RMG00000340
RMG00000340
ROYAL MAIL HOLDINGS PLC
BOARD PERFORMANCE EVALUATION QUESTIONNAIRE - 2006
How satisfied are you........
Q1 that the matters reserved for the Board’s
decision (attached) are appropriate?
Additional Comments:
1. Presumably the attachment should be updated to read £20m rather than £10m in a
number of places. Also the “Combined Code” section on “Material Contracts in the
Ordinary Course of Business” is a bit ambiguous. Does the £10m (£20m) limit only apply
to acquisition and disposals? If not then £20m is too low for an operational contract that
may run over five years.
After three years of solid performance and improvement I would have thought that the
Board should be ready to delegate broader powers to the Chief Executive to execute the
strategic plan and deliver against the annual budget. Management should be spending
more time seeking advice and guidance on strategic issues from the Board, rather than
asking for approval on specific matters which are sometimes taken out of context.
2. I think the board sometimes goes beyond those areas listed in the attached document.
Q2 that adequate management controls are in
place — eg financial authority levels?
Very Satisfied Dissatisfied Very
Satisfied.
c
Additional Comments:
1. Good controls are in place but delegated authorities need formalizing to reflect the new
Group structure, while at the same time removing ambiguity and de-linking from the
concept of “budgeted” vs “unbudgeted” expenditure.
2. Probably not enough delegation on medium sized capital projects.
Q3 that risks are adequately managed?
Very Satisfied Dissatisfied Very
Satisfied Dissatisfied
Additional Comments:
1. Have not seen a Board level review of risks in my time on Board, but they are covered
fully at Audit Committee.
2. Yes but the new MDs need to become comfortable with the work of their own risk
management teams.
3. [have yet to attend a formal risk review but that may be because I am still new (and also
do not attend Audit Committee).
4. Making progress, but given next stage of transformation plan about to start, need to
reset and refine key processes (eg Capex).
5. Progress is being made on ‘mail integrity’, and generally things are being tightened up.
However we have come from a low base.
Need to ensure recent criticisms by Postcomm are adequately addressed.
Need to have more regular debate regarding contingency plans for uncertain risks.
I believe we could make Risk Management more overt than it is, with a regular slot at the
Board.
PND
Page I
RMG00000340
RMG00000340
ROYAL MAIL HOLDINGS PLC
BOARD PERFORMANCE EVALUATION QUESTIONNAIRE - 2006
How satisfied are you........
Q4 that sufficient time is devoted to testing and
developing future business strategy?
Very Satisfied Dissatisfied Very
Satisfied Dissatisfied
Additional Comments:
1. Probably due to the amount of time spent on recent negotiations with Postcomm/the
government, I don’t think enough time has been spent here. The strategy awayday will
help.
2. The time spent at the Board is adequate; however, the process is too much in the hands
of McKinsey; there is not enough debate and discussion with senior line managers to
achieve validation and buy-in prior to presentation to the Board. At the Board itself the
discussion is a bit superficial and based on insufficient market, customer and operational
information. It tends to be focused on specific short to medium term problems. There is
not enough focus on the very real issue of the medium term shape and survival of the
business as a whole in the face of competition and changing social and technological
factors.
3. Yes increasingly so.
4. There has been little of this since I joined but hopefully the strategy awayday(s) will help
address this.
5. Satisfied — but the Board must recognise that there are strategic issues requiring further
debate — see NXD’s independent review April 2006.
6. Still too little understanding at board of customer contract wins/losses/dynamics.
7. Improving, however conversations are obviously being held about GLS future without
proper discussion.
8. OK -—I think funding issues have tended to overshadow this and therefore we
could/should do more.
9. Will see how awayday debate goes but maybe should have quarterly review of how
annual strategic review is proceeding.
10. I do believe we spend a great deal of time on the future and rightly so.
Q&5 that sufficient time is devoted to current
business performance?
