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Witness name: Nick Read
Statement No: WITN00760100
Dated: 2 September 2024
THE POST OFFICE HORIZON IT INQUIRY
First Witness Statement of Nick Read
on behalf of Post Office Limited in the Post Office Horizon IT Inquiry
1. 1, Nick Read, of 100 Wood Street, London, EC2V 7ER, say as follows:
A. Introduction
2. I am Nick Read, Group Chief Executive Officer (“CEO”) at Post Office Limited
(‘Post Office”) This is my First Witness statement to the Inquiry. As CEO I lead
the Executive team and I am also a member of the Board. I am giving this witness
statement in a corporate capacity on behalf of Post Office, in response to the Rule
9 request dated 2 July 2024 (the "Rule 9(58) Request"). In particular, I address a
number of issues in relation to governance, risk and culture from a corporate
perspective.
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3. I have also provided a separate witness statement in my personal capacity in
response to a separate request made by the Inquiry pursuant to Rule 9 of the
Inquiry Rules 2006, dated 18 July 2024 (the "Personal Rule 9 Request"). I
therefore include my own individual reflections as CEO and a member of the Board
in that statement. I am also aware that the Inquiry has requested witness
statements from the other members of the Board.
4. I have aimed to include within this witness statement evidence relating to all
matters or issues detailed in the Rule 9 (58) Request insofar as the relevant facts
are within my own knowledge. The Rule 9 (58) Request sought evidence relating
to some matters or issues that are not within my own knowledge. In those cases,
to assist the Inquiry, I have been assisted by others within Post Office whom I
name where relevant. The facts in this witness statement are true, complete and
accurate to the best of my knowledge and belief. Where my knowledge and belief,
as set out in this witness statement, has been informed by another person or by
documents that I have reviewed, I acknowledge that person or those documents.
I have been assisted in preparing this witness statement by Burges Salmon LLP
and Fieldfisher LLP (together "BSFF"), who act on behalf of Post Office in the Post
Office Horizon IT Inquiry (the "Inquiry").
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5. This statement is structured as follows:
AY Introduction... cece ce ceee cece cee eeceeeeeeceeeeeeecereee seceeeaecaecaesaceeeeeceeeeeeee seeeeeeeeeenees 5
B: Post Office: Background and Context
Post Office today ..
C: Governance within Post Offic
The Shareholder’s Policy for Post OffiCe@ ..2......0.......cceccecccecee ceseeeeeeeeeeteeeeeteneeeeeeee 20
Recent corporate and other governance changes within Post Office ................ 22
2022 Articles 22... cece eceeceeceecee ceceeceseecesececeeceseesecseeee seeseeseeecseeseeecseceneeeeaee ceeeeeeeeeeee 30
Reflections on specific documents .......... 2... cee ececeeeeee ceeeeeeeeeeeeeeeeeeseeeeeeeeeeee ceeeeees 32
The internal 2022/23 Board and Committee Evaluation papers ........................ 34
Board Evaluations... cccceeeececeee ceceeesceeesesceeesceesevecseeee ceeseecatseeerseeeeereeeeeeeeee eee 34
2022/23 Committee Evaluations
The Audit, Risk and Compliance Committee (“ARC”)
Nominations Committee ............ccccccccececscseses coesseseeeeseseeneeeeeesesesiees eeueseenseeeeeesaeeneeees 40
Renumeration Committee ..............ccececececscseces cseeseseeseseeeescenereeeseeasen eeaeeneneeeseeaeaeees 42
Remediation Committee (previously Historical Remediation Committee) .
Grant Thornton Governance Report.
Commissioning the Report
The GT Governance Report 25 June 2024: Overall reflections ............:cccceeeee 45
Specific reflections on Grant Thornton’s recommendations .............:.:ccceeeeeee eee 47
Board Priority ACtions .............ececeeeececceee ceceseeseesceeeeeceeeeeceeesees seeeeseseeseeeeeeeeeeeees 49
Executive Priority ACtions .............cceeeceeceeeee ceeceeeeeeeseeeceeeeseeseeseeeee coeeeeeeeeeeseeeees 58
Risk Management, Risk Policies and Procedures (GT Governance Report,
Appendix 6)... 61
ARC and Risk Appetite (GT Governance Report, Appendix 6)
RCC and Risk Culture (GT Governance Report Appendix 6)...
Internal Audit and Control Environment (GT Governance Report, Appendix 6) .. 68
Subsidiaries (GT Governance Report Appendix 6) ............ccceeeeeeeeeeee ceeeeeeeeeee 70
CONCIUSION. 0.0... eee eee eeeeeeeeeeeeeee ceeeecececeeeceeeceeecsesceneeee ceeeeeeseeeeeseeeseeeseeeeeeeces eesereeeeee 70
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Most Recent Chair and Board Annual Effectiveness Reviews .
2023/24 Chair Effectiveness Review .
2023/24 GT Board Effectiveness Review
Ethos cultural transformation programme .................:::ecccscese cececeseeeeseeeeeeeeeeeeees 74
Arinuall report ooo... cece ccececececeee ceseeseseeseessescesecsecseeseen coevaeeaenaceeesaesaeseeeeenaeae eeeaeeaeeee 74
Post Office meetings with the Minister for Postal Affairs and senior officials at
DBT and UKGI since 1 January 2024 ooo... ccececccee eeeeeeeeeeeeseeeeeeeeseeeeeees cates 77
Chair Letters
Letter to Henry Staunton
The letter to Nigel Railton .
D. Culture at Post OfF1CO o.oo... ccc cc ceceee ceeeeeeeeeeeseneneeescneecieecs cease ceteceseseeeeeeeeeeeeees 84
Post Office’s Response to the GLO judgments .0..............eceeeeceeee ceeeeeeeeeeeeeeeeee 85
Improvement Delivery Group (“IDG”) 2.2.2.2... .ceecececeecececee ceeceeeeeeseseeeeseeteeeeesenees tees 88
Retail Improvements .................cccceecececes ceeceeeeeeeeeeeeeeeeececeseeeee eeeceeenteseeeeeeeeeeeaeeterees 91
Engagement with Post Office employees «0.0.0.0... cece cee eeeeeeneeeeeeeeeeeneeeeees 91
193. Post Office has taken steps to address and improve engagement between
Post Office Executives and Post Office employees:
GLO Awareness
Restorative justice meetings with VictiMS .........0..0..0. cee ceeeee eee eeeeeeeeeneeeeees 98
ED&I Workstream................ccccccccccccc cece ces ceeeeeeeeeeeeeeeeeeeeseeeiee seececacesesesecesisesesecenetes ceeee 98
Whistleblowing/ Speak Up 00.0.0... cceeccccesesee ceeeesceeeeeeeeeeeeeeeeeececeees ceeeeeeeeeeeeeeeetes 104
Steps taken to address wider cultural issues 0.0.0.0... cece ceeeeeeeeteeeeeees 104
Launch of Ways of Working ..................ccccceeccecee coeeeeeeeseceeeeeseeeseeeeae ceeteeeeseeseeaes 105
Work on Ethics ooo... cece cece ec ceec cee eeeeeeeeeeeececee ceseeecececseecacecseeceeecenees eeeeees 108
The Ethos Programme ..................ceccccececeses ceeseseeeeseeeesesceceeeeeeees ceeeeecseeeeetseeeeeeeeees 109
Evolution of WOW: the Behaviours Framework .............0.0.:.cccccccceeee ceeeeeeeeeeeeeeeee 113
Monitoring the effect of cultural Change .................ccccecceeee ceseeeeeeceeeeeeeeeeeeeeseeee 116
Postmaster SUIVeYS ..0............cccceeceeeeeeee cesses eeeceeseeeeeeeeceeseeeceee caeeeeeseneeseceteeeneteeeeses
Post Office employee surveys
Cultural Conclusions in the GT Governance Report
Actions taken in response
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Staffing and remuneration ... 126
128
E: Conclusions
A: Introduction
6. At the outset of this statement, and on behalf of Post Office, I would like to reiterate
my apologies to every person who has been affected by the Horizon IT scandal. I
sincerely apologise for Post Office failures that have impacted the lives of
Postmasters, their families, and others who have been directly affected .
7. The evidence has shown that in the past, Post Office focused excessively on
profitability and reputation. In doing so, it lost sight of its social purpose, and of the
Postmaster’s central role in fulfilling that purpose. Post Office did not foster a
culture in which people felt able to speak up about their concerns, or in which
senior leaders were sufficiently rigorous in their scrutiny of the business.
8. Post Office is committed to rebuilding the trust of Postmasters. Doing so remains
a key pillar of the Post Office strategy. Rebuilding that trust will require addressing
the failings of the past and building a better Post Office for the future. Post Office
recognises that at times the pace of progress on both fronts has been slow.
9. The Horizon Shortfalls Scheme has not provided Postmasters with financial
redress as quickly as either they or Post Office would like. The process was
designed to deal with each application fairly and appropriately. It has taken longer
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than anticipated in part due to the volume of applications being higher than
originally anticipated and the overly detailed nature of the process through which
these applications must pass.
10.Whilst the years since the Common Issues Judgment (“CIJ”) and Horizon Issues
Judgment (“HIJ”) have seen a significant number of important operational and
cultural changes and improvements within Post Office, much work remains to be
done.
11.In particular, though the reasons are complex and the challenges have been
significant, Post Office has been unable yet to deliver a new and bespoke IT
system for Postmasters. As a result, Postmasters have not yet benefited from the
reduced operating costs (some direct but mostly indirect), speed to market and
usability that the proposed system is intended to provide.
12.Post Office accepts that it has lacked a shared sense of vision and purpose with
its Shareholder. This has negatively influenced the day-to-day running of the
business; undermining the effectiveness of its governance and hindering the pace
of decision-making within Post Office. Post Office accepts that there will be
challenges which it will need to address in order to overcome these issues. In
addition to the governance changes required, Post Office must continue its work
to change and improve its culture. Post Office must continue to enhance its
leadership effectiveness, build a positive workplace, and ensure fairness and
equity in its processes.
