevant transaction?
¢ Any actual or proposed acquisition, sale or other disposition or parting or sharing of
ownership of any assets, rights or property OTHER THAN:
* In the ordinary course of business
° Intra-group transactions
* Transactions approved in the Group Strategic Plan
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Matters Reserved to the Board
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Tables of Delegated Authorities
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Board Committee Terms of Reference
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Executive Committee Terms of Reference
* Post Office Insurance:
* Executive Committee (ExCo)
* Risk, Compliance & Conduct Committee
* Product Committee
* Pricing Committee
* Post Office Limited:
* Group Executive
* Risk & Compliance Committee
* Investment Committee
* Project Review Board
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Examples of key approval paths
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Post Office Limited : OPEX Spend Approvals
Post Office Limited OPEX Spend (<£5m)
+ Follows spend approvals delegated to CEO, CFO and GE.
+ Requires completion of necessary governance processes including, where applicable, the Contract Approval Process.
v _ Liabilities/indemnities: Approver must have requisite spend approval level to approve the higher of the cost and liabilities under the contract.
Where liabilities are non-standard and over £2m - unlimited, these must be approved by General Counsel and CFO.
Post Office Limited OPEX Spend (>£5m, <£50m)
Group Executive POL Board
‘Approve for idation to POL Board Approve
Post Office Limited OPEX Spend (>50m, where a relevant transaction (unlikely to arise here)*)
Group Executive POL Board Shareholder (BEIS)
rove for recor (9 POL Board a ct Consent
*Relevant transaction is defined as any transaction which is not (i) in the ordinary course of business, (ii) intra-group or (iii) approved in the Group Strategic Plan.
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Post Office Limited : Change (CAPEX & Exceptional) Spend Approvals
Post Office Limited Change Spend (<£5m)
Project Review Board
Investment Committee
‘Approve
Investment Committee POL Board
Approve
Project Review
Group Executive
jan to POL
Shareholder (BEIS)
Consent
POL Board
Approve for Approve
Where a contract(s) must be signed following approval of change spend via any route, the Contract Approval Process must
be followed.
*Relevant transaction is defined as any transaction which is not (i) in the ordinary course of business, (ii) intra-group or (iii) approved in the Group Strategic Plan.
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Subsidiary: OPEX Spend Approvals
OPEX Spend (Post Office Insurance <£5m, Payzone Bill Payments <£2m)
Follows spend approvals delegated to Managing Director, CFO and ExCo/SLT(as applicable).
Requires completion of necessary governance processes including, where applicable, the Contract Approval Process.
v Liabilities/indemnities: Approver must have requisite spend approval level to approve the higher of the cost and liabilities under the contract. Where
liabilities are non-standard and over £2m - unlimited, these must be approved by Group General Counsel and CFO/Finance Director (as applicable).
Post Office Insurance OPEX Spend (>£5m, <£50m)
Subsidiary Board Group Executive POL Board
ee Appr
poi tion to
Subsidiary Board Group Executive POL Board
Shareholder smendation to
Shareholder (BEIS)
Consent
POL Board
Group Executive
ymendation to POL Board
older
Subsidiary Board
holder
Approve for
‘Approve for recommendation to $
*Relevant transaction is defined as any transaction which is not (i) in the ordinary course of business, (ii) intra-group or (iii) approved in the Group Strategic Plan.
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Subsidiary: Change (CAPEX & Exceptional) Spend Approvals
Post Office Insurance Change Spend (>£5m, <£50m)
Project Review
Board
nendation to
Committee
Investment Committee
Approve for rs
Po
POL Board
Group Executive
nmendation to the
co
40
Project Review
Board
mmmend
omni
Subsidiary Board
mmendation to
Group Executive
Anprove for recammendation to POL
POL Board
Approve
Subsidiary
Board
Investment
Committee
POL Board Shareholder (BEIS)
Consent
Where a contract(s) must be signed following approval of change spend via any route, the Contract Approval Process must
be followed.
Due to meeting timings, this may not follow in a linear manner.
*Relevant transaction is defined as any transaction which is not (i) in the ordinary course of business, (ii) intra-group or (iii) approved in the Group Strategic Plan.
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What hasn’t changed?
* The spend approval limits for all Group Companies remain the same:
* POL Board >£5m
* POI Board <£5m, >£5m requires POL Board approval
* PZBPL Board <£2m, >£2m requires POL Board approval
* Inall cases, if >£50m and a relevant transaction, BEIS approval is required.
* Change Spend (CAPEX & Exceptional) approvals remain the same requiring Project Review Board (up to
£2m) and Investment Committee (up to £5m) oversight.
