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MINUTES OF A MEETING OF THE BOARD OF DIRECTORS OFPOST OFFICE LIMITED HELD ON TUESDAY 29
JANUARY 2019 AT 20 FINSBURY STREET, LONDON EC2Y 9AQ AT 11.45 AM
Present: Tim Parker Chairman (TP)
Paula Vennells Group Chief Executive (PV)
Ken McCall Senior Independent Director (KM)
Tom Cooper Non-Executive Director (TC)
Tim Franklin Non-Executive Director (TF)
Shirine Khoury-Haq Non-Executive Director (SK)
Carla Stent Non-Executive Director (CS)
Alisdair Cameron Group Chief Financial and Operating Officer (AC)
In Attendance: Jane MacLeod Company Secretary (JM)
Veronica Branton Head of Secretariat (VB)
Debbie Smith Chief Executive - Retail (DS) (items 6 & 7)
Owen Woodley CEO - FS&T (OW) (items 6, 8 & 9)
Cathy Mayor Finance Director, Retail (CM) (item 6)
Colin Stuart Finance Director, FS&T (CS) (item 6)
Martin Kearsley Banking Director (MK) (item 7)
Chrysanthy Pispinis Director - PO Money (CP) (item 8)
Will Nourse Fenchurch (WN) (item 8)
Meredith Sharples Director — Telecoms (MS) (item 9)
Rob Houghton Group CIO (RH) (item 13)
Jeff Lewis CIO — FS & Digital (JL) (item 13)
ACTION
1. ‘WELCOME AND CONFLICTS OF INTEREST
A quorum being present, the Chairman opened the meeting.
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.
2. RE-APPOINTMENT OF NON-EXECUTIVE DIRECTORS
The Board APPROVED:
© the re-appointment of Ken McCall as Senior Independent Director of Post Office for a
period of three years from 29 January 2019 until the Board meeting occurring
approximately three years after that date
¢ the re-appointment of Carla Stent as a Non-Executive Director of Post Office for a
period of three years from 29" January 2019 until the Board meeting occurring
approximately three years after that date.
3. MINUTES OF PREVIOUS BOARD AND COMMITTEE MEETINGS INCLUDING STATUS REPORT
The minutes of the meeting of the Board held on 27 November 2018 were APPROVED and
AUTHORISED for signature by the Chairman.
4. CEO REPORT
4.1 Paula Vennells introduced the report and invited questions.
4.2 Anumber of issues were raised, including:
«the impact of a Brexit “no deal” on data sharing. It was reported that the Information
Commissioner's Office (ICO) had issued guidance on data sharing and as the data
controller our data sharing requirements should not change, but that we were monitoring
the position
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© whether we remained on track with RM negotiations? It was reported that we intended
to seek a mandate from the Board on RM at the March Board meeting. There had been
no change in RIM's priorities for the new contract. PV was due to meet with Rico Back in
advance of the March Board meeting and it was thought helpful to continue these senior
level discussions and keepa focus on our main priorities in the new contract. The same
issues remained in discussion and it was noted that RM had issued a second profit warning
today and shares prices had dropped by 10%.
The Board NOTED the CEO’s report.
FINANCE
Financial Performance Report
Al Cameron introduced the report and highlighted a number of issues, includingthat:
© performance had been encouraging. Mails and banking were offsetting
underperformance against plan from Telco and MoneyGram. The automation of the
banking deposit process had driven up the volume of transactions
© poor budgeting of a number of staff costs would run to the end of the financial year; we
were focussed on making sure that these errors did not happen again
e the new retail operations structure had been announced. The HR structure was being
changed and the consultation on this would start later in the week
* the Telco margins were flattening out. The regulatory environment was tougher. The end
of the Fujitsu contract and development of adifferent partnership model would improve
our returns significantly. Current returns were not sustainable for a number of reasons
which would be discussed under the Telco strategy item later on the agenda
¢ depreciation levels were higher than budgeted as estimates had not been sufficient. This
had been the first year we had included depreciation figures in the budget
© higher staff costs had been driven largely by contractor costs on three projects that
had not been budgeted for
© we had underspent the growth fund. Our hypothesis for the last two years had been that
we are underspending on marketing and that the growth fund would bring the marketing
ideas to life. This had not proved to be the case and Emma Springham, the Chief
Marketing Officer, had been asked to force rank all marketing spend requests, including
those for Bol. We were attracting people to the PO website but our conversation rates
were insufficient and we were considering spending more on marketing in this area
McKinsey had been engaged for a nine week period to help PO in the organisation design
(OD) work that would drive the design of the operating model for the business post DMBs.