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B: Post Office: Background and Context
13.Post Office is one of the United Kingdom's oldest, largest and most significant
retailers. It is the only independent retail postal operator in the world and one of
the largest physical retailers in Western Europe. Post Office plays a crucial role in
communities across the country, ensuring 99% of households live within three
miles of a Post Office. It has a long history of providing vital services to the most
vulnerable, disadvantaged, rural and isolated members of society - through its
cash and banking services, and in person face-to-face support.
14. During times of crisis, Post Office has a particularly important role to play. Post
Offices were a lifeline for many during the COVID-19 pandemic, including staying
open when other service providers closed, acting as a focal point for communities
across the country and making cash and other deliveries to customers isolating at
home. During the cost-of-living crisis, Post Office facilitated over seven million
payments to customers receiving energy bill support, and extended help through
collaborations with Citizens Advice and the British Gas Energy Trust to set up
advisory centres to ensure vulnerable customers who may not have internet
access received information on energy bills. Post Office is proud of its public role
and service. Post Office is aware that, as a result of the Horizon IT scandal, Post
Office has breached the trust that the British public placed in Post Office and
damaged its once proud reputation, and it must work hard to rebuild this trust. Post
Office remains confident that at a local level, postmasters continue to benefit from
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the trust of their communities given the service they provide and consequently
remain a valued and important part of the national infrastructure.
15.Post Office has been an independent organisation since its separation from Royal
Mail Group in 2012. This separation was driven by the Postal Services Act 2011,
which required "each organisation to focus more effectively on its own challenges"
and, in the case of Post Office, for it to "benefit from a strengthened Board giving
increased levels of oversight and challenge".
16.Since separating, Post Office has received more than £2.5 billion from the
Government, to fund the cost of the Shareholder’s policy for Post Office’s network
and to invest in both the modernisation of the network as well as the sustainability
of Post Office’s wider business. These activities, which included the Network
Transformation and Crown Transformation programmes, have helped to improve
Post Office’s financial position significantly; since 2012 Post Office has gone from
losing more than £100 million a year in Trading Profit to 2022/23 when it generated
a Trading Profit of £50 million. This is in huge part thanks to the work of
Postmasters, who sit at the heart of our business.
17.The Network Transformation and Crown Transformation programmes saw large
sums invested in improving the fabric of Post Offices and customers’ experience
of our branches, including very significant improvements in convenience and a
material extension of opening hours across the network. Alongside establishing
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Post Office as a viable standalone entity, these transformation programmes were
a key focus of Post Office and its Shareholder in the years following its separation
from Royal Mail Group, with their scale making this period a challenging one to
navigate alongside running Post Office’s core operations.
18. The improved financial performance achieved following Post Office’s separation
from Royal Mail Group has allowed Government to reduce the amount it provides
to Post Office on an annual basis. This results from Post Office reducing the cost
it faces to deliver the Shareholder’s policy, due to its improved efficiency, but also
by generating more income from its commercial operations, Post Office can also
use these funds to subsidise loss making Post Offices in a way that reduces the
burden on the public purse. Since 2012/13 the subsidy provided by Government,
to fund the cost of maintaining at least 11,500 Post Offices and to meet the Access
Criteria, two obligations placed on Post Office by the Shareholder, has declined by
76 per cent to £50 million a year, as outlined in the 2023 Board Away Day Session
1 slide pack (POL00448415). It has been held flat at this level for the last six years,
declining significantly in real terms.
19.Post Office has successfully delivered these obligations every year since its
separation from Royal Mail Group, with the exception of 2020/21 when due to the
pandemic it was 85 branches short of the minimum 11,500 target at year-end.
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20. Over the same period the retail landscape has changed considerably. Post Office,
together with other retailers, has faced some of the most difficult conditions for
retail in generations including markedly increased digitisation and significant
changes in customers’ behaviours, and more recently a global pandemic and a
cost-of-living crisis. The recent cost-of-living crisis in particular has contributed to
soaring inflation and rising energy bills which has put significant pressure on
Postmasters, impacting the viability of many Post Offices. Today around 4,000
Post Offices are considered loss making for Post Office, with many of these also
believed to be loss making for the Postmasters that operate them.
21.While many businesses and retailers have responded to these challenges by
reducing their footprints, Post Office branches keep their doors open and they
continue to add significant value to communities that rely on them across the
United Kingdom. A Market Financial Solutions report in 2024 found that 91% of
people asked about what makes up a great local high street considered a post
office to be an ‘essential’ or ‘important’ element of a high street. Rural Shop
Reports from 2021-2023 consistently found Post Office to be amongst the most
valuable service offered in their convenience stores or to have the most positive
impact in their local areas.
22. In light of the above, however, Post Office is now finding it increasingly challenging
to meet the obligations placed on it by the Shareholder, to maintain a network of
at least 11,500 Post Offices and to meet the Access Criteria. In particular Post
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Office is finding it hard to identify and recruit new Postmasters and it is also finding
itself having to intervene more frequently to retain current Postmasters, where it
needs to keep a branch open that might otherwise be at risk. As the cost of
delivering these obligations increases Post Office is having to make very difficult
decisions around where it allocates its scarce capital and the activities it must
prioritise.
23.Post Office is not unique in being publicly funded and the funding constraints it
faces are common across the public sector. However, the business’ wider financial
position has deteriorated significantly in recent years. It reported net liabilities of
£799 million in 2022/23 and a total statutory loss of £76 million — which means the
constraints it faces have worsened considerably. Operating as a commercial
business with a social purpose, that continues to be reliant on funding from its
Shareholder, is the reality in which Post Office operates.
Post Office today
24. Following the ClJ and HlJ, and the settlement of the Group Litigation, Post Office
has been working to remediate the problems of the past, ensuring justice for
Postmasters, and rebuilding Postmaster's trust. I set out some of the changes
where relevant to governance and culture below. Post Office has provided a
number of corporate statements in response to requests from the Inquiry. Further
details of the changes which have been made in relation to postmasters,
investigations, governance and Horizon/SPMP and compensation are set out in
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the witness statements of Tracy Marshall (Retail Engagement Director),' Melanie
Park (Central Operations Director),? John Bartlett (Director of Assurance and
Complex Investigations),? Rachel Scarrabelotti (Group Company Secretary), *
Jonathan Hill (Compliance Director), ® Simon Oldnall (Branch Technology
Director)® and Simon Recaldin (Remediation Unit Director)’.
25.Post Office wanted to be in a position where it could demonstrate to everyone,
including the Inquiry, that its change programmes were well progressed, and all
issues have been remediated. The ambition was appropriate, however, regrettably
that is not yet where we are.
26.Since 2019 Post Office has recognised the need for change; however, its
operational and financial capacity to deliver change is finite. Since 2019, Post
Office had an average of 120 change projects running each year and difficult
decisions are made about what to prioritise, which itself must reflect the priorities
set for Post Office by the Shareholder. Where those changes affect how
Postmasters manage their businesses, Post Office must be mindful not to place
too great a burden on Postmasters through the sequencing of programmes
introduced by Post Office.
* WITN11610100.
2 WITN11600100.
3 WITN11190100 and WITN11190200.
4 WITN11120100, WITN1 1120200, WITN11120300, WITN11120400, WITN11120500
5 WITN11110100 and WITN11110200.
© WITN03680200 and WITN03680300.
T WITN09890500.
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27.Post Office is in many ways a different organisation to the Post Office of the past.
However, there is a long way to go. As referred to in Grant Thornton's Governance
Report, which I discuss in detail at paragraphs 74 — 144 of this statement, Post
Office has been operating in a crisis since 2019. Post Office's staff are highly aware
of the catastrophic failures of the past and affected by the ongoing scrutiny of both
the media, Parliament and this Inquiry. As a result, they are often reluctant to make
decisions or take risks for fear of making mistakes. This will inevitably affect the
rate and effectiveness of Post Office’s planned changes. Post Office must move
forward from crisis toward stability.
28.Post Office has commissioned a strategic review of the business, supported by
Teneo — a corporate consulting, strategy and advisory firm ("the Strategic
Review"). The Strategic Review is intended to help Post Office develop a clear
and long-term plan for the future and to align Post Office and the shareholder on
the Shareholders needs and expectations for the future. It is hoped that the
outcome of this review will facilitate clarity on Post Office’s social purpose and how,
within the constraints upon Post Office, that social purpose can be met in amanner
that is economically and commercially sustainable and which recognises the
central role that Postmasters play in fulfilling that purpose.
C: Governance within Post Office
29.Post Office became independent from Royal Mail Group on 1 April 2012 and had
to form its own independent structures and processes for its governance. The
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Grant Thornton Governance Report dated 25 June 2024 (POL00446477) (the “GT
Governance Report’) states that “since 2019, when a settlement agreement was
reached with 555 former or serving Postmasters against POL, it has been
operating year-to-year in crisis mode” ® Post Office agrees with this assessment,
for the reasons set out in this statement, and that further work is required in order
to ensure that it has an effective corporate governance system in place.
30. The day-to-day running of Post Office is inherently challenging, particularly as the
environment within which Post Office operates undergoes structural change.
There have been a range of events from 2020 onwards which have required
significant Board and executive time, both within existing governance processes
and structures as well as requiring new structures. One important element, which
ties many of these events together, is the importance of Post Office’s relationship
with its shareholder, in terms of clarity of its purpose, funding arrangements, and
key appointments. I would summarise those events as follows:
a. The Coronavirus Pandemic
In 2020, the Board was significantly occupied with the response to the
coronavirus pandemic. The executive was split into two parts: one dealing
with day-to-day operations, and one managing the future and exit from the
pandemic, with distinct operational management meetings every single day.
Post Office worked collaboratively with government, who wanted Post
8 POL00446477, page 6.
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Office branches to stay open and be able to continue fulfilling its social
purpose. Postmasters were, understandably, concerned about exposure to
the virus and financial losses. Post Office as a business did not have the
funding to respond to the additional needs such as PPE and hardship funds.
