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MINUTES OF A MEETING OF THE BOARD OF DIRECTORS OF POST OFFICE LIMITED HELD ON TUESDAY 26
SEPTEMBER 2023 AT 100 WOOD STREET, LONDON, EC2V 7ER AT 11:00 AM
Present: Henry Staunton Chairman (Chairman)
Lorna Gratton Non-Executive Director (LG)
Saf Ismail Non-Executive Director (SI)
Elliot Jacobs Non-Executive Director (EJ)
Ben Tidswell Senior Independent Director (BT)
Brian Gaunt Non-Executive Director (BG)
Simon Jeffreys Non-Executive Director (SJ)
Amanda Burton Non-Executive Director (AB)
Andrew Darfoor Non-Executive Director (AD)
Nick Read Group Chief Executive Officer (NR)
In attendance: Rachel Scarrabelotti Company Secretary (RS)
Owen Woodley Deputy CEO (Observer) (OW)
Kathryn Sherratt Interim CFO (Observer) (KS)
Asha Patel Financial Planning and Analysis Director (AP)
Tim McInnes Strategy and Transformation Director (TM)
Tom Lee Group Financial Controller (TL)
Christian Spelzini Head of Legal - Corporate, Banking and Financial Services
(cs)
Chris Brocklesby Chief Transformation Officer (CB)
Ben Foat Group General Counsel (BF)
Diane Wills Public Inquiry Director (DW)
Gemma Ludgate Inquiry Operations Director (GL)
Simon Recaldin Remediation Unit Director (SR)
Liam Carroll Procurement Director (LC)
Zdravko Mladenov Group Chief Digital and Information Officer (ZM)
Apologies: Alisdair Cameron Group Chief Finance Officer (AC)
Action
1. Welcome and Conflicts of Interest, Inquiry Undertakings
Welcome and Conflicts of Interest
A quorum being present, the Chairman opened the meeting. The Chairman called for the
Directors to disclose any conflicts of interest. The Directors declared that they had no
conflicts of interest in the matters to be considered at the meeting in accordance with the
requirements of section 177 of the Companies Act 2006 and the Company’s Articles of
Association.
The Board acknowledged the attendance of OW and KS as observers at the meeting. As
observers, the Board was aware that all contributions made by OW and KS to the meeting
were observations only, and did not constitute advice, recommendations, directions or
instructions. The Board confirmed that it would take due care not to be unduly influenced
solely by a contribution made by OW or KS and that it would reach its conclusions based
ona balanced and diligent assessment of all the facts available to it.
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Inquiry Confidentiality Undertakings
The Board noted that TL and LC did not have confidentiality undertakings accepted by the
Inquiry in place, and that these individuals would need to be excused from the meeting
should the need to discuss information confidential to the Inquiry arise.
Minutes and Matters Arising
TABLED and NOTED were draft Minutes from the Board Meetings of 5 July 2023, 11 July
2023, 11 July 2023 (Strategy Away Day 1), 12 July 2023 (Strategy Away Day 2) and 17
August 2023. The Board RESOLVED that the Minutes of the Meetings held on 5 July 2023,
11 July 2023, 11 July 2023 (Strategy Away Day 1), 12 July 2023 (Strategy Away Day 2) and
17 August 2023 be APPROVED as a correct record of the Meetings and be signed by the
Chair.
The Board NOTED the action log and status of the actions shown.
Committee Reports (verbal)
Remediation Committee
BT advised as follows:
© The Secretary of State had announced the provision of additional funding to the
Company to make an up-front offer of £600,000 in full and final settlement to
Postmasters who had had their Horizon related convictions overturned. BT
outlined the percentage of potential claimants who might accept;
¢ Inrelation to Criminal cases there were 5 appeals referred by the CCRC in the
Crown Court 2 of which the Board had decided to concede and 3 of which awaited
a decision on stance. BT shared his view that there may be more of these cases
and that the Board would need to consider compensation;
© Disclosure issues in relation to criminal appeals in Scotland were of concern;
* Anappeals case had arisen that was not a Horizon case, however counsel were still
advising that
BT advised that it was unclear
whether this was an isolated aberrant case; the case would be brought to the
October Board meeting for the Board to determine the approach. In response to
SJ’s queries BT outlined the PFA Triage exercise that was being undertaken.