It would be a difficult and changeable period in which we needed to be able to work as
flexibly as possible and support the franchise network. For example, there are currently
about 150 were employed in HR but we needed to outsource elements of work such as
payroll which could be simplified if staff were on standard contacts. While costs needed
to be cut, capabilities also needed to be built to allow us to serve clients and customers.
Anumber of points were raised, including:
e that there was a strong argument for investing more in marketing and getting a good
return on this. This was an important strategic issue and the Board should have an in agenda.
depth discussion on the marketing strategy at the most appropriate point during the year
eit would be helpful to have more commentary onthe growth fund. It was reported that
we would not have a growth fund for the next financial year but would be investing more
in the brand fund over the next few weeks Todo:
e that as we had discovered that McKinsey had been engaged on work for RM we should Executive
take a view on the risks of this, obtain confirmation that they were using completely
different teams, and consider whether the McKinsey team should be stood down todo: ac
whether we should consider charging RM less for processing online transactions, to raise
especially as we wanted to set up our online operations quickly? with Ms
VB to add
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network strategy and capability would be critical and we needed to understand how agile
our network would be and have clarity on our network strategy over the next couple of
years. We would be managing a franchise and the success of this would determine the
long-term sustainability of the business. We needed a fundamentally strong mails
business and a robust model
«it was requested that information on cash declarations be added back into the report It todo:
was reported that the levels were steady at around 90% AC
«that it would be helpful to include commentary on the Payzone Bills Paymentacquisition
* it would be helpful to understand what one or two other POs or retailers were doing to
make their network operations agile and drawing on technology to keep costs low. It was
reported that this formed part of the McKinsey work
that an interim update on Identity would be brought to the Board. ME/ VB
The Board NOTED the Financial Performance Report.
5.2 Budget Update 2019/20
Al Cameron introduced the report and highlighted a number of issues, including:
¢ that we had included assumed trading profits for 2019/20
* aconversation would be needed on tightening the range of profits that were included in
bonus calculations
© major changes were reflected in the changed assumptions on trading profits but not
minor BAU issues which we expected to work within. A “no deal” with Bol had been
assumed as that had seemed the most likely outcome at the time
© we thought we should have a cost target
¢ senior leadership capabilities had improved but capacity remained an issue.
Anumber of points raised, including:
« that we would need to be rigorous on our commodity cost structure but with a number of
additions and subtractions
¢ that we needed to understand the efficiencies that had to be driven, versus elements such
as regulatory driven compliance requirements. We also needed to look at where we could
eliminate or automate work. Central costs needed to reduce and revenue increase with
more investment behind the brand. It was requested that our central costs were reported '? 4
e whether granularity about products would be included in the budget. It was noted that
that would be included
that it was surprising that non staff costs were not going down. It was agreed that these
costs should be coming down.
5.3 UKGI Quarterly Report
Al Cameron introduced the report and highlighted a number of issues, including:
«that less had been spent than forecast in Q3
* —anumber of material projects were not delivering the benefits we anticipated at the
time we had anticipated. This included Project Everest through which we were changing
some of our committed spend with Fujitsu from opex to capex and the rollout of new
printer cartridges to branches. The latter had been designed to reduce costs and
generate fewer calls while the opposite had been true because a message was being
received that the cartridge was empty when it was not
¢ _ significant spend was associated with DMB franchising process. The benefits from this
programme were flowing through but it continued to draw some public criticism
¢ that we did not include a contingency fund
¢ BEIS would be focussed on the £445m spend over the three year period. This was a cash
flow forecast. It did not include some non-cash spend, the costs associated with the
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Postmaster litigation spend’ and £26m that had not been spent from last year’s budget.