A huge amount of time was spent, ultimately successfully, working with
government to set up additional streams of support for Postmasters.
b. The Inquiry
i. The Permanent Secretary of BEIS at the time initially proposed a 4-
month independent public inquiry which would be forward looking. This
was deemed manageable. As the Inquiry has evolved in size and scope,
this has had significant ramifications for the day-to-day running of the
organisation as it has required considerable additional time and focus
from the Board, the executive and business as a whole.
ii. I There have been several issues which have arisen during the lifetime of
the Inquiry related to its important work which have rightly dominated
executive time. This includes the Transformation Incentive Scheme
(executive bonus scheme), the disclosure failures (and additional
hearings in September 2023 and January 2024), the complexities
around the compensation scheme (such as the taxation of the scheme,
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the complexity of the application and the legal support),? and the
identification codes document.
iii. In addition, a large amount of Board and executive time has been taken
up with preparing for Select Committee appearances and an increased
number of Freedom of Information Act (FOIA) requests and responses
following the ITV drama.
iv. These additional and unplanned for events have meant that a significant
amount of executive time has not been available for day-to-day running
of the business.
c. The Historical Shortfall Scheme (“HSS”):
The HSS was set up in 2020. The Treasury was very clear that Post Office
would have to bear the administrative and operational costs of the Scheme.
As the scale of the Scheme grew, this became crippling for Post Office and
impacted on how Post Office was able support Postmasters.
d. Criminal appeals
During 2021/22, the Board held over 60 meetings regarding Post Office’s
response to CCRC and criminal appeals, its role as a prosecutor, and Post
° In 2019, in designing the settlement of the Scheme, Post Office wanted to make the application process
as straightforward as possible for Postmasters and avoid an excessively complicated legal process. Please
see Simon Recaldin's evidence for further detail about his.
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Office’s response to criminal appeal processes. These were very difficult
and complicated issues, which were outside the expertise of the Board.
This took up additional Board time and it could therefore only offer limited
capacity on strategic direction and oversight of the business.
e. Funding issues
From Autumn 2022 Post Office has faced risks associated with its funding
arrangements, going concern status and wrongful trading position, which
have required resolution with the Government.'® A number of senior
executives in Post Office have spent and continue to spend a very
significant amount of time on these issues.
f. The change in the Chair of Post Office
i. There was a significant interregnum where Post Office did not have
a permanent Chair between Tim Parkers departure on 30
September 2022 and Henry Staunton’s start date on 1 December
‘© For context, Going Concernis an accounting assessment made in the financial statements of a company.
A company prepares its financial statements on a going concern basis unless management either intends
to liquidate the entity or to cease trading or has no realistic alternative but to do so. In the case of Post
Office, the significant liabilities that exist or may arise (contingent liabilities) combined with the relance on
Government to continue to provide financial support whilst not being able to provide uncapped guarantees
around these liabilities, potential or realised, raises a serious question as to whether the Post Office remains
a going concern as the point of signing the financial statements. The position is considered in great depth
each year as part of the financial statements process with a detailed statement included in the financial
statements. Wrongful trading occurs when the director of a company continues to trade when they know,
or ought to know, that there is no reasonable prospect of the company avoiding insolvent liquidation or an
insolvent administration and from the time that they were first aware of this situation (or should have been
aware of the situation) the director failed to take every step with a view to minimising the potential loss to
the Company's creditors.
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2022. Although Henry Staunton was due to start on 1 December
2022, he was absent for a significant portion of this time.
ii. A further period where Post Office was without a Chair occurred
earlier this year following Henry Staunton’s removal as Chair by the
Shareholder on 27 January 2024. Post Office was also without a
Chair until May 2024 when an Interim Chair, Nigel Railton, was
appointed. The absence of a permanent Chair on the direction and
governance of a business, particularly one in crisis, cannot be under
emphasised.
g. The Board
i. There has been a high level of turnover of non-executive directors on
the Board, including those with significant roles, between September
2022 and March 2023. This is further set out at paragraph 39.
ii. Further, Alisdair Cameron was informally away from the business from
March 2023. He was then formally off from May 2023 on sick leave for
2 months at a time. Throughout this period, it was unclear how long he
would be away for, and he left the business in June 2024. The
appointment of the CFO, who is also a member of the Board, requires
Shareholder approval which adds a layer of additional bureaucracy for a
business. This absence has been difficult for the business to manage
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and there is still no permanent CFO. As a result, there remains only a
single executive director (myself) on the Board.
h. Compensation
The Board was also significantly focused in 2023 on compensation. This
included changes to the Remediation Committee (previously known as the
Historical Remediation Committee) which manages compensation.
31.Cumulatively, these additional and competing demands, above and beyond the
day-to-day running of the business, have meant that during this period Post Office
was not able to invest more in the evolution of its corporate governance, although
corporate governance issues were becoming more apparent.
32.In March 2023 there was an exchange of emails between Alisdair Cameron, Tim
McInnes (Strategy and Transformation Director), and me regarding Alisdair’s
concerns about governance (see Email from Alisdair Cameron to Nick Read, Tim
Mclnnes and Ben Foat re The robustness of our governance, (POL00423699)). In
October 2023, Post Office commissioned Grant Thornton to review Post Office’s
governance.'' I set out below how Post Office has started to and plans to act on
Grant Thornton’s recommendations and details of the Strategic Review by Teneo
that is has commissioned.
‘1 POL00446477.
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33. During the remainder of 2024 and into early 2025, there are a few key events which
are likely to impact on corporate governance within Post Office and its ability to
make meaningful changes to its corporate governance arrangements. These
include Phase 7 of the Inquiry, the conclusion of compensation matters, any policy
objectives for Post Office set by the new administration and agreement as to how
Post Office will operate commercially and be funded.
The Shareholder’s Policy for Post Office
34. The last time the Shareholder reviewed its policy for the Post Office was in November
2010 in ‘Securing the Post Office Network in the Digital Age’.'? In light of the time
that has elapsed since this last review and also given the significant changes in Post
Office’s markets over this time, in 2021 Post Office submitted a request to its
Shareholder to undertake a review of its policy for the Post Office, in the form of a
policy or strategy review. This request was supported by the Shareholder and in
2022 a review commenced, initially run within the Department for Business and
Trade (“DBT’) (POL00448435)' but latterly with the support of external consultants .
This work remains ongoing.
35.Since 2010 there have been fundamental changes in Post Office’s markets, in
particular: increased digitisation, the growth in ecommerce and government's policy
” This is available publicly: https:/Avww.gov.uk/government/publications/securingthe-post-office-network-
in-the-digital-age .
‘3 See letter from RT HON Kwasi Kwarteng MP, Secretary of State for BEIS to Tim Parker and Nick Read,
dated 11 March 2022 (POL00448435).
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to go ‘digital by default’; the reduction in letter volumes and growth in parcels, as well
as increased competition within the United Kingdom's parcels’ market; and bank
branch closures and declines in both the prevalence of face-to-face financial services
and in the use of cash. These changes have had a material impact on Post Office’s
commercial operations as well as its social purpose. Combined with the financial
challenges Post Office faced, it recognised that clarity was required on whether the
Shareholder’s priorities had also evolved. This was particularly the case as there is
an inherent tension between maximising commercial outcomes and optimising Post
Office’s social purpose, since the social purpose has a cost which may conflict with
improving Post Office’s commercial delivery. Without this clarity ithas been very hard
for Post Office to set a vision, commit to a clear strategy, prioritise in the right way
and, in particular most recently, secure necessary investment.
36.DBT’s work has been led by its policy team, which was set up in 2019, and Post
Office has worked closely with officials to support this important workstream. Two
phases of this work have been completed to date, led by Grant Thornton. Post Office
understands that a third phase is about to get underway in the Autumn under a
separate tender which means it could be led by a second external consultancy
depending on the outcome of the tender. The first two phases considered the
Shareholder’s current policy position and the cost to deliver this, including whether it
might be possible to deliver it at lower cost, as well as the long-term viability of the
policy position itself, including whether in light of changes in Post Office’s markets
that policy position could evolve. Post Office has separately undertaken work with
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London Economics on how its markets have changed since the Shareholder’s last
policy paper was published, and what this means for the policy ‘value’ Post Office is
delivering, and this has been used as an input by Grant Thornton.
37.For Post Office, a successful review will provide clarity on what the Shareholder
wants from Post Office’s network, supported by alignment across Government on
these outcomes that means it is possible, where required, for Post Office to secure
necessary funding. It is also important that any changes to the policy are ‘future
proofed’ to allow Post Office to evolve its network as its markets and customer
behaviour change in the future.
38.The external Strategic Review that Post Office is undertaking, led by Teneo, will be
complementary to the work being undertaken by DBT, as it intends to set out a future
model for Post Office to deliver sustainably against the Shareholder’s requirements.
This Strategic Review is considering a number of areas including but not limited to
Post Office’s operating model and culture, its product and service portfolio and the
technology it operates across its more than 11,500 Post Offices. It is expected to
conclude in September 2024.
Recent corporate and other governance changes within Post Office
39.A number of changes to Post Office’s corporate governance were addressed in
Rachel Scarrabelotti's Second Witness Statement dated 16 February 2024
(WITN11120200) and her fifth witness statement dated 19 July 2024
(WITN11120500). Below I add some of my own comments and updates in terms
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of corporate and operational governance. I have been assisted in this section by
information provided to me by Rachel Scarrabelotti (Group Company Secretary),
Chrysanthy Pispinis (Chief of Staff) and Simon Jeffreys (Chair of ARC).
a. As explained above, Post Office was without a Chair from 27 January to 24
May 2024. The lack of a Chair was very significant for the organisation, and
the appointment of Nigel Railton has been an important change. From a
corporate governance perspective, without a Chair, certain corporate
governance actions cannot happen, no-one is leading the Board and the
CEO has no reporting line.
b. In September 2023, a new Chief of Staff (“CoS”) role was introduced within
Post Office. The role's main objective is to make Post Office more efficient,
and ensure the right people are working on the right priorities at the right
time. The CoS works closely with the CEO and the Company Secretariat,
as well as across the SEG and the Leadership Team."*_ In December 2023
the CoS refreshed the accountabilities of the CEO's direct reports. This will
be an ongoing exercise as structures evolve.
c. Another core part of the role is to help drive forward operational governance
improvements; these have included the regular capturing and follow-up of
14 The Leadership Team was formed in January 2024 and refers to 23 individual who sit beneath the SEG.
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actions in the weekly executive meetings, and the beginning of executive
subcommittee streamlining.