Discussion followed in relation to ensuring the Company’s policies and processes in
relation to Postmasters were fit for purpose, with NR detailing the work undertaken in this
respect post the Cl. KS spoke to the challenge around branch discrepancies and
addressing these sensitively, advising of the loss provisioned each month for these. OW
advised that M Roberts was currently working through options as to how to commence
path clearing activities ahead of SPM rollout including the conduct of branch assurance
visits.
There was discussion as to how the Inquiry was progressing. NR noted ongoing disclosure
issues, that the Inquiry team remained under intense pressure, and the ongoing
attendance at the Inquiry by senior members of the business. ACTION SI requested that RS
the Inquiry hearing timetable be circulated to Board members so Board members could
similarly attend.
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3.2 Audit, Risk and Compliance Committee
SJ advised as follows:
The papers submitted to ARC indicated a potential deterioration in the first line
management of risk and this had been raised with management. In response a
calibration exercise was being undertaken by management to assess the extent to
which the Company was operating outside of risk appetite and tolerance, as it
appeared that mitigations were reducing;
Insurai al levels for the Company had been approved. It was encouraging
roviding assurance that the proposed levels of cover were
appropriate;
Aresponse was still awaited from HMRC in respect of the IR35 matter;
In relation to the external audit process, a very tight timetable was being worked
to and an additional ARC meeting was likely to be scheduled for the end of
October/ beginning of November with the ARA provisionally to be signed 11
December. SJ noted the observance by the Company of the UK Corporate
Governance Code requirements and the need for an appropriate level of
transparency;
A key judgement would be whether to prepare the accounts on a going concern
basis. The wording of a signed letter of support will be an important factor to
consider;
A recommendation to the Board had been agreed that PwC be re-appointed as the
Company's external auditors FY23/24.
A discussion followed, initiated by the Chairman, in relation to the potential
deterioration of the first line in relation to risk management, whether controls
were sufficiently robust and whether adequate managerial capabilities were in
place. OW advised that he was newly appointed as acting Chair of the RCC and
agreed that improved risk reporting was required in respect of detailing significant
risks and that there was confusion in the business as to the roles of the first,
second and third lines of defence. OW noted the prevailing culture and the impact
of this on employees’ approach to risk. At the Chairman’s request, OW agreed to
attend ARC as an observer going forward.
There was discussion in respect of the timing for payments under the FY22/23 STIP
scheme with AB and OW noting the impacts and sentiments on employees of the
delay. Given the external audit process had not been concluded, however, no
payments would be made at this time.
3.3 Remuneration Committee
AB advised as follows:
The Remuneration Committee meeting from earlier in the day had focused on
governance matters including progress against the Simmons & Simmons
recommendations and the recommendations contained in the A Burton report.
The Remuneration Committee’s Terms of Reference had been revised to take into
account recommendations in the reports, and these would be returned to the
Board for consideration. A remuneration authorities table had been prepared,
which would be published to Diligent to assist Remuneration Committee members
and management;
Correspondence had been prepared for issue to the Shareholder seeking approval
in relation to outstanding schemes and matters; and
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© The metrics for the LTIP 23/26 had been considered and the shareholder was due
to be consulted on shareholder value, so elements could be reflected in the LTIP
23/26.
Nominations Committee
The Chairman advised that the Committee had met earlier in the day and the principal
item of business had been considering the recruitment process and timings for the
incoming Postmaster Non-Executive Directors. The Chairman noted the importance of
maintaining a level of continuity on the Board given the number of new Directors who had
recently joined, however advised that this needed to be balanced against the expectations
of Postmasters. The Chairman advised that the Nominations Committee had taken a
decision that one Postmaster Non-Executive Director would step down from the Board in
June 2024 and that the other Postmaster Non-Executive Director, subject to Shareholder
approval, would step down in June 2025. The process in relation to the recruitment of the
Postmaster Non-Executive Directors needed to be returned to the Nominations
Committee for consideration. EJ queried the criteria for which Postmaster Non-Executive
Director would stay on; the Chairman replied that this was being examined. AB noted the
knowledge the Postmaster Non-Executive Directors had built up and queried opportunities
for the Postmaster Non-Executive Director who stepped down from the Board in June
2024 to continue to contribute. The Chairman advised that K McEwan had raised the
provision of mentoring.
CEO Report
TABLED and NOTED was the CEO report. Key discussion points were as follows:
NR spoke of the need to establish operational stability given the difficulties over
the summer;
¢ NR advised that trading remained solid and that he was hopeful of strong
Christmas trading, especially in light of the level of operational preparedness.