¢ Liabilities approvals remain the same.
* Contract Approval Process must still be adhered to (where applicable).
* Contracts must still be signed in line with the Contract Execution Policy.
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Framework Document
¢ Though the Framework Document does not convey any legal powers or
responsibilities and is not legally binding, it will be a public document,
published on the Gov.UK website. It codifies the responsibilities between
the parties to the Document and helps POL engage constructively with
our Shareholder.
¢ POU’s subsidiaries are not party to the Framework Document, but, from a
relationship perspective, must support POL in adhering to its obligations.
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Framework Document Obligations
* The Framework Document sets out:
* Certain parameters within which Post Office is expected to operate;
* Certain obligations with which Post Office is expected to comply; and
* Certain aspects of the relationship between the Shareholder, the Shareholder’s Representative and
Post Office and how it is expected that they will interact with each other
¢ Although broadly speaking the Framework Document simply formalises current
practices, Post Office will now need to:
* Develop a strategic plan for the Post Office Group covering a period of at least 3 years anda
business plan covering a period of 12 months.
* Discharge various reporting obligations including, on a quarterly basis, providing a report via the
Shareholder’s Representative setting out:
* asummary of its performance over the previous quarter;
* information on its expected draw-down on any available SGEI Payment for the remaining duration of the
strategic plan referred to in the Funding Agreement; and
* an update on delivery against its planned investments as stipulated in the Funding Agreement, and set
out in the relevant Group Strategic Plan.
* Have regard to a number of Government wide corporate guidance which are applicable to public
corporations, and any future relevant guidance as specified by Government.
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Group Strategic / Business Plan Distinction
* Group Strategic Plan — at least three years:
+ describe the strategic objectives of the Group, the strategy for meeting those objectives and associated performance
targets
* analyse the commercial and regulatory environment in which the group operates
* set out the group’s strategic response to the commercial and regulatory environment
* Group Business Plan — 12 months:
* the steps to be taken in respect of the current Group Strategic Plan
* Annual budget, including financial forecasts and performance targets
* areconciliation of any differences from previous Business Plan and current Group Strategic Plan
* reporting on key performance indicators and performance against targets
* information on the network of Branches
* information on the state of the relationship and any developments with the community of postmasters
* Any proposed quarterly drawings of Government funding
* information on the planned investment activities
* an update on forecast financial performance for the current financial year
* information on any other outcomes set out in the Group Strategic Plan that do not form part of the above.
Guidance to which Post Office Group must have regard
Corporate Governance
Corporate Governance Code for Central Government Departments (April 2017)
Guidance note that supports the Corporate Governance Code (April 2017)
Code of Conduct for Board Members of Public Bodies (June 2019)
Management of Risk: Principles and Concepts (July 2019)
Financial Management
Managing Public Money (MPM) (March 2018)
HM Treasury and NAO Guidance on Tackling Fraud (2013)
HM Treasury Consolidated Budget Guidance (particularly Chapter 11) (March 2019)
Senior Appointments and Remuneration
Governance Code on Public Appointments (December 2016)
HM Treasury Guidance for approval of Senior Pay (January 2018)
Other
Whistleblowing Guidance and Code of Practice (March 2015)
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UK Corporate Governance Code 2018
* The Group is required to “seek to comply” with the Principles and Provisions of the
Code.
* Code is designed for all companies with a premium listing, whether incorporated in
the UK or elsewhere
* Emphasises the value of good corporate governance for achieving long-term
sustainable success
* Consists of Principles and Provisions which are supported by Guidance on Audit
Committees, Board Effectiveness and Risk Management, Internal Control and Related
Financial and Business Reporting.
* Sections: Board Leadership & Company Purpose, Division of Responsibilities,
Composition, Succession & Evaluation, Audit, Risk & Internal Control and
Remuneration
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What does this mean for LCG?
* Does your team have any accountabilities or responsibilities under the Framework Document?
What needs to be put in place to ensure these are met?
* Do you need to support the business in reporting requirements under the Framework
Document?
* Do you need to consider any of the guidance to which Post Office must have regard in your
advice?
* When providing advice to the business (including our subsidiaries), do you need to consider any
approval requirements?
* If approvals are required, consider your timeframes which could be longer than expected.
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Comms for the Governance Framework
* Updated Decision-making page (One Update)
* Information drop in session for GE, GE-1 and subsidiary equivalent in March
* Business workshops in April
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Post Office Ltd ©Mar-20 Private & Confidential
Non-Executive Director annual appraisal discussion
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Name:
Date of meeting:
1. How do would you assess your contribution to meetings?
2. How would you assess your chairing of meetings? (Where applicable)
3. How would you describe your approach to engagement between meetings (e.g. do
you have access to the people and information you need? Do you feel you have
enough time to be to be able to fulfil the requirements of your role?)
