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HM Government
1 Victoria Street, London SW1H OET
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Patrick O'Sullivan
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CHAIRMAN, SHAREHOLDER EXECUTIVE
I am very pleased to write formally to confirm the invitation to you to become Chairman of
the Shareholder Executive. As you are aware, this role is advisory.
Your term of appointment will begin on 1 March 2012 for a period of two years, until 27
February 2014, unless terminated before that date. Full details of the tems of reference
for the appointment are enclosed.
I should be grateful if you would reply formally to this letter accepting the terms of
reference for the appointment enclosed, and include a list of all directorships or other
offices you currently hold and a note of the names of any companies in which you have
shareholdings or other beneficial interests. Throughout the duration of your appointment, I
would be grateful if you could please keep the Permanent Secretary, Martin Donnelly,
advised of any new directorships, offices or fresh acquisition of shares. This information
will, of course, be held in confidence.
to. offer.vau. this. appointment.
GRO
PHILIP REMNANT —
Chairman
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Department for Business, Innovation and Skills
Terms of reference for appointment of Chairman of the Shareholder Executive
Patrick O’Sullivan
This document sets out your principal terms and conditions of appointment.
1. Commencement of appointment
1.a You are appointed by the Secretary of State for the Department of Business,
Innovation and Skills (BIS) as Chairman of the Shareholder Executive. Your appointment will
begin on 1 March 2012.
2. Duration
2.a Subject to earlier termination your appointment will be for a fixed period of two years
with the possibility of extension. It will run from 1 March 2012 to 27 February 2014
("the fixed period").
3. Job title and duties
3.a You are appointed as Chairman of the Shareholder Executive. The Board will meet
approximately every 2 months and meetings will be held in Central London. The
time commitment is likely to be around one day per week.
3.b As Chairman, your key role will be to provide high level strategic direction to the
Shareholder Executive. Key responsibilities of the post will include:
* lead the Board of Directors, ensuring their effectiveness in all aspects of their
advisory role;
* lead bi-monthly Board meetings in determining future strategy and direction for
the Shareholder Executive;
© facilitate, promote and ensure the effective contribution of all Executive and Non—
Executive Directors and ensure that constructive relations exist between them;
¢ develop a constructive, frank and open relationship with the Chief Executive,
holding him/her accountable for the effective implementation of decisions;
e be actively available for the continued mentoring and support of Shareholder
Executive colleagues;
* maintain and develop successful relationships with the Chairs of portfolio
businesses and to offer mentoring where appropriate;
* maintain and develop robust relationships with the Permanent Secretaries and
senior Government Officials of HM Treasury, the Cabinet Office and No. 10.
3.c You are not an employee. Accordingly nothing in this letter or its annexes shall be
construed as, or taken to create, a contract of employment between yourself and
the Department or Her Majesty's Government.
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4a.
4.b
4c
4d
4e
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Remuneration
Your remuneration will be £40,000 a year. This will be paid monthly in arrears.
You will be notified in writing of any change to your remuneration.
This appointment is classed as an “Office Holder” for tax and National Insurance
purposes and, as such, under Section 19(1)1 Income and Corporation Taxes Act
1988, the fee is liable to tax under Schedule E and attracts Class 1 National Insurance
liability.
Please notify the Shareholder Executive (address in Paragraph 4.f), by completing
Annex 1, if you would like the remuneration from this appointed role paid into a
particular bank or building society account.
Your remuneration wilt not attract any eligibility for or benefits from the Principal Civil
Service Pension Scheme.
Expenses and Subsistence
4f
49
4h
The Department will reimburse all reasonable expenses (including travel, subsistence
and other expenses) properly and necessarily incurred in respect of your appointment.
A completed Travel and Subsistence form together with supporting receipts should be
sent to Sharon Archer, Shareholder Executive, Upper Ground Abbey 1, Victoria
Street, London SW1H OET.
As an “Office Holder’, payments made to you in respect of your travel and subsistence
expenses to and from the usual place of work for this appointment are taxable under
Schedule E and also attract Class 1 National Insurance liability (this is not likely to be
the case for activities in relation to this appointment which take place away from the
usual place of work). However, the amount you receive for travel and subsistence in
these circumstances should be equivalent to the amount you actually spend. The
Department has therefore entered into special arrangements with HM Revenue and
Customs which means that effectively it can pay the tax on your behalf by paying it to
HM Revenue and Customs at a special rate. The Department will also pay your share
of the National Insurance contributions that are due.
If you wish to continue to participate in these arrangements, you will need to sign an
agreement with HM Revenue and Customs. The agreement should be that travelling,
subsistence and other expenses paid to you, which come within its scope, would not
form part of your income for tax purposes. This would mean that:
- you would not have to pay tax on these expenses; and
- you-would not be able to reclaim the tax we have paid on your behalf;
- any National Insurance contributions paid on your behalf will not be recorded in
the National Insurance computer system.
If you decide to adopt the agreement for this appointed role, please complete Annex 2
and retum it to the Shareholder Executive (address in paragraph 4.f). If you do not
wish to enter into this agreement, the Department shall operate PAYE in respect of
these expenses in the same way as it shall operate it on the remuneration paid to you.
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5.a
5.b
5.c
5.d
6a
6.b
7b
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Notice
Either party may terminate this appointment before the expiry of the fixed period by
giving one month's notice in writing.
The Secretary of State may terminate your appointment immediately, by giving notice
in writing, if you are guilty of any conduct that means that you are unsuitable to
continue to hold this appointment.
You will receive no notice if this appointment is terminated early by mutual consent.