The £445m had been forecast based on what we thought we could investin change
without borrowing. That figure would be higher now because of higher trading profits.
© that the contract for Successfactors had been entered into speedily because of a
licensing issue. It was an imperfect system and we did not think we needed the
additional functionality available at additional cost. We were too small a customer for
SAP to give us sufficient attention and while we would need to use the system for the
foreseeable future we were not confident that they were the right long-term partner for
us
e that the redundancy figure of £34m was higher than AC had expected and he would be
scrutinising the figures.
Anumber of points raised, including:
© whether there had been challenges to test that the money could be spent during the
quarter, to prioritise the requests and to make sure that the benefits were going to flow
through? It was reported that this testing process took place at the Investment
Committee
© whether the BEIS finance team were more comfortable with the reporting now being
provided? It was reported that this was the case but that we had yet to work through
the change prioritisation plan. AC noted that further work was needed on investable
growth projects for next year. An insurance acquisition had not been included in the
change fund and £6m had been included for Identity rather than the £9m which would
have allowed us to more off the Digidentity platform in the short term.
The Board:
¢ NOTED the contents of the paper, including the approach of total change spend and
the confirmations to BEIS
¢ APPROVED the request of £25.9m funding for Q4
© DELEGATED AUTHORITY to the CEO and CFOO to finalise the precise details and
supporting documents with UKGI.
6. RETAIL AND FS&T QUARTERLY REPORTS
6.1 Retail Report
Debbie Smith introduced the report and highlighted a number of issues, including:
that Mails income and banking had driven strong performance in P9. Home shopping
returns were up 29% and click and collect up 44%, while some competitors had seen
declines. Greater engagement in branches to drive customer care and targeting the 250
branches which had the highest volumes of parcels had supported growth
automated transactions for RBS and Lloyds had driven up banking transactions and we hac
on boarded two banks
Payzone PB performance was currently adverse to budget; the Co-op resale was the main
driver of this but we were addressing the issues with Allpay. Scottish power
would go live as a client in June 2019 and a number of additional clients were in the
pipeline
* RM had issued a second profit warning. Letters performance had been down 8% with
GDPR and Brexit cited as the biggest drivers. UK parcels had been up 6%. The
negotiations on the new contract were on-track and we would be meeting RM next week.
* DMB franchising was taking place at a rate of one branch a day. Opposition to franchising
remained in some quarters with vociferous objections to the closure of the York and
Kendle DMBs
* Discussions had taken place with Alex Chisholm, the Permanent Secretary at BEIS, during the summer of 2018 about the
potential costs associated with the Postmaster Litigation.
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* changes had been announced to the field team structure last week. Sales managers
would have responsibility for approximately 100 branches, while areamanagers would
have responsibility for approximately 10 branches. This was designed to drive
performance by supporting agents. Branches would receive visits from area managers
twice a year and data would allow them to target particular branches, for example where
too much cash was being held or where a higher volume ofcalls were being made than
the norm which might indicate a training requirement.
Anumber of points were raised, including:
« whether we had a views of the number of customers we lost because of queues? It was
reported that to have a robust idea of this you would need to be able to measure footfall
versus transactions. What we did know was that our wait times were coming down and
that SSKs were working much better. Staggered posting dates at Christmas had also been
helpful. We were seeking to improve performance further through automation and
simplification. For example, the labels system we had introduced which drove efficiencies
as well as bringing us younger clients. It was asked whether there were other ideas we
could consider such as a “happy hour” with cheaper prices to encourage use of off peak
service?