4 What do you see as the main experience, knowledge and skills you bring to the
Board?
5. Do you have any training or development needs and/ or suggestions for Board
briefing sessions?
6. Is there anything else you would like to add or discuss?
Chairman’s comments:
Non- Executive Director Induction — Lisa Harrington (11'" February / 2"! & 11" March and 14" April 2020)
Group Executive
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Date & Time Meeting with Title Key Accountabilities Documents to provide:
Monday 2" March at I Nick Read Group CEO * Overview
09.00hrs © Current issues
* North Star
Monday 2" March at I Al Cameron Group Chief Financial Officer © Financial sustainability Financial performance pack
12.45hrs
Group Operations and Supply Chain
Director (Interim)
UKGI relationship
Finance business partnering
Financial planning and analysis
Postmaster support ~call centre
Customer support ~call centre
GLO operational implementation
Loss prevention
Property management
Supply chain operations
Back office operations
Health and safety
° Budgets
© Strategic 3 year plan
Monday 2" March at
15.00hrs
Owen Woodley
Group Chief Commercial Officer
Product trading
Product insights
Product innovation
Product management
Product partnership management
Product support -call centres
Commercial digital channel
Monday 2" March at
12.00hrs
Ben Foat
Group General Counsel
Legal
GLO strategy
Litigation projects
Compliance
Data protection
Governance
© Summaries of significant contracts
(BO1/ RMG/ Banking Services
Framework etc)
* Group Policies (Conflicts, ABC)
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Monday 2"
March at 16.00hrs.
Richard Taylor
Group Corporate Affairs and
Communications Director
Legal
GLO strategy
Litigation projects
Compliance
Data protection
Governance
Postmaster communications
Internal communications
Change communications
Event planning
Corporate social responsibility
Monday 2°
March at 10.00hrs
Lisa Cherry
Group Chief People Officer
HR Business partnering
Talent acquisition
Talent management
Performance management
Core learning and development
Reward and pensions
Tuesday 11°
February at
11.30hrs
Emma Springham
Group Marketing and Brand
Director
Customer insights
Brand
Marketing planning and operations
Branch marketing
Digital marketing
Social media
Campaign management
Marketing performance
Monday 2nd
March at 14.00hrs.
Dan Zinner
Group Chief Strategy and
Transformation Officer
Group strategy
Strategic portfolio office
Transformation portfolio delivery
Transformation portfolio assurance
Change community management
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Tuesday 14 April I Amanda Jones Group Retail and Franchise * Postmaster relationship
at 14.00hrs Network Director (interim) * Postmaster onboarding
* Postmaster learning and development
* Postmaster performance management
* Postmaster remuneration
‘* Postmaster exit and termination
* Management of contractual arrangements —
commercial partnerships
* DMB management
* Network operating model
Monday 2" Jeff Smyth Group Chief Information Officer © Enterprise architecture
March at 14.00hrs (interim)
© Software engineering
¢ = Data
* ITcontract management
* ITservice and operations
* Disaster recovery and business continuity
* Information security
© Cyber security
Board Members
Time Meeting with Title Induction to include: Documents to provide:
Tuesday 14" Tim Parker Chairman °
April at Chairman - Board, NomCo
12.00hrs Member - RemCo
Monday 23 Ken McCall SID
March at Chairman — Remco.
17.00hrs Member - NomCo, ARC
Still to be Carla Stent NED
arranged Chair - ARC
11" February at_I Tom Cooper Shareholder Representative
12.30hrs
Still to be Tim Franklin Chairman — Post Office
arranged Insurance (PO!)
Member - ARC
Other meetings/visits
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Time
Meeting with
Title
Induction to include:
Documents to provide:
Monday 2 March at
10.30hrs
Veronica Branton
Company Secretary
Corporate Governance Framework
Boards & Committees
Tuesday 24" March I Mark Siviter Managing Director — Mails and Retail I Mails Strategy & negotiations with RMG
at 10.00hrs
Tuesday 11" Tom Lee Group Financial Controller
February at 14.00hrs
Tuesday 11"
February at 15.00hrs
Johann Appel
Head of Internal Audit
Tuesday 11"
February at 11.00hrs
David Parry
Senior Assistant Company Secretary
Induction Documents and request for
information
Tuesday 11"
February at 16.00hrs
Diane Blanchard
EA to Chairman, Non-Executive
Directors and General Counsel
Ways of working and Board Support
* — Branch Visits: 11°" March — Shephard’s Bush Area
* Cash centre Visit: 14" April in the morning.