Very Satisfied Dissatisfied Very
Satisfied Dissatisfied
Le GRO_
Additional Comments:
1. It might be helpful to have a periodic (6 monthly?) “deep dive” into current business
performance.
2. The reporting is now effective and the discussion appropriate.
3. Yes, just about right.
4. Sufficient time is spent, but hopefully the new CFO will be able to add value to the
monitoring process.
Q6 that the Board meets sufficiently frequently?
Very Satisfied Dissatisfied Very
Additional Comments:
1. Good frequency and length.
2. Perhaps slightly too frequently, particularly when the regular schedule is disturbed.
Page 2
RMG00000340
RMG00000340
ROYAL MAIL HOLDINGS PLC
BOARD PERFORMANCE EVALUATION QUESTIONNAIRE - 2006
How satisfied are you........
Q7 that Board agendas are tackling the right
issues? Very Satisfied Dissatisfied Very
Satisfied Digsatistied
Additional Comments:
1. We have rightly focussed on these items most material to the business (Govt/reg.
Negotiation) — it would be good going forward to spend more time on business issues.
2. Yes at the moment as Financing, Shares and People have been the key questions.
However we need to spend more time on the medium to long-term future of the
Company.
3. Mostly, but need to develop further plans re pensions and strategic productivity.
4. Again improving, but we do flip from great detail on some aspects/topics to very top level
discussion about other topics eg IR vs GLS.
Q8 that the Board is given sufficient information
to take sound decisions?
Very Satisfied Dissatisfied Very
_Satisfied
Additional Comments:
1. In general briefing is very thorough and effective — my only issue is with the budget,
which was presented rather late, and with insufficient support.
2. Yes, but we must watch a tendency for investment papers to focus on the detail and miss
the strategic rationale for a particular course of action.
3. Excellent.
4. Legal input still too weak.
5. _Itis a process of continuous improvement.
Q9 that the Board is sufficiently aware of
developments in the regulatory environment and
postal markets? elt, _Salsfed —Dissalsfed Very
i wn GROenpennnnnnd
Additional Comments:
1. Excellent.
2. Progress being made in giving more competitor information.
3. Though we need to now focus more on competitor strategies/models.
4. Very well briefed with Alex Smith being an excellent addition in this area.
Q10 with the standard of board papers?
Very Satisfied Dissatisfied Very
'
Additional Comments:
1. Very good — concise and informative!
2. Most are very good. Quality improving perhaps a template(s) would help.
Q11 with the administration of the Board —
minutes, circulation of papers, performance of the
company secretary’s office, etc?
Very Satisfied Dissatisfied Very
Additional Comments:
1. Very good.
2. Always keep me informed, papers available pre-weekend.
3. We still produce our papers too late and I think the action sheets are issued a little late.
However again improving.
Page 3
RMG00000340
RMG00000340
ROYAL MAIL HOLDINGS PLC
BOARD PERFORMANCE EVALUATION QUESTIONNAIRE - 2006
How satisfied are you........
4. With two executive meetings and Holdings Board per month Holdings papers on late
Friday or Saturday are not ideal!
Q12 with the quality of debate at board meetings?
Very Satisfied Dissatisfied Very
Satisfied Digsatistied
[a GRO)
Additional Comments:
1. Excellent — informative and value adding. Would like to hear more from the Executive
team.
2. The debates are always useful and the non-executive viewpoints add a great deal.
However, in some cases the executive directors get little opportunity to contribute
effectively.
3. Improving.
4. The Chairman ensures a very high standard with all members expected to contribute.
Q13 with the chairmanship of board meetings?
Very Satisfied Dissatisfied Very
Lo Dineatiing
Additional Comments:
1. Good leadership — allows active debate with everyone participating. Summarises
proactively and well.
2. Allan is excellent.
3. Allan continues to do a good job.
4. He is a very good Chairman who commands respect, but also creates an informal but
disciplined environment, where challenge is expected and welcomed.