* whether there would be a turnover target for agents? It was noted that a balance had to
be struck here because we also needed to ensure compliance and avoid too much churn
within the agent community which was costly. It was suggested that we could develop a
view of what returns should be generated within a geographical area
© whether commons problems or themes could be reported back through the sales and
area groupings and if resolving these would be part of the sales and area managers’
objectives? It was reported that this was built into objectives and that we also wanted to
identify strengths within PMs who could support and train other PMs. Ultimately we
would like to be able to employ sales and area managers who had experience of running a
PO
¢ which companies were benefiting from Paypoint losing business? It was reported that we
did not have full figures for this yet but we knew that DPD were performing well and
Yodel poorly
* how PO’s 3% growth compared with the market? It was reported that it was too early to
judge and that we still needed more data
© that it would helpful to have an update on where the Payzone BP numbers stood
compared to what we had expected. It was reported that income from rail companies
was £100k behind plan but that we had known this was a risk and had factored this into
the acquisition price. We were beginning to design the TOM for PayzonePB
© whether the number of branch openings planned was too optimistic? It was reported that
aclear plan was in place and that we were confident in delivering in all but 9 cases where
we did not have an opening date yet; however, these dates should be confirmed by 9
February 2019
areport back on Payzone BP branch performance and how we were driving this was DS
requested after the first 6 months of trading.
6.2 FS&T Report
Owen Woodley introduced the report and highlighted a number of issues, including:
that the next FS&T report to the Board would include the completed work on developing
the FS&T Strategy. Pieces of strategy work were taking place in each part of the business,
including insurance capability.
¢ FS&T was performing slightly ahead of the re-forecast. Savings had performed strongly.
Travel money was broadly in line with expectations but Brexit was driving uncertainty in
customer behaviour, as was the case for MoneyGram. Mortgages were a tough market
in which to operate because of reduced margins
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Telco. All players in the market was reporting downturns. We were proposing to invest
in fibre as a protective measure
. general insurance was performing well but there were challenges for travel, which was
affected by the general malaise in the travel market
© progress with the potential Ancile transaction had been delayed, partly because of the
concerns about TIF, which was their underwriter. We needed to accelerate work on
alternative acquisitions. Impaired travel was still a critical part of our pathway to being
no 1 in travel insurance
* — that Customer Hub numbers were significantly behind where we had hoped to be. The
FRES app had been disabled in December 2018 and some customers had since migrated
to the PO app. An analysis of Customer Hub was being brought to the March Board
meeting. Identity proposition would be ready to add as a vertical in Customer Hubat
the end of March 2019.
A number of points were raised, including:
© whether the problems with TIF were resolvable and could give us scope to purchase
Ancile more quickly and at a lower price, noting the suitable fit of Ancile for PO’s growth
within the impaired health market. It was reported that we remained cautious because
of poor responses from TIF to requests for data
e whether we had a macro view on whether Brexit would deter people from travelling? It
reported that planning had been taking place to prepare for Brexit and that indicators
such as a further profit warning from Thomas Cook, indicating delays in selling their
holidays would have a knock on effect on travel insurance and travel money.
7. BANKING FRAMEWORK 2
7.1 Martin Kearsley joined the meeting and he and AC introduced the report highlighting that:
discussions
en raised bya number of banks
e MKhad been having conversations with the big 5 banks almost daily and there was good
interaction with each of the banks. We should have a clearer picture of banks’ ultimate
intentions in about six weeks’ time. Any bank which decided not to move into Banking
Framework 2 would need to have to informed their customers by 1 July 2019
where banks did have ti
IRRELEVANT H
© our overarching cash strategy was coming back to the March Board meeting and it was
noted that ATMs was the hardest element of the strategy to resolve
© it was AGREED that a progress update on Banking Framework 2 would be provided in Mk
advance of the March Board meeting.
7.2. Anumber of points were raised, including:
© whether we thought the banks would ascribe much
Proposing? It was reported that the different
r icorporate customers was valuable.