Consumer confidence had improved; the relationship that customers had with
their local Post Offices as opposed to the Company continued to endure;
* NRnoted the increase in employee sickness and absence and advised that stress
related absence was an issue;
¢ NR spoke to the number of employees who could be required to give evidence in
some form to the Inquiry and detailed the work being undertaken in relation to
Project Phoenix;
¢ NR advised that commercially it was a very significant time for the business with
the fulfilment of the mails strategy being worked through, the entallinhraweit ofa
rurober of banking hubs and shortly entering into negotlatig
rrent Banking Framework. EJ saw this as very I positive and queried
would go live in branch. OW undertook to find out; ow
© NR spoke to changes to the Group Executive and the appointment of the Chief of
Staff who was looking at the Company's operating model, governance fora and
RACI.
ACTION AB noted the impact of the Inquiry on employees and queried whether other
organisations who had been through statutory inquiries could be contacted to share their
learnings of the support they had provided to their employees. NR took the point however
advised that most statutory inquiries were not in operational businesses, however NR NR
would look to this approach and any learnings that could be extracted.
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ACTION In relation to the operation of banking hubs, SI referenced the current process of
approaching Postmasters local to the intended banking hub first to establish if they were
interested in running the banking hub. SI queried, if the local Postmasters were not
interested, what was the approach after that on offering the opportunity to other M Roberts
Postmasters. NR advised he would ask M Roberts to respond on this point.
SI shared his experience of receiving correspondence that a Drop and Collect was opening
0.5 miles away from one of his branches and advised that he had not received a courtesy
call ahead of this. SI shared his view that the process did not feel collaborative. NR took
SI’s point in relation to Postmaster engagement.
SI queried whether an approach had been settled in relation to the counterfeit Scottish
notes. NR advised that he was due to meet with RBS shortly however in the meantime the
only kit we had for this was located at the cash centres. ACTION EJ queried how a
Postmaster would know that they had accepted a counterfeit note. KS advised that she
would pass this query to M Roberts.
M Roberts
ACTION SI noted the RMG failed collections from Christmas 2 years ago and queried
contingency planning for this ahead of Christmas trading. NR advised his expectation that M Roberts
this would be part of the Christmas operational planning and that he would take this up
with M Roberts.
EJ queried whether analysis had been completed in respect of the impact of the Drop and
Collect rollout on local branches. EJ referenced the Evri rollout and whilst he was very
supportive, was concerned about potential volumes ahead of Christmas. OW advised that
approximately 300 — 350 branches had been identified as potentially becoming inundated;
if this occurred services could be switched off. EJ replied that he would like to look at this
the other way and how the demand could be fulfilled. That’s said, EJ shared his concern
that Evri were not completing on their SLA currently.
ACTION EJ noted that the ATM rollout was behind budget as it was behind schedule. EJ
queried whether the rollout was likely to exceed budget. NR advised that he would check 9 Woodley
on this.
ACTION In relation to PUDO, SI advised that it remained difficult to differentiate between 0 Woodley
acceptance and collection and stickers could assist with this.
SJ noted that there was a lot of positive news in relation to the Company however queried
what more could be done to get this into the public domain. SJ further queried whether
the right support was in place. NR replied that it was difficult as the press wished
predominately to speak to us about the Inquiry, compensation and remediation. Our
trade press was quite good however and NR was not uncomfortable about the level of
support provided. BT queried whether internally and externally we needed to remind
people of the positive work that was undertaken, for example, in relation to restorative
justice and that this was a different Post Office, particularly as against the prosecutions
phase of the Inquiry. NR agreed and advised that he had spoken to R Taylor about this.
AD noted the recent graduates who had joined and queried what steps were being taken
to develop diverse talent so as to ensure a diverse talent pipeline was established. NR
advised that OW would speak to this.
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Sl asked about ongoing work to identify individuals who remained in the business who had
worked previously on matters that were now under remediation. NR spoke to this; if any
allegations of misconduct were made then investigations would be undertaken. OW
advised that a panel had been convened of OW and K McEwan to look at these cases.
Finance
Financial Performance Report
TABLED and NOTED was the P5 Financial Performance Overview.
TM and AP joined the meeting at 12:46. Key discussion points were as follows:
¢ APoutlined PS financial results including the level of Postmaster remuneration and
spoke through reasons influencing performance;
e ADnoted the strong performance year to date however queried what was driving
higher costs which could potentially erode trading profit. AP replied that many of
the cost challenges were timing differences and expected in the second half of the
year; there was a risk that some of these would not be achieved so the budget
may not be met. Currently the Company was within the annual budget, however.