Induction Schedule
Date: Tuesday 11'" February 2020
Location: 1.03 Harpenden, Finsbury Dials
11.00hrs — 11.30hrs
David Parry, Senior Assistant Company Secretary
11.30hrs — 12.15hrs
Emma Springham, Group Marketing and Brand Director
12
12.30hrs — 13.30hrs
Tom Cooper, Non-Executive Director and Shareholder Representative
14.00hrs — 15.00hrs
Tom Lee, Group Financial Controller
15.00hrs — 16.00hrs
Johann Appel, Head of Internal Audit
16.00hrs — 16.30hrs
Di Blanchard, EA to Chairman and Non-Executive Directors
Date: Monday 2"¢
March 2020
Location: 1.02 Northolt, Finsbury Dials
08.30hrs to 09.15hrs.
Jeff Smyth, Group Chief Information Officer (Interim)
09.15hrs to 10.00hrs.
Nick Read, Group CEO
10.00hrs to 10.30hrs
Lisa Cherry, Chief Group People Officer
10.30hrs to 11.30hrs
Veronica Branton, Company Secretary
12.00hrs to 12.45hrs
Ben Foat, Group General Counsel
12.45hrs tO 13.30hrs
Al Cameron, Group CFO
14.00hrs to 15.00hrs
Jeff Smyth, Group Chief Information Officer (Interim)
15.00hrs to 16.00hrs
Owen Woodley, Group Chief Commercial Officer
16.00hrs to 16.45hrs
Richard Taylor, Group Corporate Affairs and Communications Director
Location: Branch Visits,
Date: Wednesday 11" March 2020
Shepherds Bush area
Timings and branches tbc
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Date: Monday 23 March 2020
Location: Chairman’s Office, Finsbury Dials
17.00hrs to 18.00hrs Ken McCall, Senior Independent Director
Location: Chiswell Street Dining Rooms, 56 Chiswell St, London EC1Y 4SA
18.00hrs to 20.30hrs POL Board Dinner
Date: Tuesday 24" March 2020
Location: 1.16 Balamory, Finsbury Dials
10.00hrs to 11.00hrs Mark Siviter, Managing Director — Mails & Retail
Location: 1.19 Wakefield, Finsbury Dials
11.45hrs to 17.00hrs POL Board
Date: Tuesday 14* April 2020
Location: Cash Centre, Etna House, Cody Road Industrial Estate, London, E16 4TG
09.00hrs to 11.00hrs Cash Centre Visit
To note:-
« ID Required - Finsbury Dials Access Pass or Driver’s License
e Steel toe capped boots
Location: 1.19 Wakefield, Finsbury Dials
12.00hrs to 12.30hrs Tim Parker, Chairman
14.00hrs to 15.00hrs Amanda Jones, Group Retail and Franchise Network Director
Induction materials for Lisa Harrington
Contents Page
Core Induction Material
Corporate History
Post Office Group Structure Chart
Post Office Group Business lines
Post Office Group Regulators
Boards & Executives
Company Secretariat
Entrustment Letter
Funding Agreement
Directors’ Duties & Conflicts of Interest
Glossary of Terms
Guidance for Decisions Made Outside of Board Meetings
Code of Conduct for Board Members
Conflicts of Interest
Director Applicable Group Policies
- Anti-Bribery & Corruption (incorporating Gifts & Hospitality)
- Anti-Money Laundering & Counter Terrorist Financing
- Travel & Expense Policy
Company Constitutional Documentation
16.
17.
18.
19.
20.
Articles of Association
Governance Documents
- Matters Reserved to the Board (pending review)
- Audit, Risk & Compliance Committee Terms of Reference
- Remuneration Committee Terms of Reference
- Nominations Committee Terms of Reference
- Group Executive Committee Terms of Reference
- Delegated Authorities & Authorised Signatories
- Structure Chart (pending review)
- Board Effectiveness 2018
Accounts
- Post Office Limited Annual Report and Accounts for 2018/19
Insurance
- Group Insurance
Practical Matters
- 2020 Meeting Dates
- Board & Executive Contact list
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Additional Induction Materials/ Background Papers
- Induction Briefing Note
- Initial funding request to Government 14 February 2020
- The Network Report
- The PSG papers to Board in 26 November 2019 and 28 January 2020
- The LTIP and STIP papers that went to RemCo on 11 November 2019,
including the appendices
- The cash and facility management paper that went to Board on 26 November
2019
- The Starling papers to Board in July 2019 and January 2020