. The CoS has also helped galvanise priorities for the business, with these
being communicated to senior leaders in the second half of 2023/24 and
then again in early 2024/25, to ensure alignment against and focus on our
key priorities. In addition, the CoS is taking a lead role in operational actions
coming out of the GT Governance Report.
. As set out in Rachel Scarrabelotti’s second and fifth witness statements, the
group executive was reduced in January 2024. This was to focus
discussions, improve the speed of decision-making and create capacity for
me as the CEO to better enable me to run the business. It has introduced
more formal procedures, including on following-up on actions to enhance
accountability. Additionally, the CoS identified that the reporting into SEG
from its various subcommittees was inconsistent. There is now a
standardised reporting template from subcommittees into SEG.
Culture, Behaviours and Performance management — these are set out
below from paragraph 174.
. Additional work on the Board paper template has been undertaken to further
reduce the length of Board papers and to differentiate between papers
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being required for the Board (more strategic) and the Executive (more
operational). Further work is being carried out on the Board papers to
encourage papers to be more concise and distil pertinent information in a
meaningful way, with the Company Secretariat now having the support of
the Chair / CEO in rejecting papers that do not meet the required standards.
This remains an area for continuous improvement.
. The Board protocols have been amended. For example, pre-reading is
circulated a week in advance of each meeting, with no slippage allowed.
The ‘Reading Room’ in the Board pack platform has been closed.
Delegated authorities and matters reserved for the Board were subject to
an annual review in March 2024 and some minor refinements were made.
These documents may be amended again following Teneo’s Strategic
Review and the GT Governance Report.
The Committee Terms of Reference were also subject to an annual review
in March 2024 and may be amended following the Strategic Review. In
addition, as set out in subparagraphs 43-47 below, the ability of the Board
to pass written resolutions is also expected to free up time on the agenda.
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k. Management information is being considered with a view to it becoming
more synthesised, action-oriented and focused providing considerations
around wider stakeholder impact.
I. The recommendations to the Remuneration Committee contained in the
Amanda Burton Report in June 2023 (POL00448769)'> and the Simmons
and Simmons Report in August 2023 (POL00363154) '° (together the
“Remuneration Review Reports”) are complete although the response to
recommendations contained in the December 2023 Grant Thornton
Remuneration Review ("the GT Rem Co Review") (POL00446475) is
ongoing.
m. A number of changes have been made to ARC:
i. ARC is asking management to change the RCC materially to become
a more conventional management risk committee rather than a
group which 'vets' papers which colleagues would like presented to
ARC. This is a major governance change to ensure that the
executive take full responsibility for the identification and
management of all risks. ARC will then be better placed to exercise
oversight over risk and assurance functions.
15 Final Review of the Transformation Incentive Scheme (TIS) (‘the Amanda Burton Report’).
‘6 Simmons & Simmons - Department for Business and Trade - Review of the government relevant to
Post Office Limited's Senior Executive Remuneration Report(the "Simmons and Simmons Report’).
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ii. ARC is reducing the number of people attending meetings to
facilitate a more focused strategic discussion of agenda papers.
iii ARC is reducing the length of agenda papers and requiring
management to avoid simply presenting detail to the committee, and
instead to present reasoned analysis of material along with
management's conclusions and recommendations for the committee
to consider and challenge.
iv. ARC has introduced supplementary short, focused meetings to take
time pressure off the scheduled meetings. These shorter additional
meetings deal with more urgent matters like shareholder funding
requests, developing tax discussions with HMRC, external audit
status reports, and procurement decisions.
v. ARC has asked management to change the description of the most
significant risks which are outside appetite to provide more clarity on
management's view of those risks. '7 The current description -
‘7 Risk appetite refers to the amount of risk Post Office aims to operate within in order to achieve its
objectives and reflects the two-sided nature of risk encompassing both an upper limit (i.e., too much risk
being taken to achieve objectives) and a lowerlimit (not enough risk being taken). Risk tolerance is the
variation from risk appetite that the business is willing to operate within in. Setting the risk tolerance ensures
the business makes risk decisions and manages risk exposures according to established expectations. It
helps clarify what is and what is not an acceptable risk exposure and clarity helps the organisation to know
with certainty what risk exposures it can take and what risk exposures it must avoid. Furthermore, setting
the risk tolerance helps the organisation to evaluate actual risk exposures against authorised expsures
which in turn helps determine whether it needs to do more or less to manage the identified risk.
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“outside of tolerance” - suggests that the risks are so extreme that
they cannot be tolerated and immediate action, however radical,
should be taken to correct the situation. This is not the message that
management intends to convey. The Risk Appetite is the level of risk
with which an organisation aims to operate within, whilst the risk
tolerance is the level of risk the organisation is willing to operate
within, in order to achieve the organisations objectives.
vi. ARC has agreed with the new Investment Committee (“IC”) those
risks relating to technology which will be dealt with by the IC to
provide more capacity for ARC to deal with other matters.
vii. ARC has engaged with management to support a new interim
structure for group assurance which will enable management to co-
ordinate better the various assurance functions across P ost Office,
thereby strengthening governance. ARC has also put additional
safeguards in place to ensure the operational independence of
Internal Audit.
viii. ARC has introduced visits to Chesterfield to strengthen governance
over Finance.
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ix. To strengthen governance ARC introduced the engagement of an
external service provider to review those sections of the 2022/23
Annual Report and Accounts not covered by external audit. This is
unusual but important to enhance oversight over the accuracy of
sensitive information reported publicly.
x. ARC discussed potential governance enhancements with Grant
Thornton at the time of their review and is actively addressing the
remaining recommendations in their final report. 1®
40.Below, at paragraphs 79-145, Post Office’s plans for corporate and operational
governance change are set out in the context of the GT Governance Report.
41.The Strategic Review being undertaken with Teneo will provide clarity on “the
purpose and ambition of the Board to guide efforts and governance design” by
enabling it to “focus on strategic initiatives that foster trust, operational
effectiveness, and provide a clear sense of purpose”, with a clearly defined
purpose and strategy being “critical in providing a unifying direction for the Board,
helping to coalesce the leadership team towards a common goal and driving
efficiency in decision-making due to clearer prioritisation” (see Grant Thornton:
Post Office Limited Board Effectiveness Report dated 19 June 2024 (the "GT
Board Effectiveness Review’), (POL00446476).
18 GT Governance Report, POL00446477.
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42.Post Office is reviewing the redrafted Framework Document from DBT (see the
current Post Office Limited: Shareholder Relationship Framework Document,
POL00362299) which has been transposed into the new Cabinet Office format.
The current version of the redraft is being considered (POL00448772) - this draft
is an iterative process and there will likely be further versions of the draft between
UKGI and Post Office before it is finalised. It was received on 5 July 2024, although
it was originally due to be reviewed by March 2023. There are some important
changes which Post Office is considering, and the redraft which needs to be
checked to ensure it reconciles with Post Office’s Articles of Association and
funding agreement. Further, Post Office is acutely aware that this is a long-awaited
opportunity for governance reform through changes to Post Office’s core
constitutional framework documents, as recommended by Grant Thornton. While
Post Office is aware that UKGI would like this exercise to be completed by 21
September 2024, this timescale would not realistically permit proper consideration
of the required reforms. Post Office also wishes to avoid a situation where Post
Office’s core constitutional documents are revised before the outcome of the
Teneo Strategic Review, whose outcomes could be profound for the business.
2022 Articles
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43. The Articles of Association (“Articles”) were not amended earlier this year
following the Board meeting of 1 March 2024 (POL00447855).
44. At the 1 March 2024 meeting, the Board was asked to consider two amendments
to the Articles as follows (Amended Articles of Association, POL00447857):
a. Article 8.1(AA)(a)(v) — to reflect changes to IFRS 16 on the accounting
treatment of leases, which technically required Post Office in the vast
majority of cases to seek DBT approval prior to entering into a lease or hire
purchase of an asset. UKGI and DBT accepted that this was not the
intention of the Article, and whilst UKGI confirmed that "BE/S (now DBT)
does not intend to bring a claim for a breach of Article 8.1(AA)(a)(v), whether
retrospectively or otherwise,” UKGI and DBT both confirmed that they were
happy to remove this Article.
b. Article 63 — to provide for Written Resolutions for Board business (not
including Board Committees, therefore) to be passed if signed by 75% of
Directors (rather than all Directors), to allow for more efficient and effective
decision-making, particularly given lack of availability of all Directors (which
in effect had meant the Board was unable to conduct business this way
given the absence from the business of the CFO).
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45.Despite the Board paper noting that “the proposed amendment has been
discussed informally with UKGI colleagues, who are supportive of the amendment,”
it is understood that DBT was not in favour of reducing the Written Resolution
percentage. As such, this change to the Articles was not progressed.
46.By way of reflection, the context in which the request for changing the Written
Resolution percentage was made, is important. The absence of the CFO in May
2023 meant that Written Resolutions could not be used for straightforward
decisions because all directors are required to participate and approve written
resolutions unanimously. This meant that additional Board time was being spent
approving items which could have been dealt with outside the Boardroom, as well
as slowing down decisions for the business. With the recent departure of the CFO
(June 2024), Written Resolutions to be approved by all directors are now a tool
that can once again be used to enhance Board and organisational efficiency .
47.As one of the foundational governance documents, the Articles will be reviewed as
part of DBT’s review of the Framework Document (see paragraph 42).