KS outlined the establishment of a new Group Executive Sub-Committee, the Opex
Committee that would assist management to sight proposed cost increases that
were not in the budget;
¢ Following a query from EJ, the reasons for performance in relation to Western
Union were discussed as well as the anticipated trajectory for Travel;
LG noted the change in forecast for the potential security headroom breach and
queried what had driven the change in forecast. AP replied, referencing reduced
spending on SPM. Discussion followed as to the need for a security headroom
waiver still to be in place for December;
The Board provided positive feedback on the revised form of reporting.
AP left the meeting at 13:09.
Funding and Going Concern Update
TABLED and NOTED were the following papers:
(i) ‘DBT Funding Update’; and
(ii) ‘Linklaters Advice’.
Key discussion points were as follows:
¢ TM outlined the process and progress of the funding submission, noting the split in
the funding request for interim funding for SPM and the Inquiry, the briefing
sessions held with the Shareholder, and the due diligence undertaken with
Interpath. AD queried the quantum of the increase in Inquiry and Remediation
Unit spend. TM replied. A second funding application in relation to SPM was
anticipated for early 2024 following the outcome of the Accenture review.
ACTION Discussion followed in relation to providing the Shareholder with a -
demonstration of R2. TM advised that he would take this point away;
¢ BT queried whether the accounts could be approved on a going concern basis
when only part of the funding required would be receipted for SPM. KS replied
that the interim funding request would cover costs up until £1 I
high-quality letter of support would be required from the Shareholder. BT queried
further that the going concern period was up until the end of 4
and not all the current funding requests for SPM went up to this period. TM
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the disclosures;
¢ The Board received written advice from Linklaters dated 22 September 2023 and
met with Linklaters to discuss that on 25 September. Taking into account that
advice and discussion, and with regard to the matters discussed at the meeting,
including the progress with agreeing a letter of comfort from the Shareholder, the
Board confirmed their view that
Increase in Working Capital Facility Usage
TABLED and NOTED was a paper, ‘Working Capital Facility Increase for peak trading period
FY23/24’.
KS spoke to the paper. BT queried whether the length of period for the temporary increase
was longer than previously sought. KS advised that it was the same period as applied for
previously. LG questioned the potential wider utilisation purposes of the Working Capital
Facility. TM advised that the potential wider utilisation was more about alignment with
the { R _
The Board RESOLVED to APPROVE temporary increases in the utili
DBT Working Capital Facility from { IRRELEVANT for the periog
Transforming Technology
SPMP Review - Update and Observations (Verbal)
CB joined the meeting at 13:50. Key discussion points were as follows:
* CBnoted the progress that had been made on SPMP from a technological
perspective and advised that RTP had been combined with NBIT and together they
were now SPMP. SPMP was being run as a business change programme not just
an IT programme; this gave CB some comfort that the programme would deliver
for Postmasters;
© CBnoted the approach taken to NBIT was based on modern methodologies as
opposed to the approach taken historically of outsourcing; this represented a
significant change in approach;
¢ Employees and contractors on the programme had been through some difficult
times in the past weeks with different team members leaving given revised
resourcing plans. More Company employees on the programme were required and
it was imperative to make sure that the team were motivated and understood
what needed to be achieved and how. Given previous issues the culture was very
risk adverse; it was very difficult however to run a programme of the size of SPMP.
if every decision was pushed up. Skills gaps and the ability to attract new
employees onto the SPMP was considered;
The progress and possible outcome of the Accenture review was discussed;
¢ BT queried CB’s assessment as to the suitability of the build to match business
requirements and noted the concern that had been raised that aspects of the
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current system were becoming replicated on the new, and it was not always clear
why. CB noted the significant amount of time that had been spent with
Postmasters to check the requirements prior to and during build, shared his view
that the overall scope was clear, and advised that opportunities to improve the
efficiency of the flow of transactions were being taken when identified;
CB advised that a new SPMP sub-committee of the Group Executive had been
formed, chaired by OW, meeting fortnightly. Programme fora beneath this was
being reviewed to ensure coherent governance;
CB noted a communications plan was being reviewed in relation to SPMP and
emphasised the importance of engendering an open sense of communication.