“Jwe were proposing for
e able to €
Overall, the
approach we were taking was to show that we would listen, give the banks controls where
we were able to and to demonstrate that we wanted to forge partnerships. We
recognised that individuals were having to brief their senior executives to explain a
and would want to be able to show that they have achieved some
We did not think that the ¢jg ‘ould alter fundamentally who,
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choose to enter Banking Framework 2 or! IRRELEVANT but would help to forge
positive relationships going into the new Framework.
The Board thanked the team, and Al Cameron and Martin Kearsley in particular, for managing
these discussions.
8. Bol PROPOSALS
8.1 Chrysanthy Pispinis, William Nourse and Owen Woodley joined the meeting.
OW provided an overview of the current position in the negotiations. The key contextual
joint was the change in the market in the last two years, leading toa
with anything else a
s far as possible.
The points still being di:
* — the boundaries of
.
"} We had talked to potenti
financial services market and were in discussion with
remaining points on alignment of interests, having already made good progressin this
area
ol had increased their (~ } toaddress this in
the last few days.
CP explained the governance that would be needed to ensure that the new contract operated
appropriately:
© we recognised th: if not
governed appropriately. We needed to make sure that both partners were involved in
delivering the different elements of the work. /” }
‘but it was
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* what the difference was between the two scenarios set out in the paper and the
It was reported that Bol had provided us with a base scenari
IRRELEVANT
TC reported that BEIS were supportive in principle of I
“I should that prove to be the best option. Discussions on this issue
were about to start with HM Treasury. OW repor hat the} }
the! ind
beneficial. It was noted that a separate piece of analysis on Jw... iwas planned, including
exploring the!” looking at what could be done to
address the! IRRELEVANT and achieving synergies through how the sales teams operated.
OW stated that this work would be separate from reaching agreement with Bol on the
wider deal on offer now
© whether there were suitable! IRRELEVANT
that a range off di
stated commitment to reduce these costs byimasmper annum.
it was noted
be a publically
The Board supported management's recommendation to endorse the shape ofthe deal
emerging with Bol and continue the negotiations including that:
* anew potential! IRRELEVANT ___ iwas a positive outcome in the context of the
overall package and noting that there would be the potential for anii Fon the
mutual agreement of both parties, if the new
the partners
: “IRRELEVANT. i
The Board did
Jas part of the work to develop a clear future strategy for
Money. This had the scope to lead to a
. with the likely outcome o'
Management would revert to the Board with the final deal once Heads of Terms had been
agreed.
The Board RESOLVED to DELEGATE AUTHORITY to appoint a new:
Chairman, Shareholder representative, Group CEO and CFOO.
The team was congratulated on their persistence through lengthy negotiations.
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9.3
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TELCO STRATEGY
Meredith Sharples joined the meeting and provided an overview of the strategic options
being considered for the Telco business. The Telco strategy had last been considered by the
Board in mid-2017 at which point the development of the business and the enhancement of a
number of our controls had been approved. Since then, the customer base, revenue and
profit had grown. We had mitigated the risk of home phone regulation by developing a home
phone and broadband base on ADSL. Telco was delivering £29 — 30 m of profit per annum,
with a 1.6% share of the broadband market and the largest wholesale provider of broadband
in the UK.
The market was changing rapidly and the strategic review had been prompted by the
move from ADSL to fibre and with BT working to close down their copper ADSL network. The
contract with Fujitsu would be coming to an end which gave us options for partnering or sale.
We were talking to key players in the market about partnering opportunities and potentially
sale. We would be getting the business revalued formally. In addition, a paper was going to
be produced for the March ARC meeting on how we had dealt with the Telco accounting
error.