Reflections on specific documents
48.1am asked to consider a number of documents and set out Post Office’s reflections
as to what these documents show about how effective its governance is now. For
ease of reference, these documents are:
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a. the internal 2022/23 Board and Committee Evaluation paper (see below
from paragraph 50 and Board Evaluation Report 2022/2023 dated 6 June
2023 (the “Board Evaluation Report 2022/23”) (POL00447838) ;
b. the GT Governance Report on Post Office’s corporate and operational
governance (POL00446477);
c. the most recent Chair and Board annual effectiveness reviews and the
information that was reported back to DBT on them (see below from
paragraph 146 and GT Board Effectiveness Review (POL00446476));
d. key documents relevant to the Ethos cultural transformation programme
(see below from paragraph 226 and Group Executive Report - Ethos
Programme dated 13 September 2023 (the “GE Ethos Programme
Report’) (POL00447844); Post Office Board Report — Ethos Programme
dated 26 September 2023 (the “Post Office Ethos Programme Report”)
(POL00447845); Post Office Board Report — 3 year People Plan and
People Structure dated 27 February 2024 (the “3 Year People Plan and
People Structure Report”) (POL00447854); Post Office Board Report —
Code of Business Conduct update dated 4 June 2024 (the “June 2024
Code of Business Conduct Report”) (POL00447898); and Code of
Business Conduct (long form) last updated July 2024 (the “July 2024 Code
of Business Conduct (Long Form)”) (POL00447907);
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e. Post Office’s most recent annual report presented to the ARC by Post
Office’s Accountable Officer (see below from paragraph 155 and Post Office
Limited Annual Report and Consolidated Financial Statements (2022/2023)
(the “2022/23 Annual Report” )) (UKGI00044323));
f. details of all meetings Post Office has had with the Minister for Postal
Affairs and senior officials at DBT and UKGI in 2024 to date (see below from
paragraph 163); and
g. the ‘Chair Letters’ provided to Henry Staunton and Nigel Railton (the letter
from the Parliamentary Under Secretary of State, DBT, to Henry Staunton
dated 29 June 2023 (the “June 2023 DBT Letter to Henry Staunton”)
(UKGI00044317) (see below from paragraph 169); the letter to Nigel Railton
has not been finalised by DBT (see below at paragraph 172).
49.1 have been assisted in the following sections by information provided to me by
Rachel Scarrabelotti.
The internal 2022/23 Board and Committee Evaluation papers
Board Evaluations
50. The 2018 UK Corporate Governance Code provides that the chair should consider
having a regular externally facilitated board evaluation and in FTSE 350
companies this should happen at least every three years. It is noted that the board
effectiveness review process, including the results stemming from that, should be
acted upon by the Chair.
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51.Looking back at the recommendations in the 202 1/22 Board Evaluation dated 29
March 2022 (POL00438073) the Post Office was subject to numerous pressures.
In that year, there were over 60 Board meetings, whereas the annual Board
planner drawn up for the start of the financial year had envisaged 8 meetings.
Further, much of that year was spent reviewing critical decisions made by Post
Office regarding historic prosecutions.
52.Indeed, in the Board update dated 24 January 2023 entitled “Board Evaluation
2021/22 actions — progress actions recommendations” it was noted that:
a. “The pressure of historical matters continued to mean that the Board had
insufficient time to focus on strategy and key developments in the business,
notwithstanding the very high number of meetings during the period”,
b. Greater clarity on the role of the shareholder representative “does not
appear to have been progressed during this period”, and
c. Bi-annual discussions on succession planning have been added to the
Board forward planner, however given pressures on Agenda time, these
sessions have not been held as yet.” (However, it is relevant to note that
succession planning is considered in more depth at Nominations
Committee).
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53. Post Office carried out Board effectiveness reviews for financial years 2022/23 and
2023/24. There were two Internal Board Evaluation Papers for the year 2022/23 —
a draft produced in March 2023 (POL00447866) and the final version, the Board
Evaluation Report 2022/23, produced in June 2023 (POL00447838). Another
version, dated July, is substantively the same as the June version (POL00447842).
The Board effectiveness review for 2023/24, the GT Board Effectiveness Review,
was carried out by Grant Thornton and was completed in June 2024
(POL00446476).
54.Furthermore, the GT Board Effectiveness Review notes that “a number of key
development themes highlighted in previous internal and external Board
Effectiveness reviews remain relevant today. The Board needs to establish clearly
why it has not resolved a number of the issues”.'? As mentioned above, this failure
to address certain actions coming out of previous Board effectiveness reviews was
due to circumstances which required the Board to quite rightly prioritise dealing
with the human issues emerging from the Horizon scandal.
55.In addition, there was a lack of stability in the Board from the end of Tim Parker's
chairmanship onwards. Tim Parker had been asked to extend his tenure to
navigate Post Office through the COVID-19 period and this extension ended on 30
September 2022. From 1 October to 30 November 2022 Post Office had no
18 POL00446476, page 9.
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permanent Chair although Ben Tidswell was appointed as an Interim Chair during
this period.
56.This period of instability for the business overlapped with turnover in Board
members in particular between December 2022 and June 2023:
a. Departures:
i. Carla Stent (Chair of the Audit, Risk and Compliance Committee) in
February 2023;
ii. Zarin Patel in March 2023 (as the Senior Independent Director);
iii. Tom Cooper (Shareholder Representative) in May 2023; and
iv. Lisa Harrington (Chair of the Remuneration Committee) in June
2023).
b. New members:
i. Simon Jeffreys (Chair of the Audit, Risk and Compliance Committee)
in March 2023;
ii. Amanda Burton (Chair of the Remuneration Committee) in April
2023;
iii. Lorna Gratton (Shareholder Representative) in May 2023; and
iv. Andrew Darfoor (Chair of the Investment Committee) in June 2023.
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57.This was followed by a busy and difficult period in terms of the amount of work
required by the executive outside of the day to day running of the business
including a number of issues related to the Inquiry such as the Transformation
Incentive Scheme issue.
2022/23 Committee Evaluations
The Audit, Risk and Compliance Committee (“ARC”)
58.The Audit, Risk and Compliance Committee Report - Committee Evaluation
2022/23 dated 16 May 2023 (the “ARC Evaluation 2022/23”) (POL00447836).
was presented to its meeting on 16 May 2023. I should note here that I am not a
Member of the ARC although I am a regular attendee, and I have relied on
information provided to me by the Company Secretariat.
59. There have been a number of changes to the membership and standing attendees
of ARC over the last year. Until May 2024, the executive director who attended
ARC on a standing basis was Alisdair Cameron. Kathryn Sherratt was Interim
Group CFO from 4 December 2023. She was invited to attend ARC from 21 June
2023 although did not actually attend the committee until 25 September 2023. The
current longest serving member of ARC is Elliot Jacobs, who joined the Committee
in September 2022. In other words, at a time of significant change for Post Office,
the entire Committee membership changed.
60.Grant Thornton was looking at ARC at a time when Simon Jeffreys (its current
Chair) was new and Alisdair Cameron (previously a standing attendee at ARC)
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was not present. It is indisputable that the capability of ARC had been diminished
at this point in time. There has been a lack of any executive director support for
ARC since Alisdair Cameron’s departure. This has significantly reduced the
financial and accounting understanding on the Board at a time when there have
been real questions about whether the Post Office is a going concern. Although I
regularly attend ARC, governance would be assisted by an executive director
standing attendee of ARC with a finance and risk background.
61. The evaluation feedback contained in the ARC Evaluation 2022/2023 was that “the
Committee continues to remain effective, despite the headwinds and challenges
faced by the Post Office” (POL00447836). It is noted that unlike at the Board level,
all of the actions arising from the 2021/22 ARC evaluation had been addressed.
An area identified for improvement in the financial year 2023/24 was the “quality
of papers and presentations received by the Committee” (POL00447836) This was
also raised a year later in the GT Governance Report and the GT Board
Effectiveness Review.?°
62.A status update for the 29 January 2024 ARC meeting set out that the actions from
the Committee Evaluation 2022/23 were still in progress including (Audit, Risk and
Compliance Committee Report - Committee Evaluation 2022/2023 dated 29
January 2024 (POL00447852):
20 POL00446477 and POL00446476.
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a. significant improvements have been made to risk reporting, however more
works needed to be done in ensuring coverage and timely visibility of risk
and issues; and
b. templates for papers to the ARC had been circulated, but not all areas of
the business were cross referencing reading room material appropriately.
63.Other changes which had been identified were mostly complete which has
supported Post Office in embedding a continuous assurance model:
a. the ARC reviewing the ‘Forward Plan’ every 6 months;
b. presenters of papers providing explanations to the ARC when their reports
are delayed or were in progress; and
c. papers being more action focused and including more analysis,
interpretation and recommendations.
64.Finally, some remained under consideration including whether a balanced
scorecard regarding Postmaster detriment should be developed and a template
for a one-page top sheet for papers. A further assessment of progress against
actions was planned for May 2024, but did not take place because of other
priorities.
Nominations Committee
65. The Nominations Committee Evaluation 2022/23 was presented to the meeting on
6 June 2023 (Nominations Committee Evaluation 2022/23 dated 6 June 2023
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(POL00447837)). I should note here that I do not sit on the Nominations
Committee, and I have relied on information provided to me by the Company
Secretariat. As with the previous year, and the following year with Grant Thornton,
succession planning was highlighted as being the key area of improvement for the
Committee.
66. The ability to address succession planning has been adversely impacted by the
high turnover of Chief People Officers in the business, on whom much of the
required work rests. The conclusion contained in the GT Board Effectiveness
Review that the current Committee “appears to be very reactionary in its remit
delivery, focusing only on its immediate recruitment, appointment and Board and
NED evaluation remit’?' is a fair one.
67.As set out in the GT Governance Report, actions to address Grant Thornton's
recommendations have been identified, and will be tracked to ensure that they are
effective.*? There is an action tracker which combines corporate governance
actions with operational governance items mapped in on a summarised basis
which will be considered by the Board (see Grant Thornton Governance and Board
Effectiveness Reviews: Recommendations tracker as at 26 July 2024 (the “Board
Action Tracker‘) (POL00448414)). There is then a more detailed tracker for
operational governance due to the additional level of detail.