6.2 SPMP Funding Request
TABLED and NOTED were the following papers:
(i)
(ii)
“Strategic Platform Modernisation Programme (SPMP) Funding Request’; and
‘Appendix 1 - Shareholder and Board Briefing Summary’.
Key discussion points were as follows:
TM spoke to the paper advising that the funding request was reflective of the
reduction in SPMP spend, with costs to be reduced across all areas, however still
achieving the milestone of R2 in 5 branches by March 2024, which would set up a
trajectory to extend R2 into 50 locations by the end of 2025;
EJ queried the number of counters referenced in the paper, which was less than
the current level. TM replied that even if the number of branches did not change,
the under-utilised counters would be removed;
Attracting talent onto the SPMP was discussed; CB shared his view that the right
talent existed within the market, and we had partners so it could be a multi-
pronged approach;
LG queried whether there were any elements of spend between now and March
2024 that could wait. CB replied, outlining the support required for the 2-5
branches where R2 would be live and retention costs to retain knowledge. TM
advised that there would also be training costs for the Postmasters and their staff
in branch in respect of R2;
AB queried the proposal to pause on the development of Drop and Collect. TM
advised that the scope of SPMP had been refocused however there was still some
proposed work to invest in Drop and Collect. AB queried the impact on revenue if
further investment in Drop and Collect was not progressed at this time. TM
replied that forecast income was predicated on the current Drop and Collect
proposition. SI queried what an enhanced Drop and Collect would compose. TM
replied that this would contain an enhanced mail proposition;
EJ referenced contractual commitments for hardware and noted that some
hardware had already been delivered. CB advised that the team were undertaking
analysis to establish if any of the kit could be used now. EJ queried whether there
was a risk that the kit may not be fresh and up to date when SPMP was deployed.
CB replied that there was a risk, however we could resell if we needed to;
AD queried the status of the service contracts with Fujitsu. CB advised that it was
intended to come to the October Board seeking approval for both contracts to be
extended out until March 2025.
The Board RESOLVED that:
(i)
Funding in the amount of in for the continuation of SPMP for the period
from 27 September 2023 up until 31 March 2024 be and is hereby APPROVED;
and
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(ii) Authority be delegated to the Group Executive, who in turn delegated to the
Investment and Approvals Delivery Group, to authorise the drawdown of the
funds mentioned in (i) be and is hereby APPROVED.
TM and CB left the meeting at 14:37.
Ethos Programme
TABLED and NOTED was a paper, ‘Ethos Programme’.
Key discussion points were as follows:
® OW spoke to the paper noting:
- the criticisms made in the CU in relation to the culture of the Company;
- how with the Inquiry there was a level of paralysis in relation to decision
making;
- there were concerns that under performance was not addressed and
conversely that we were not able to provide reward in order to hold onto our
best people;
- _ issues around whether we had become short termist;
- _ the use of consultants and contractors and whether we had become too
reliant on third party assistance;
- a significant amount of progress had been achieved since the CU and HI
however perhaps not cohesively, and with too much of a view to the Inquiry;
rather than the Inquiry being a beneficiary;
- culture had been owned by the People team not the executive and the
executive needed to own culture. 5 work streams were being set up, one of
which was focused on the executive. One of the other work streams was on
governance and ethical decision making;
BT expressed support for the programme however queried whether OW was
adequately resourced. OW replied, advising that there were no plans to build a
large team for the programme and noted the role of T Perkins. BT suggested that
firm like KPMG could provide a secondee perhaps if one was needed, or there
were small boutique firms that could provide support;
¢ OW noted that the programme may identify employees who did not meet the
benchmarks and the Board needed to be ready for this;
e ADshared his perspective that it was very difficult to have a scorecard in place to
measure organisational culture and queried what would need to be seen in order
to demonstrate change. OW advised that this was an area where third party
assistance may be required;
LG queried how support would be provided to employees to make behavioural
changes. OW advised that external support was being considered for this and the
running of leadership programmes to embed cultural changes.
Rebuilding Trust
Inquiry Update
SR, GL and DW joined the meeting at 14:54.
TABLED and NOTED were the following papers:
(i) ‘Post Office Horizon IT Inquiry: Update’; and
(ii) ‘Post Office Horizon IT Inquiry — Appendices’.