Anumber of points were raised, including:
what was the prognosis for fibre? It was reported that fibre to the premise (FTTP) was a
significant investment and that 4% of market was likely to have moved tothis full fibre
FTTP by 2023. 5G was a cellular overlay to this, but required the customer toutilise new
equipment. Our proposed investment to secure an improved fibre offer for our customers
was designed to protect the business over the next few months as we developed our
longer term strategy. It would be obtained through our existing supplier within the curren:
commercial framework
© what was the size of the middle margin with Fujitsu? It was reported that OC&C had
estimated that we would save between £7 and £11m a year by moving to another
provider
¢ whether we could save more money by running the service ourselves? It was thought
that this should be considered as one of our strategic options
e that it would be helpful to understand our customer base and how this compared with
other parts of the business
whether we should be drawing on any additional external expertise to support contractual
negotiations? It was agreed that this would be considered.
The Board SUPPORTED the strategic direction outlined and ENDORSED the next steps
delineated:
1. Continued engagement with existing supplier within the current commercial framework,
to secure an improved fibre offer
2. Ensure the business remains relevant while decision making is taking place, though a
marketing investment in fibre (as an overlay to the current FY19/20 budget)
3. Initiate a formal procurement process to begin market engagement on potential
business models and the associated commercial/execution benefits i.e. enhanced
existing supplier replacement through supplier management to full white label
4. Review possible external expertise to support contractual negotiations
5. Formally update the asset valuation of the Telecoms business.
LEGAL ENTERPRISE OPTIMISATION (LEO)
Jane MacLeod introduced the report, which was seeking the Board’s approval for PO Limited
to lodge an application with the FCA for a change of control approval.
LEO had been scoped fairly narrowly but UKGI had asked us to widen the scope to consider a
number of longer term structural issues, including taking the shares out of FRES and putting
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8
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those into a separate structure in order to be able to enhance our dividend capacity. It was
noted that we needed to consider the position regarding the use of tax losses before making z
decision.
The timeframe for LEO would need to be extended and we were discussing thiswith UKGI.
We had to work through the tax implications of changes as we hada unique VAT arrangement
that we needed to protect and we needed to consider what assurance we need for HMRC
before we effect the corporate re-structuring.
The position with FRES would need to be worked through to determine the shape of the
application to the FCA. The Pol Board had approved lodging the application to the FCA and
making the application did not commit us to making the changes proposed.
TC explained the BEIS perspective on the proposed corporate re-structuring which had
brought to the fore a number of issues and requirements. The Articlesof Association needed
to be updated to make them fit for purpose. We needed to put a Framework Agreement in
place and we need to look at funding beyond 2021.
An update would be provided for the March Board meeting.
The Board RESOLVED to:
APPROVE the submission of the Application to the FCA of the proposed Change in
Control of Post Office Insurance and FRES arising out of the proposed group structure
AUTHORISE the CEO and the CFOO to determine the appropriate time for the Application
to be submitted, in light of the LEO deliverables.
PARENT COMPANY GUARANTEES FRAMEWORK
Jane MacLeod introduced the paper which sought approval of three parent company
guarantees which had been requested by clients of Payzone Bills Payment Limited. The
contracts were operational rather than financial. Approval of a framework of principles for
determining where parental guarantees could be approved by the executive and where they
should be referred to the Board was also sought.
Anumber of points were raised, including:
¢ what the worst case position would be if the parent guarantees were drawn on? It was
reported that the penalties would be the same as set out in the contracts themselves.
The only unlimited liabilities we would agree to were where it was standard market
practice, such as for Intellectual Property, or where it was in relation to liabilities / risks
that were within our control. A governance report went to the Board each March which
included our delegated authorities and an overview of our position on unlimited
liabilities and this would be included in the March 2019 report
* it was recognised that we needed to take a pragmatic approach for the duration of the
current contracts but that where possible we should seek to provide a letter of comfort
instead of a parent guarantee.
The Board RESOLVED to:
¢ APPROVE the terms of the parent guarantees with Thames Water, Anglian Water and
Scottish Power and APPROVE Post Office Limited entering into the three guarantees
substantially on these terms
¢ DELEGATE AUTHORITY to the CFOO and the General Counsel to finalise and approve
the terms of the guarantees and
© — AUTHORISE execution of the guarantees in accordance with Post Office’s usual signing
authorities.
