UKGI00007866
UKGI00007866
OFFICIAL - SENSITIVE Eo
Department for
Business, Energy
& Industrial Strategy
Date: 23 March 2018
Director General: Mark Russell
Lead Official: Richard C:
Lead Official Telephone:
Recipient To Note / Comment To Approve / Decide
Permanent Secretary xX
POST OFFICE — APPOINTMENT OF TOM COOPER TO POST OFFICE BOARD
Summary
1. On 19 February the Secretary of State agreed to Tom Cooper's appointment to
Post Office Limited’s (POL) Board of Directors. This requires your consent to
extend a Departmental indemnity to Tom, and also agree the terms of his
appointment.
2. In the absence of an agreed POL policy sponsor team and oversight protocol, you
are also requested to approve the reporting regime for POL — proposed by UKGI
below.
Timing
3. Your consent is needed by 27" March, which is the planned date that Tom will
formally join the Board.
Recommendations
4. That you:
e Agree to the terms of the indemnity, as noted in Annex A, and provide Tom with
a signed copy;
e Agree that you are content with the terms of appointment set out in Annex B;
and
e Agree the reporting regime set out below and note the longer-term intention to
clarify responsibilities between UKGI and BEIS.
Advice
Indemnity
5. BEIS is entitled, by its special share in POL, to appoint a non-executive director
(NED) to sit on the Board of POL. This has traditionally been done by appointing
an employee of the Shareholder Executive, and now UKGI to the role.
6. While Tom is appointed to the Board to represent the Department's interests, his
personal legal obligation, in carrying out the NED role, is to act in POL’s best
interest. The role carries considerable personal legal responsibilities, and
consequently, considerable liabilities.
UKGI00007866
UKGI00007866
OFFICIAL - SENSITIVE Eo
Department for
Business, Energy
& Industrial Strategy
7. As set out in both Managing Public Money and in the Civil Service Management
Code, the Crown will generally accept responsibility for civil liabilities of a civil
servant incurred in connection with his performance of the functions of a director. It
is therefore normal practice for Government nominated NEDs to benefit from a
Government indemnity issued by the owning Department. The proposed form of
such indemnity is attached at Annex A. BEIS Legal and BEIS Finance are content
with this indemnity. If this letter is acceptable, it will require your signature.
Terms of Appointment
8. Tom will be appointed by a a letter from Post Office (Annex B). If you are content
with its terms, it will be signed by Post Office and Tom.
9. The terms of the appointment reflect POL’s standard NED terms, although we
have carved out special arrangements to reflect Tom’s role as a shareholder
representative director. These seek to balance Tom’s duties to the company with
his duties to Government, and the potential conflict that can sometimes cause.
10. These new terms mean that he is able to disclose matters to Ministers and
Officials (and other relevant governmental bodies where appropriate) that would
otherwise be confidential, and is not required to disclose to POL matters that he
has learned as part of his wider duties within Government, which may have
relevance for POL. The wording is set out in para’s [X] in Annex B.
11.Tom’s role also differs from other NED’s in that he is not remunerated for it.
13.
Division of Responsibility between BEIS and UKGI
14.As you aware UKGI and BEIS are having wider discussions about the division of
responsibilities for BEIS assets between them. Currently UKGI retains
responsibility across the board for POL, including policy matters. The identity of
the BEIS policy sponsor for POL is still subject to discussion
15.We intend to work with the BEIS policy sponsor, once the identity of that person is
settled, to establish a more formal POL-specific oversight protocol.
16.In the meantime, you are requested to approve a regime of meetings attended by
Tom Cooper and the shareholder team from UKGI to update you and the Minister
responsible for POL. The agenda would include discussing financial performance,
key personnel issues, progress on key risks including litigation, network
performance and compliance with the network access criteria, and key initiatives
involving POL with BEIS or other departments. Meetings would take place at a
minimum quarterly or on an ad hoc basis as required.
Annexes
A. Indemnity
UKGI00007866
UKGI00007866
OFFICIAL - SENSITIVE od
Department for
Business, Energy
& Industrial Strategy
B. Terms of Appointment