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Key discussion points were as follows:
e DW outlined the current position in relation to disclosure and the status of the
response to the current disclosure request, where a further extension may need to
be applied for. DW spoke to the risks at play. A further hearing in January 2025 on
disclosure was anticipated. DW outlined the materials emanating from the back-
up tapes and advised that the team had notified the Inquiry. At the opening of the
Inquiry hearings earlier in the day Sir Wyn had considered adjourning for 3 months
and sharing all the Company’s correspondence on disclosure with core
participants. Sir Wyn had decided not to, however. There were circa 5 million
documents to be reviewed. SJ queried whether were we making full use of
technology. DW replied that we were
BT queried how the Inquiry was processing all the disclosed documents. DW
advised that she was not clear on this however spoke to a possible adjournment of
the commencement of Phase 5 of the Inquiry;
LG queried whether the back-up tapes could have been reviewed earlier if
additional investment had been made. DW replied that she did not think so as the
material was vast; the team had kept the Inquiry informed throughout the
process;
* DWreferenced the next Agenda item and advised that funding was sought for
disclosure remediation costs. The current focus was to keep all disclosure
providers working however no invoices were being approved for payment without
DW and GL signing off;
@ SJ queried the level of resource within the team. DW replied that it was a very
difficult working environment however there were some good people who had
joined the Inquiry team;
BF joined the meeting at 15:10.
Inquiry Funding Request
TABLED and NOTED were the following papers:
(i) ‘Post Office Horizon IT (POHIT) Inquiry Funding Paper’; and
(ii) ‘Inquiry Financial Spend — Supporting Pack’.
GL spoke to the paper. Discussion followed in relation to the risks and assumptions, and
the main cost drivers. AB queried whether the Company’s ownership structure was in part
influencing the approach of the Inquiry; if the Company were privately owned it would not
be able to sustain these costs. AB further queried the reasonableness of requests. DW
advised BSFf were
NR queried whether there was there an
opportunity for the Shareholder as sponsor to raise this. BT suggested that the Inquiry be
advised as to the costs so far of participating in the Inquiry and agreed with comments of
other Board members that there was no optionality in the funding request; the most
important thing was that we fully participated in order for the Inquiry to be proceeded
with and concluded.
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The Board RESOLVED that:
(i) Additional funding in the amount of }: ‘taking FY23/24 costs to t
the continuation of the Inquiry programme for the activities set out in the
paper for the period from 1 October 2023 up until 31 March 2024 be and is
hereby APPROVED; and
(ii) Authority be delegated to the Group Executive, who in turn delegated to the
Historical Matters Funding Meeting, to authorise the drawdown of the funds
mentioned in (i) be and is hereby APPROVED.
RU Update
TABLED and NOTED were the following papers:
(i) ‘Remediation Unit Programme Update’; and
(ii) ‘RU Finance Update’.
Key discussion points were as follows:
© SRspoke to the Secretary of State’s announcement in relation to the up-front offer
of £600,000 in full and final settlement to Postmasters who had had their Horizon
related convictions overturned and the operationalising of this. SR advised of
issues that were emerging in relation to the offer, including challenges from
claimants’ lawyers as to the lack of consultation and alleged breach of privacy. SJ
queried the distribution of potential overturned conviction claims. SR advised that
50% of claimants may be within the £600,000 settlement vicinity. LG outlined the
potential reduction in the amount of the offer over time to account for anticipated
legal costs;
SR advised that there were 4 offers remaining to be made on HSS and 2 were due
to be issued by the end of the week, with the remaining 2 offers to be issued in
October. Discussions had gone quiet with the Shareholder as to whether a HSS
appeals process would be established; SR advised that the Advisory Board would
likely prompt on this, as well as SR.
RU Scope and funding request
TABLED and NOTED was a paper, ‘Remediation Unit Scope and Funding Request’.
Following discussion, the Board RESOLVED:
(i) Additional funding in the amount of { taking FY23/24 costs to! for
the continuation of the Remediation Unit for the activities set out in the paper
for the period from 1 October 2023 up until 31 March 2024 be and is hereby
APPROVED;
(ii) Authority be delegated to the Group Executive, who in turn delegated to the
Historical Matters Funding Meeting, to authorise the drawdown of the funds
mentioned in (i) be and is hereby APPROVED;
(iii) To NOTE additional funding of j=! is forecast for FY24/25 as a result of an
increase in scope and extension
projects.
osts across several Remediation Unit
GLO Disclosure Contract
TABLED and NOTED was a paper, ‘GLO Disclosure Contract’.
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SR spoke to the paper, outlining the form of contract. ACTION KS requested that L Carroll
be sighted on the contract.