21 POL00446476, at page 33.
22 POL00446477.
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Renumeration Committee
68.1 do not sit on the Remuneration Committee. I am invited to attend occasionally on
specific issues, but otherwise I do not attend. I have relied on information provided
to me by Karen McEwan, the Chief People Officer. The Remuneration Review
Reports recommended that Post Office undertook a review of governance
structures, processes, and systems at the Remuneration Committee to improve
and record effective decision-making and ensure alignment with the foundational
shareholder governance documents. As a result, Post Office commissioned Grant
Thornton to conduct the GT Rem Co Review, which was completed in December
2023 (POL00446475).
69. The Inquiry will also be aware of the issue which arose in 2023 regarding the
Transformation Incentive Scheme. In December 2020, the Remuneration
Committee agreed a new "Transformation Incentive Scheme" which would form
part of the remuneration package for senior leaders. Under the Transformation
Incentive Scheme, part of the remuneration package for senior leaders was made
conditional on, amongst other things, the achievement of metrics geared towards
the success of Post Office's business transformation plans. The metrics were
intended to align and focus senior leaders on the critical priorities needed to
transform the Post Office. Of the four business transformation priorities that were
identified, one related specifically to the Inquiry. Post Office apologised to the
Inquiry for the way in which this metric was set and measured, by letter dated 6
April 2023. In my letter to the Chair of the Inquiry, Sir Wyn Williams, dated 6 April
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2023, I described these as unacceptable errors. They were caused by failures in
governance.
70. Recommendations from both the Remuneration Review Reports?’ were largely
aligned and were accepted by Post Office. The GT Rem Co Review noted that
Post Office was addressing all nine recommendations “at pace, with two of the
project plans marked as complete and seven in progress”. 4 In addition, the
Remuneration Committee Chair, Amanda Burton added two further suggestions, 7°
both of which were actioned. Grant Thornton has since observed that the
Remuneration Committee is ‘rebuilding trust among stakeholders through
governance policy and procedure improvements as outlined in the Simmons and
Simmons report’.
71.The implementation of the Remuneration Review Reports recommendations (with
UKGI monitoring these) is tracked, with the tracker being presented to the
Remuneration Committee at periodic meetings. The latest tracker from 4 June
2024 shows that all Recommendations are ‘green’.
72. The Remuneration Committee Evaluation Report 2022/23 (commissioned in early
2023) was presented to the Committee’s meeting on 3 July 2023 (POL00447839).
23 The Amanda Burton Report is POL00448769 and the Simmons and Simmons report is POL00363154.
24 POL00446475, page 5.
*° That POL re-engage with the Shareholder and that RemCo should not award any element of bonus
specifically relating to the Horizon IT Inquiry both now and going forward, as outlined inPOL00446475,
page 5.
28 GT Governance Report POL00446477 at page 64.
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This report recommended that the Remuneration Committee focus greater efforts
to ensure that remuneration structures/packages are simplified, that the
Committee could work with management to provide regular feedback on the calibre
of papers and to call out papers that are inadequate, and that the Com mittee could
allocate time annually to review Willis Towers Watson’s (“WTW”) work and
advice?’ (in the past WTW has been involved in some bespoke benchmarking work
for Post Office and more recently were involved in the review of Post Office’s
Reward Strategy). The contract with WTW was extended by a year and comes to
an end in September 2024. Post Office is now tendering for a replacement.
Remediation Committee (previously Historical Remediation Committee)
73.The Remediation Committee Evaluation Report 2022/23 was presented to the
Remediation Committee on 16 August 2023 (POL00447806). The report
recommended that information flows between the Remediation Unit and the
Remediation Committee could be improved; and that the Committee should ensure
that it understands the new Overturned Convictions remediation process,
establishes the compensation principles, and obtains shareholder support for them.
I do not sit on nor attend the Remediation Committee.
Grant Thornton Governance Report
27 POL00447839, page 1.
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Commissioning the Report
74.1 have been assisted in this section by information contained within
contemporaneous documents and provided to me by Rachel Scarrabelotti, Group
Company Secretary and Chrysanthy Pispinis, Chief of Staff On 12 October 2023
Post Office commissioned Grant Thornton to carry out a review and prepare a
report on its corporate and operational governance. A draft Governance Report
was provided on 6 February 2024 (POL00448770) and a revised draft Governance
Report on 4 March 2024 (POL00448771). Some time was required for the Board
to consider and provide comments on the Report and with the absence of a Chair
the report remained in draft. The content did not significantly change during that
period and Post Office did not seek to make significant changes. Following the
Interim Chair's appointment in May 2024 matters moved more swiftly and the final
GT Governance Report was provided on 25 June 2024 (POL00446477). During
this period, the Board digested the findings and recommendations prior to the July
Board meeting where the tracker (referred to below) was considered.
The GT Governance Report 25 June 2024: Overall reflections
75.Grant Thornton has identified that one of the most pressing areas to address is a
purpose/cohesive strategy at the Group level which sets direction and ambition for
the business. The key findings of the GT Governance Report?® can be summarised
as follows:
28 POL00446477.
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a. Lack of a unified purpose and group-wide strategy between Post Office and
its Shareholder;
b. Conflict around the role of the Shareholder versus the Board and
breakdown of the relationship;
c. Leadership capacity;
d. Decision-making forums at Enterprise level lack pace and do not enable
accountability; and
e. Culture — a lack of trust, accountability, and performance management.
76.Grant Thornton concludes that “these issues highlight the need for; a unifying
strategy, greater role clarity through updating foundational governance documents,
streamlined decision-making processes, significant improvements in succession
planning and a cultural shift towards accountability and long-term planning.”?°
77.Post Office accepts the five key findings as set out on page 7. Post Office keeps
its governance arrangements under review, and in light of the GT Governance
Report will be making some changes as set out below.
78.Post Office’s plans in response to the GT Governance Report are set out in two
trackers. One is a combined Board Action Tracker which covers both corporate
governance actions with operational governance actions mapped at a high level
(POL00448414). The Board Action Tracker has recently been combined from two
2° POL00446477, page 7.
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separate trackers (corporate and operational) and updated versions of this will be
provided to the Board on a regular basis. The other is an Operational Tracker which
covers the operational governance actions in more detail and is used by the
Strategic Executive Group (“SEG”). These will be updated on a regular basis as
actions progress. This will ensure that those recommendations which Post Office
has accepted crystallise a positive and meaningful impact on Post Office’s
corporate and operational governance. Post Office provided DBT and UKGI with
GT's reports on 12 July 2024.
Specific reflections on Grant Thornton's recommendations
79. The Report groups its recommendations into eight categories, as follows:
Board Priority Actions
a) Group strategy / ambition
b) Clarity on the role of the Shareholder vs the Board
c) People agenda (Incl. succession planning and reward)
d) Board meeting processes
Executive Priority Actions
a) Division of responsibilities — streamline the accountability chain
b) Leadership capacity and succession planning
c) Strategic / Culture focus
d) Risk Management
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80.In this section I set out brief updates and reflections organised by these topics.
81.At stated above, Post Office has produced a tracker which sets out its action plan
in response to the Report (POL00448414). The combined Board Action Tracker
was shared with the Chair and the Shareholder NED, and their comments have
been incorporated. Grant Thornton also provided comments and the combined
corporate and operational tracker has been issued to Board members. As already
mentioned, both the combined and the operational trackers remain subject to
change as they reflect ongoing pieces of work.
82. The trackers identify the timeframe for each recommendation and the individual
owners who are responsible for taking forward actions. The SEG will be regularly
appraised of progress against the operational tracker. The Board has asked for
reporting on a monthly basis commencing in August 2024.
83.The trackers will be refined and updated when Post Office receives and agrees
other recommendations, such as the outcome of the Strategic Review, and any
corporate governance recommendations from the Inquiry. I have been assisted in
the following sections by information provided to me by Rachel Scarrabelotti,
(Group Company Secretary), Chrysanthy Pispinis, (Chief of Staff) and Tim
Mclnnes, (Transformation and Strategy Director) .
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Board Priority Actions
(1) Group strategy / ambition
84.The GT Governance Report recommended that the Board agree strategic design
principles with the SEG and explore steps to develop a strategy / ambition which
the leadership team can coalesce around, with the aim to address the “tension at
Board between governing for Shareholder value and governing for social purpose,
without a clear longer-term vision to balance these priorities effectively”.°° As part
of this, it was recommended that the Board frame for the Shareholder what Post
Office is about, where it wants to get to and how it is going to meet these aims,
while also taking into consideration the tension between Post Office’s commercial
objectives and its social purpose.
85.Post Office agrees that an essential step in addressing weaknesses in its
governance structure is to agree on its purpose and strategy, and how it will meet
its aims. This must involve the Shareholder and to support this, in May 2024, Post
Office commissioned Teneo to undertake a comprehensive Strategic Review.
Teneo commenced work in early June 2024.
86. The Strategic Review is structured across three principal stages and is intended
to weave together a number of existing programmes of change taking place across
Post Office's business, as well as new activities required to deliver the
recommended and approved outcomes of the review. Once complete the findings
%© POL00446477, page 9.
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of the Strategic Review will be presented to Post Office’s Board and, subject to
their approval, ultimately the Shareholder. The first stage of Teneo’s work
completed in July 2024 and the second phase is already well progressed, with the
final output expected to be delivered in 2024. This final output will allow Post Office
to “frame, prioritise, and guide governance design, decision-making structures,
and inform culture and performance management’, as outlined in the Board Action
Tracker (POL00448414). Post Office will then take on the necessary work to
deliver the approved recommendations, subject to the availability of funding.
87. The Strategic Review involves significant and broad stakeholder engagement at
every stage, including critically from the Postmaster community. The Shareholder
is supportive of the review and there has been engagement with both DBT and
UKGI. The Shareholder NED attends the Strategic Review Steering Committee,
and they were actively involved in setting the direction of travel for the review at
the point its scope was being agreed.