Q14 with the role, composition and performance
of board committees?
Very Satisfied Dissatisfied Very
Satisfied Dissatisfied
Additional Comments:
1. Good level of participation at Audit Committee.
2. lam uncertain as to exactly what appointments have to be validated by Nominations
Committee but it feels that it occasionally gets involved in too much detail — e.g. actually
interviewing BU MD's direct reports and direct involvement in agency bonus structures
with DTI.
3. Getting better, but still some way to go.
4. The balance of getting all interested parties involved in decisions and speed of decision
making is still not right. I think we should re-visit the depth to which the committees
review/approve executive actions.
5. Getting better all the time, but with an opportunity to get the processes working more
effectively.
Q15 with communication from the board and its
committees about their activities to the eaeteg “ST Dlewioted ve ad
Management Team, Company employees and
others?
26k) Gko. ]
Additional Comments:
1. Not sure I have visibility of this ....
2. It would be helpful to better structure the communication to GET, the Executive Teams of
the Business Units and more generally to the Senior Leader Population.
Page 4
RMG00000340
RMG00000340
ROYAL MAIL HOLDINGS PLC
BOARD PERFORMANCE EVALUATION QUESTIONNAIRE - 2006
How satisfied are you........
3. [have seen relatively little in my short time here.
4. There is still a lot of scope for improvement here. 1. better communication with opinion
formers. 2. clarify that Board decisions are for implementation not further debate.
5. Still some isolated examples of committees bypassing management.
6. Don’t really know the answer to this. It seems there is a gap in what is said nationally
and what managers do locally.
Q16 that directors are sufficiently knowledgeable
of their statutory duties and developments in
corporate governance best practice? aatieg ‘Smeted Diseased NON
I
Additional Comments:
Q17 any other comments?
Any other general comments:
1. The business needs a step change in performance to keep running.
2. Still a lot to be done!
3. It is very difficult to monitor such a diverse and disparate organisation. However we
should give more consideration to ensuring standards of style and behaviours are
upheld.
4. I believe it is a high performance board where the NED’s and ED’s work effectively
together to extract best possible value.
Page 5
RMG00000340
RMG00000340
ROYAL MAIL HOLDINGS PLC
BOARD PERFORMANCE EVALUATION QUESTIONNAIRE - 2006
MATTERS RESERVED TO THE BOARD
STATUTORY REQUIREMENTS
Approval of half year and full year accounts
Approval of financial forecasts to the DTI
Approval of any significant change in accounting policies or practices on the
recommendation of the Audit Committee
Appointment or removal of the Company Secretary
Appointment or removal of auditors on the recommendation of the Audit Committee
COMBINED CODE REQUIREMENTS
Approval of major capital projects (with costs in excess of £49m20m)
Approval of material contracts of the company in the ordinary course of business (the
acquisition and disposal of assets in excess of £40m920m)
Approval of contracts of the company not in the ordinary course of business (including all
strategic acquisitions or joint ventures where the transaction total is in excess of
£40m20m)
Approval of major investments, including the acquisition or disposal of interests of more
than 5% in the voting shares of any company or the making of any takeover bid
Approval of risk management strategy including internal control arrangements
MANAGEMENT
¢ Approval of the Company's commercial strategy
e Approval of the Company's strategic plan and annual operating plan
e Approval of plans for senior management development and succession
« Approval of changes to the Group’s management and control structure, including major
restructurings
Approval of main postal price changes
Approval of overall pay policy for staff and agents
Establishment of Board committees, their terms of reference and membership
Approval of the health and safety policy
Approval of the environmental policy
Approval of the equal opportunities policy
MISCELLANEOUS
Appointment of specified individuals to authenticate the Royal Mail Holdings seal
Adoption of a new company seal
Approval of amendments to trust deeds of the main Royal Mail pension schemes
Appointment and remuneration of the chairman and trustees of main Royal Mail pension
schemes
Page 6