DW and BF left the meeting at 15:39.
Procurement Requests
LC joined the meeting at 15:40 with D Harvey.
TABLED and NOTED were the following papers:
(i) ‘Procurement Report’;
(ii) ‘Legal Risk Note — HSF Legal Services’;
(iii) ‘Legal Risk Note — PwC Extension’; and
(iv) ‘Legal Risk Note — CODE RAPP Contract’.
HSE
LC spoke to the paper, outlining the engagement history, and advising that the legal
market was not overly litigious, so it was thought that the possibility of challenge was low.
AD queried implications if the proposal was not approved. GL replied.
The Board RESOLVED:
(i) The continuation in respect of a contract with HSF for a further period of 2
years from 27 September 2023 for the provision of legal services in respect of
the Remediation Unit for the activities as set out in the paper up to a
maximum total contract value of be and is hereby APPROVED;
(ii) The continuation in respect of a contract with HSF for a further period of 2
years from 27 September 2023 for the provision of legal services in respect of
the Inquiry for the activities as set out in the paper up to a maximum total
contract value of e and is hereby APPROVED; and
(iii) Any authorised signatory of the Company be authorised to sign the resulting
contracts and any ancillary documents in relation to (i) and (ii) above.
GL and SR left the meeting at 15:45.
PwC
LC spoke to the paper noting the decision ARC had taken to recommend to the Board the
re-appointment of PwC as the Company’s external auditors FY23/24.
The Board RESOLVED:
(i) The reappointment of PwC as the Company’s external auditors for FY23/24
IRRELEVANT i ye and is hereby APPROVED; and
(ii) The existing contract in place between the Company and PwC be otherwise
modified on the basis as set out in the paper; and
(iii) Any authorised signatory of the Company be authorised to sign the resulting
contracts and any ancillary documents in relation to (i) and (ii) above.
CODE
LC spoke to the paper advising that the proposed cost increase was not committed,
however would place head room into the contract should it be required.
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The Board RESOLVED:
(i) An increase in the CODE contract val the contract term taking
the maximum contract value from }_ IRRELEVANT be and is hereby
APPROVED; and °
(ii) Any authorised signatory of the Company be authorised to sign the resulting
contract variation and any ancillary documents in relation to (i) above.
ID Services
LC spoke to the paper. The Board RESOLVED that the sourcing strategy for the
procurement of an identity services supplier on the basis set out in the paper be and is
hereby APPROVED.
LC left the meeting at 15:48.
Requests with Presentation
Copper Stop Sell
TABLED and NOTED were the following papers:
(i) ‘Copper Stop Sell’; and
(ii) ‘Copper to Fibre Presentation’.
ZM joined the meeting at 15:50. Key discussion points were as follows:
e ZMreminded the Board of the content of the paper that came on this issue in July,
seeking additional funding to account for incr: abling costs. The request for
additional funding had been revised down to i" ind the cost of telephones
was now proposed to be at the Company’s expense;
e AD queried whether there were likely to be issues with taking access. ZM advised
that the contractors were only paid when the work was completed;
@ LG queried the timing for the programme to be completed. ZM replied December
2025. LG further queried how the programme could be sequenced if branches
were closed ahead of conversion to fibre. ZM advised that there was full flexibility
on the sequencing;
* ZMadvised that the programme was part of a wider community plan with
Postmasters. In terms of communication details for branches, SI advised that a
complete data set was required for projects going forward. ZM agreed and
advised that data from this programme would feed into an overall operational
excellence programme;
¢ ACTION SI queried whether the Wi-Fi which would accompany the conversion to CBrocklesby/
fibre would be made available to the Postmaster. ZM replied that a decision had ZMladenov
not been taken on this as yet however would revert with timing for the decision;
© EJ provided feedback that he thought the pre-call to Postmasters in relation to the
programme was very good and that this would contribute to the programme being
better executed and improved engagement with Postmasters over the course of
the programme.
The Boa ESOLVED additional funding in the amount of {« (bringing total project
costs to {imsetevanr! for the items and activities as set out in the paper be and is hereby
APPROVED.
ZM left the meeting at 16:02.
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10.2 Payzone Loan Agreement
TABLED and NOTED were the following papers:
(i) “Payzone Credit Facilities Agreement - Report’;
(ii) ‘Payzone Credit Facilities Agreement — Legal Risk Note’;
(iii) ‘Project Apollo Report and Appendices’; and
(iv) ‘Payzone Integration Exploration Report’.