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12.
13.
13.1
14,
14.1
14.2
14.3
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The Board's preference for letters of comfort to be provided rather than parentguarantees
was noted.
POSTMASTER LITIGATION (VERBAL)
Jane MacLeod reported that the judgement on the common issues trial had not yet been
issued. A Case Conference would be taking place on 31* January 2019 but it was difficult to
progress matters further in advance of the judgement. Our communications had been
prepared.
Conversations had been taking place about mediation, which was a standard request by the
court, and we were considering our “red line” issues.
BELFAST EXIT PLAN
Jeff Lewis and Rob Houghton joined the meeting. Moving from the Belfast Data
Centre into Azure reduced the risk of operating from two data centres in the same location,
to a cloud based solution supported by three data centres. It would also improve our
contractual position and allow us to operate with greater agility. It had been difficult to
acquire the right digital capability in Fujitsu but the position had improved andcosts were
being driven down. We were planning to talk to Fujitsu next about how we could re-
orchestrate the Horizon system.
Progress with the exit plan work was discussed. It was reported that the Project teams were
being co-located in Bracknell. Fujitsu were receptive to working as we wanted to and to
making changes. The scope of Fujitsu’s work had been contained to re-hosting which limited
opportunities but also reduced risks and we would acquire benefits as we moved to the cloud.
The Board RESOLVED to APPROVE the drawdown of a further £6.3m of funding, in
addition to acknowledging an ultimate Programme financial commitment of c£36-42m
for the Belfast Data Centre Exit project.
The Board supported the approach of moving from the Belfast Data Centre to Azure, a cloud
based solution, rather than the alternative options considered and set out in the paper.
ITEMS FOR NOTING
Sealings
The Board RESOLVED that the affixing of the Common Seal of the Company tote
documents set out against items numbered 1736 to 1743 inclusive in the seal register
was confirmed.
Health & Safety Report
AC reported that there had been persistent gas attacks on ATMs in Yorkshire with a 150%
increase in the last year. In response, we had been putting less cash in ATMs in this area
overnight and were fitting 750 ATMS with gas suppression kits in the area. We were also
continuing to investigate cash destruction options. Attacks of this kind, especially as PO had
to factor in regular changes in branch locations, played into our concerns about a future ATM
strategy.
Future Meeting Dates
The future meeting dates were NOTED.
Forward Agenda
The forward agenda was NOTED.
BOARD AND COMMITTEE EVALUATION REPORTS.
Ken McCall provided an overview of the Board and Committee evaluation process and the
recommendations flowing from the Board evaluation. An annual cycle of evaluations would
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continue. The ARC actions had already been agreed and the Nominations and Remuneration
Committees would be considering their evaluation reports.
The strengths in how the Board operated had been shown in the scores and the feedback
received. The report had focussed on development areas. The Board had identified a
number of areas where more discussion and greater understanding would be welcome.
Today’s discussions on Telecoms had started that work and developing a greater
understanding of digital identity, our competitors, postmaster/ agent needs and franchising
would follow.
The Board had also requested more updates from thought leaders, management updates on
IT and greater visibility of the management tier below the Group Executive. Papers were
better but more narrative was needed on changes in performance and the drivers for this, as
well as the reasons for changes in spend and timing of delivery.
KM would be facilitating the discussion of the Chairman’s performance after the Board
meeting and a NED meeting had taken place on 28" January 2019 with a second one to be
scheduled during the year.
The next steps would be for the actions to be taken forward as listed in the paper, including a
revised forward agenda for the March Board meeting.
TP would discuss the output from the Board evaluation with UKGI and KMwould discuss the
Chairman’s review with UKGI.
The Board RESOLVED to APPROVE the actions proposed from the Board evaluation as set out
in page 3 of the report.
The meeting closed at 3.00 pm.
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