88.The Shareholder’s support will be critical to delivering the outcomes of the
Strategic Review, both in terms of endorsing the recommended actions stemming
from Teneo’s work, providing alignment and a consensus among Post Office and
the Shareholder, but also in enabling Post Office to deliver these actions. This
includes but is not limited to the provision of funding.
(2) Clarity on the roles of the Shareholder versus the Board
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89.The GT Governance Report (POL00446477) draws similar conclusions to
previous Board Effectiveness reviews, in that it recommends greater clarity on the
role of the Shareholder. Whilst the lack of clarity as to the role of the Shareholder
impacts adversely on the operation of the Board, Post Office agrees with Grant
Thornton that the lack of clarity also “extends throughout POL, resulting in high
decision-making costs and a lack of accountability, such as the absence of a
shared understanding regarding the roles and responsibilities’ *'
90. The Board Action Tracker (POL00448414) sets out that UKGI are looking to have
the revised Shareholder Framework Document and Delegations Letter in place in
the near future, and the September Board meeting is being targeted for Board
consideration although as explained at paragraph 42 above, Post Office
anticipates that it will take longer to fully consider the proposals and respond. A
working group is being established at Post Office to support this review exercise
and will aim to clarify any ambiguities across foundational governance documents.
A briefing note on Managing Public Money and the role of the Accounting Officer
was prepared and settled with UKGI and issued to the Board and Executive on 28
June 2024, and training for the Board and executive on these issues is expected
to be delivered on 10 September 2024.
31 POL00446477, page 9.
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91.Post Office held a session in early July on ‘Strengthening the Postmaster voice’,
which considered alternative governance structures. This was led by the Post
Office's Corporate Affairs Director, Charlotte Cool, (Interim) with the Postmaster
Non-executive Directors (“Postmaster NEDs”) attending (Saf Ismail and Elliot
Jacobs), a member of the NFSP, and two external speakers. A follow up session
for mid-August took place on 14 August 2024. The alternative governance
structures considered were mutuals, cooperatives, franchises and the proposal for
an oversight committee. The Strategic Review will also play a role in considering
how some of the recommendations in this category might be achieved. The
minutes of the July and August 2024 workshops were circulated by Charlotte Cool,
the Corporate Affairs Director (Interim) on 16 August 2024 (see email
POL00448773 and attachments: the 2018 Franchise Landscape Report
POL00448774; the Postmaster Oversight Committee Powerpoint presentation
POL00448775; and the executive summary of the Strengthening the Postmaster
Voice meetings POL00448776).
(3) People agenda (including succession planning and reward)
92.The people and culture agenda is regarded as being fundamental to ensuring
change at Post Office, and so is the need to strengthen succession planning and
to ensure effective management of the people agenda is fully accepted, with
actions designed to address this. Please see Section D: Culture at Post Office
(beginning paragraph 174) for further information and reflection.
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93. There are obvious gaps in skills required at Board level, related to the needs of the
organisation, such as technology, and recruitment of NEDs needs to reflect that.
A Board skills matrix has been drawn up, which will inform the upcoming NED
recruitment (POL Board Skills Matrix, POL00447913).
94. Steps have been taken to increase transparency by ensuring that the Postmaster
NEDs have access to Board and Committee papers. However, as with any NED,
there will still be some areas of conflict where papers cannot be provided to
Postmaster NEDs.
95.The GT Governance Report discusses the Postmaster NEDs in relation to
succession planning.*? The GT Governance Report also notes the valuable insight
into the experience of Postmasters that the Postmaster NEDs bring into the
Boardroom*? (with which Post Office agrees).
96.Post Office does not intend to make significant changes regarding Postmaster
representation at the Board level, i.e. Post Office would want to continue with two
Postmaster NEDs on the Board. There is, however, an accepted need to evaluate
and develop the Postmaster NED role as well as harness the voice of Postmasters
further and more broadly within the business.
32 POL00446477, page 20.
33 POL00446477, page 34.
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97.As highlighted by Grant Thornton, Post Office accepts that the Postmaster NED
role does have limitations. Postmaster NEDs are directors and are bound by those
duties and need to consider the interests of all stakeholders. So, while Postmaster
NED contributions are invaluable on the Board, they need to be supplemented by
operational contributions from those who can do so from a management point of
view. On the operational side, Postmaster input is particularly invaluable; the
Postmaster Engagement Director role is a central element of that, and why Post
Office has been holding workshops with Postmasters (see paragraph 196). As set
out above, the focus is on improving the onboarding experience for Postmaster
NEDs. Post Office wants to continue the Postmaster NED role, with improvements
to the selection process and onboarding. The Postmaster NEDs have brought an
invaluable challenge and Postmaster-centric view to the Board. This has brought
the Board closer to current operational issues.
98. The original step down date for the Postmaster NEDs term was June 2024. Both
current Postmaster NEDs have had their tenures extended until June 2025 and
have applied for re-election. Post Office is currently recruiting for two incoming
Postmaster NEDs. Both current Postmaster NEDs were consulted on how to
approach the next round of Postmaster NED recruitment, and based on their input,
the criteria for the role have been rebalanced and made more objective and clearer.
I exhibit a letter to the Minister (Letter to Kevin Hollinrake MP, Parliamentary Under
Secretary of State at Department of Business and Trade dated 7 December 2023),
which seeks consent to commence the appointment process for new Postmaster
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NEDs, and which appends the updated role description and a timeline of the
appointment process (POL00448417).
99.Upon appointment, the new Postmaster NEDs will be provided with a more
bespoke induction, partly assisted by a third party. This follows feedback that the
induction process for the original two Postmaster NEDs could be improved upon.
Particular points of improvement suggested were greater thoughtfulness and
sensitivity given to the background and skillsets of the Postmaster NEDs, as well
as assisting them in further understanding the role of a Board and that of a NED.
Additionally, training on identifying conflicts will be very important.
100. It is important to note here that Post Office also introduced the role of Postmaster
Engagement Director in 2021. The current Director, Mark Eldridge, who is also a
current serving Postmaster, was appointed on 6 December 2023 (see paragraph
191). It is important that this role continues, and also that Postmaster NEDs are
able to bring their experience and perspective to the Board.
101.Reflecting on the level of time and commitment given by the Postmaster NEDs,
Post Office initially expected this would be in line with other NEDs and around 1-2
days a month. However, the experience to date has been that the Postmaster
NEDs have dedicated a much more significant amount of time in their role,
particularly in engaging with operational aspects of the business.
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(4) Board meeting processes
102. A key observation of the GT Governance Report is the “impact that poor MI has on
the effectiveness of discussion and decision making at Board (and other decision-
making forums) thereby reducing accountability and effectiveness within POL’s
governance hierarchy’ .** Post Office agrees with these findings. Some actions to
address improved Management Information ("MI") are already underway (see
paragraphs 39(g) and 39(k) which highlight the changes on board papers
introduced by the new Interim Chair). Additionally, there is new dashboard
reporting for some areas (culture, whistleblowing and investigations, retail and
technology) which will be presented regularly to the Board along with the
Postmaster and Employee pulse and full survey results.
103.1 have set out above at paragraph 39(m) recent changes to the ARC. Updates on
the work of Nominations Committee and Remuneration Committee are standing
agenda items on the Post Office Board Agenda and time is allocated for Committee
Chairs to provide verbal updates. Further, all NEDs have been provided with
access to Nominations Committee and Remuneration Committee materials and
access in Diligent has been updated so that all NEDs (save in conflict situations)
have access across all Board and Committee papers.
104. As set out above at paragraph 39(g)-(h):
34 POL00446477, page 10.
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a. the Interim Chair has requested shorter, sharper and more strategically focused
Board papers;
b. the ‘Reading Room’ will no longer be used;
c. the Board paper template is being updated and will provide guidance to authors on
ensuring the right focus for Board decision-making/strategic responsibilities;
d. the Secretariat are empowered to return papers to authors that do not meet the
guidelines; and
e. matters arising are allocated to an executive member in addition to SMEs to ensure
oversight, accountability and delivery. The Interim Chair has made it abundantly
clear that the expectation of the Board is that all matters arising must be attended
to ahead of the next scheduled Board meeting.
105. Post Office recognises the need to increase trust amongst Board members. In
addition to NED only sessions (informal), Board dinners have been reinstated to
facilitate unstructured dialogue outside the formal setting of Board meetings.
106. Notwithstanding these recent changes, this will be an area for continuous
improvement, including in response to priorities following the Strategic Review and
the evidence, conclusions and recommendations of the Inquiry.
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Executive Priority Actions
(1) Division of responsibilities — streamline the accountability chain
107. The correct division of responsibilities and a streamlining of the accountability
chain are seen as being fundamental in addressing Post Office’s need for change,
and go to the core of the Inquiry’s Terms of Reference requiring Post Office to
“examine the historic and current governance [and whistleblowing] controls in
place at Post Office Ltd, identify any relevant failings, and establish whether current
controls are now sufficient to ensure that failings leading to the issues covered by
this Inquiry do not happen again.”
108. Post Office agrees with the observation made in the GT Governance Report that
“the accountability chain for POL is complex and further complicated by no clear
purpose and strategy from which to performance manage and prioritise efforts. The
web of stakeholders and their related interests in POL has influenced an
unnecessarily multifaceted governance framework at Enterprise level where
resolution to issues has been through layering of Committees and passing
decisions up rather than streamlining the accountability chain."®> As mentioned,
this then places a significant burden on the Board due to matters that should ideally
be addressed at a lower level being pushed up to the Board.
35 POL00446477, page 12.
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109. Structural change will only be effective alongside cultural and behavioural change.
Whilst actions are already underway to address governance design and structures,
which are essential foundations to addressing the identified issues, the timeline for
overall organisational change is a longer one given the need for behavioural
change to make those governance structures work as intended.
110.A wholesale review of the executive level committees that are in place will be
undertaken to assess their utility, terms of reference and membership. The
required streamlining of executive committees will take place between October
2024 and March 2025, and the CoS is responsible for this action.