TL and CS joined the meeting at 16:02. KS spoke to the paper. BT queried the 2% interest
rate which did not reflect a commercial rate. TL advised that the interest rate had been
set using the rate from DBT of 1.2% then building this up to 2%.
The Board RESOLVED:
(i) Entry into a Credit Facilities Agreement between the Company and Payzone
Bill Payments for an amount not exceeding ‘acility A) and not
exceeding. e and is hereby
APPROVED;
(ii) The delegation of authority to the Group CEO and the Interim CFO to finalise
the terms of the Credit Facilities Agreement, in line with the parameters as set
out in the paper, be and is hereby APPROVED;
(iii) Any authorised signatory of the Company be authorised to sign the resulting
Credit Facilities Agreement and any ancillary documents.
11. Noting Items with Presentation
11.1 Board Strategy Away Day — Next Steps
TABLED and NOTED were the following papers:
(i) ‘Board Strategy Away Day — Next Steps’;
(ii) ‘London Economics — The Economic and Social Value of Post Office’;
(iii) ‘DBT Strategic Review - Policy Options Analysis - Part 1’;
(iv) ‘DBT Strategic Review - Policy Options Analysis - Part 2’;
(v) ‘Project Blueprint - 2019 McKinsey Organisational Design Analysis’; and
(vi) ‘Supporting Commercial and Network Reading Materials’.
TM joined the meeting at 16:03 and outlined how actions arising from the Board Strategy
Away Days would be reported back to the Board over the next 6 months. TM drew Board
members attention to the London Economics report and the McKinsey paper, although the
McKinsey paper had been prepared pre-pandemic.
TM left the meeting at 16:09.
12. Noting Items with no Presentation
12.1 Health & Safety Report
TABLED and NOTED was a paper, ‘Health & Safety Monthly Report’. ACTION The
Chairman raised a concern around in branch robberies given increases in cash banking. EJ
highlighted the increased risk of abuse to Postmasters and their staff and noted other
retailers were working on additional safety measures for their staff. KS advised that she
would take these points away. ks/M
Hopcroft
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12.2 OPEX Reductions Programme
TABLED and NOTED was a paper, ‘Opex Reduction Programme’.
12.3 Project Starling
TABLED and NOTED were the following papers:
(i) ‘Project Starling - Postmaster Status Report’; and
(ii) ‘Project Starling — Appendices’.
13. Governance Items
13.1 Establishment of Investment Committee
TABLED and NOTED were the following papers:
(i) ‘Investment Committee Report’;
(ii) ‘Investment Committee Terms of References’; and
(iii) ‘Post Office Limited Matters Reserved to the Board’.
The Board RESOLVED:
(i) The establishment of the Investment Committee as a standing sub-committee
of the Board be and is hereby APPROVED;
(ii) The Investment Committee’s Terms of reference in the form tabled be and are
hereby APPROVED;
(iii) The appointment of A Darfoor as Chair of the Investment Committee and L
Gratton and E Jacobs as members of the Investment Committee effective 26
September 2023 be and are hereby APPROVED; and
(iv) Consequential amendments to the Matters Reserved to the Board in the form
tabled be and are hereby APPROVED.
13.2 SID Role
TABLED and NOTED was a paper, ‘Senior Independent Director role’.
13.3 Sealings Report
The Board APPROVED the affixing of the Common Seal of the Company to the documents
set out against itemsnumbered 2201 — 2222 in the Register of Sealings.
13.4 Future Meeting Dates
The future meeting dates were NOTED.
13.5 Forward Agenda
The Forward Agenda was NOTED. ACTION EJ requested that an update Christmas M Roberts
operational preparedness be added to the October Agenda.
14. Any Other Business
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Feedback on papers
LG requested that the Board papers be released slightly earlier, even if this meant issuing
them piecemeal.
There being no other business the Chairman declared the meeting closed at approximately
16:45.
Date of next scheduled meeting
31 October 2023 9:00 — 17:00.
Chairman
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Voting Results for POL Board Minutes from 26.09.2023 (approved on 31.10.2023)
‘The signature vote has been passed. 1 votes are required to pass the vote, of which 0 must be independent.
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Vote Response Count (%)
For 1 (100%)
Against 0 (0%)
Abstained 0 (0%)
Not Cast 0 (0%)
Voter Status
Name Vote Voted On
Staunton, Henry For 20/11/2023 16:21
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