If the Secretary of State proposes to terminate your appointment prior to the expiry of
the fixed term other than through immediate termination as a result of unsuitable
conduct, you will be notified of the proposal and of the reasons for it, and if appropriate
will be offered an opportunity to make representations before any final decision is
taken. If your appointment is subsequently terminated, you will receive notice in
writing.
Conduct
It is essential that you are, and are seen to be honest and impartial in the exercise of
your duties. You must not allow your judgement or integrity to be compromised or
permit there to arise any reasonable grounds for suspicion as to the compromise of
your judgement and integrity. The Seven Principles of Public Life, attached for your
information at Annex 3, provide good guidance in the standards expected of the
Chairman of the Shareholder Executive.
If you believe you are being required to act in a way which:
- is iegal, improper, or unethical;
- is in breach of constitutional convention or a professional code;
- may involve possible maladministration; or
- is otherwise inconsistent with the Seven Principles of Public Life;
you should report the matter in writing to the Secretary of State.
Confidentiality / use of official information
You are required to exercise care in the use of information that you acquire in the
course of your duties and to protect information that is held in confidence.
You are also subject to the Official Secrets Act 1989.
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8.b
8.c
8.d
8e
8
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Conflicts of interest
You must declare to the Secretary of State or Permanent Secretary, any personal or
business interest which may, or may be perceived (by a reasonable member of the
public) to influence your judgement in performing your functions and obligations under
this agreement. These interests include (without limitation), personal direct and
indirect pecuniary interests, and, any such interests of your close family members
and/or of people living in the same household as you or as your close family
members.
Accordingly, when replying to this letter, please include a list of all directorships or
other offices held and a note of the names of any companies in which you have
shareholdings or other beneficial interests. You should also keep the Permanent
Secretary advised of any new directorships, offices or fresh acquisition of shares.
This information will, of course, be held in confidence.
In this regard, you have made us aware of your position as a non-executive director
of The Bank of Ireland, which has significant commercial dealings with Post Office
Ltd, one of the Shareholder Executive portfolio businesses. In accepting these
terms of appointment, you are agreeing that you will absent yourself from any
discussions (whether at Board meetings or more widely in your role as Chairman)
on Post Office matters which relate to, or could relate to, that relationship. Provided
these procedures are followed, your appointment as Chairman should involve no
conflict with your position at The Bank of Ireland.
You must inform the Secretary of State or Permanent Secretary, in advance of any
new appointments that may impinge on your performance of your functions and
obligations under this Agreement.
If at any time you feel that you may have a conflict of interest in any of the issues to be
considered by the Board, you should bring this matter to the attention of the
Permanent Secretary. If this should occur during a meeting itself you should bring the
matter to the attention of the Board, which will decide whether or not it would be
appropriate for you to withdraw from the meeting.
All information on potential conflicts of interest will be held by the Permanent
Secretary's office and could be disclosed to the public under the Freedom of
Information Act (2000). In entering in to this agreement and accepting this
appointment you, thereby consent to this disclosure.
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9 Declaration of Political interests
9.a You are expected not to occupy paid party political posts or hold particularly sensitive
or high roles in a political party. Subject to the foregoing, you are free to engage in
political activities provided that you are conscious of your general public
responsibilities and exercise proper discretion, particularly with regard to the work of
the Shareholder Executive.
Signed
(Date)
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Annex 1
Details of part time appointees for AMEY to process fees and/or T&S claims
PLEASE COMPLETE IN BLOCK CAPITALS (other than e-mail address)
Members Full Name
Residential Address
E-mail Address
Date of Birth
National Insurance Number
Bank Name
Bank Address
Bank Sort Code
Bank Account Name
Bank Account Number
Signed......sccccescceseseeeseeres
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Annex 2
AMEY Pic
Paramount House
Pascal Close
Paramount Business Park
St Mellons
Cardiff CF3 OLW
lam writing to let you know that:
(* Please sign only under the option you wish AMEY to apply)
(a) I wish to have tax and NICs due on travelling and subsistence expenses I receive
paid by the Department for Business, Innovation and Skills under the PAYE
Settlement Agreement [PSA] they have with HMRC
(b) 1 understand that I will not be entitled to receive repayment of the tax paid on my
behalf in any circumstances.
(c) I will write to let you know if I wish to withdraw from this arrangement. I understand
that in those circumstances this arrangement will cease from 6" April following your
letter to me confirming your agreement to my withdrawal.
“Signed
or
(d) I do not want to have tax and NICs due on travelling and subsistence expenses I
Teceive paid by the Department for Business, Innovation and Skills under the PAYE
Settlement Agreement [PSA] they have with HMRC
*Signed
Date
Name (in block capitals)
Date of Birth
National Insurance Number
Address
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Annex 3 - The Seven Principles of Public Life
Selflessness
Holders of public office should act solely in terms of the public interest. They should not do
so in order to gain financial or other benefits for themselves, their family or their friends.
Integrity
Holders of public office should not place themselves under any financial or other obligation
to outside individuals or organisations that might seek to influence them in the
performance of their official duties.
Objectivity
In carrying out public business, including making public appointments, awarding contracts,
or recommending individuals for rewards and benefits, holders of public office should
make choices on merit.
Accountability
Holders of public office are accountable for their decisions and actions to the public and
must submit themselves to whatever scrutiny is appropriate to their office.
Openness
Holders of public office should be as open as possible about all the decisions and actions
that they take. They should give reasons for their decisions and restrict information only
when the wider public interest clearly demands.
Honesty
Holders of public office have a duty to declare any private interests relating to their public
duties and to take steps to resolve any conflicts arising in a way that protects the public
interest.
Leadership
Holders of public office should promote and support these principles by leadership and
example.
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