(2) Leadership capacity and succession planning
111.As with Board succession planning, enterprise level succession planning is also
essential for the long-term sustainability of Post Office. Intrinsically linked with this
is the wider people and culture agenda, including learning & development, equity,
diversity & inclusion, leadership and recruitment.
112. Although some action has already taken place at a senior management level (the
appointment of interim COO, CFO, GC and GC (Inquiry) effective from July 2024,
see paragraph 263(h)), and clarity on purpose from the Strategic Review which will
help to frame the people agenda, Post Office recognises a lot more work needs to
be done.
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(3) Strategic / Culture focus
113. Please see above, as well as the culture section of this statement (section D from
paragraph 174).
(4) Risk Management (Board and Executive actions)
114. A decision was taken by the Nominations Committee at a meeting on 12 June 2024
to restructure Post Office’s risk governance. I was not present at that meeting (I
am not a member but attend occasionally on specific action points), and
information on this topic has been provided to me by Karen McEwan.
115. The restructure will bring together Risk, Assurance and Compliance into a single
function so that Post Office will have a fully integrated view of its risk environment.
A new role of Group Risk and Assurance Director is being recruited to lead the
combined team. That individual will report into the Interim CFO with a dotted line
into the chair of the Board’s ARC to maintain independence. Once a permanent
CFO appointment is made that reporting line will move to that executive role.
116.1 understand that one reason for this decision is that as CEO there are many
demands on my attention, and it is thought that the Interim CFO will have more
bandwidth to receive these reports.
117.1 have received correspondence from Deloitte on 19 July 2024 (POL00447914), to
which Post Office responded on 22 July 2024 (POL00447908), and 31 July 2024
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(POL00448501) regarding this restructuring. This is because the original
restructure included internal audit within the new team and Deloitte had concerns
about this. Post Office has carefully considered this correspondence and Internal
Audit will remain outside of the accountabilities of the new Group Risk and
Compliance Director.
118. Upon appointment, it is intended that the new Group Risk and Assurance Director
will be responsible for responding to the relevant recommendations in the GT
Governance Report,°* including that there should be a root-and-branch review of
Post Office’s control environment and risk management. Specific and pertinent
recommendations from Grant Thornton are dealt with briefly below.
Risk Management, Risk Policies and Procedures (GT Governance Report, Appendix
6°”)
119.1 have been assisted with the below section by the Group Assurance Director,
Anshu Mathur, and the Head of Risk.
120.The Post Office Group Risk Management Policy sets the minimum operating
standards relating to enterprise risk management throughout the Post Office
(POL00447853). The Post Office Risk Management Policy is supported by the
Risk Management Policy Guidelines (POL00447894).
% POL00446477, page 14.
5 POL00446477, page 56.
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121. The Post Office has accepted that updates and improvements are required to the
Group Risk Management Policy, including the refinement of roles and
responsibilities, emphasising the need for independent challenge, reporting
frequency and terminology. The risk management policy will go through the annual
review in October / November and any refinement to roles and responsibilities will
be included within the annual review (when they are confirmed by the business). I
am aware that an independent audit will be carried out within the next 12 months.
122. Grant Thornton concluded that the introduction of Service Now in 2021 is a positive
development for automating risk reporting.°* All Post Office risks (across all levels
of the risk hierarchy) are now identified, analysed, evaluated, managed and
recorded in an electronic risk management application. Service Now provides risk
performance data, allowing it to more accurately gauge its exposure risk.
Nonetheless, Post Office accepts that a more holistic and strategic review is
required.
123. As noted by the GT Governance Report, the Central Risk Team, as the second
line, “has undergone a transformation and has resourced appropriate skills and
experience.’®? The Central Risk Team reports and escalates risks through:
%®8 POL00446477, page 21.
°° POL00446477, page 56.
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a. Bi-monthly Intermediate risk dashboards, provided to GE (now SEG) members
which provide an overview of each business area’s risk position and a complete
list of the enterprise and intermediate risks.
b. Risk deep dives that are carried out every 6 months. The deep dives consider all
three levels of risk within a business unit. Conversations are held with the senior
leadership team area to assess their intermediate risks, discuss emerging risks
and also the risk posture for their departments. A report is provided to the RCC.
and the ARC. Whilst these measures have been introduced to effectively monitor
and report upon the identification and management of risk in the Post Office, Post
Office accepts Grant Thornton’s conclusion that ownership of risk in Post Office
needs to move away from the second line of defence and into the business. This
is less a matter of governance and more a matter of culture, in how the business
perceives and thinks about risk.
ARC and Risk Appetite (GT Governance Report, Appendix 6*°)
124.The ARC provides oversight of Post Office’s Group risk management systems,
operational controls and key systems, including monitoring exposures to the Group
Risk Appetite (see Terms of Reference of the Audit, Risk and Compliance
Committee, POL00363155). Risk updates are submitted to the RCC and the ARC
bi-monthly with the latest position on enterprise and intermediate risks, grouped
4° POL00446477, page 57.
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under their enterprise risk. The Risk update specifically highlights to RCC and ARC
where risks are outside of tolerance.
125. Post Office notes the conclusion of the GT Board Effectiveness Review that Post
Office should consider separating the Audit and Risk Committees.*! Post Office
has previously considered and rejected splitting the ARC but upon receipt of the
GT Board Effectiveness Review the Board has undertaken to revisit the question.
126. Post Office accepts that the number of regular attendees at the ARC meetings has
grown large and that the volume of papers is now significant. The ARC Chair has
confirmed that attendance, balance of representation, capability and time for
executive contribution will be considered by the ARC in September 2024.
127. Prior to 2021 the Post Office operated with a single Risk Appetite statement which
had been in place across Post Office since 2015. Risk Appetite statements were
developed across 11 categories through 2021-2024. The GT Governance Report
concluded that Post Office operates with a conservative risk appetite. 4?
128. The Post Office’s risk appetite is informed by the circumstances within which the
Post Office operates; namely that Post Office will not take any unnecessary risks
that may cause a detriment. The Strategic Review should consider the operational
and commercial effect of this conservative risk appetite on Post Office and, as
41 POL00446476, page 25.
42 POL00446477, page 58.
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noted in the GT Governance Report, the appropriate risk appetite statements and
risk tolerances for the future should be aligned with the overall business strategy. 4%
129.In December 2022, tolerances were introduced in addition to the Risk Appetite
statements. In doing so the Board provided an extended Risk Appetite to ensure
that reporting to the ARC focused on the key risks which were significantly outside
the Risk Appetite. Risk appetite refers to the amount of risk Post Office aims to
operate within in order to achieve its objectives.
130.In 2023 the Post Office introduced the Policy Exception Process as a result of
which Central Risk is aware of anyone who wishes to operate outside the agreed
risk policy, providing the opportunity to take action to address the risk that emerges.
131.In June 2024, the Board reviewed the Group Risk Appetite scale and approved an
adjustment to the Corporate Averse appetite scale from 1-5 to 1-6 to provide
greater flexibility to risk owners who may now accept as opposed to mitigate the
risk. This change will only affect the lowest level risks faced by the Post Office and
will not change the way Post Office identifies or acts upon the more significant risks.
132. As noted in the GT Board Effectiveness Review, there is a lack of adequate funding
to address some risks within known time horizons.** In December 2022 the then
Chair of the ARC, Carla Stent, wrote to the Chair of the ARC for the Department
43 POL00446477, page 58.
“4 POL00446476, page 35.
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for Business, Energy and Industrial Strategy to provide a summary of key risks that
were out of tolerance at that time (see Letter to Dr Vikas Shah, Chair of Audit, Risk
and Assurance Committee at BEIS dated 19 December 2022, POL00447765). In
particular, recognising that many out of tolerance risks cannot be remediated
without the necessary funding to do so, the ARC Chair emphasised three risk areas
would remain out of tolerance until the funding position improves, namely:
a. the cyber risk from the loss of availability of critical systems;
b. the inability to extend the Fujitsu contract; and
c. data governance resulting in poor management of unstructured information.
133. Those three risk areas continue to be listed in the top risks outside of tolerance
highlighted to the ARC in July 2024.
RCC and Risk Culture (GT Governance Report Appendix 64°)
134.In accordance with the RCC Terms of Reference (POL00447910), the RCC is
charged with supporting the Group Executive in fulfilling their responsibilities in the
effective oversight of risk management, internal control and assurance, and
compliance in the Group. Post Office is in the process of revising the RCC’s terms
45 POL00446477, page 58.
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of reference to emphasise its decision-making function and place greater
accountability across the Business Functions.
135. The Post Office has invested in improving risk awareness and risk culture in Post
Office but accepts the conclusions of the GT Governance Report that there
remains a lack of importance attributed to risk management across all levels,
including the top executive layer.4* Recent actions to improve in this area include
the following:
a. All new risk owners are offered one to one training from the Central Risk team but
levels of education and training on risk vary through Post Office. Post Office are in
the process of piloting a new training module on control effectiveness. We agree
that specific training to senior leaders on risk management practices would be
beneficial.
b. A Service Now Risk Management User Guide was introduced in May 2024
(POL00447891) to assist risk owners in the first line to correctly identify and record
risks in Service Now.
c. In May 2024 Post Office commenced a pilot for the introduction of Risk Champions.
Risk Champions will act as the risk subject matter experts within their business
units to assist the first line to better understand and identify emerging risks, and to
48 POL00446477, page 58.
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develop their risk management skills (see Post Office Risk Champion Framework
dated April 2024, POL00447909).
Internal Audit and Control Environment (GT Governance Report, Appendix 6%”)
136.A draft Control Framework for Post Office was approved by the ARC in 2022 (see
Audit, Risk and Compliance Committee Report — Draft Internal Control Framework
dated 26 September 2022, POL00447843) to provide Post Office with a clear and
consistent approach against which its control environment can be maintained,
measures, monitored and demonstrated. Whilst the Control Framework remains in
draft due to funding constraints, the principles are applied on a best endeavours
basis. The ARC Chair has confirmed that the steps to better embed the draft
Control Framework and address the practical adherence to documentation will be
added to the upcoming ARC agenda.
137.Group Assurance was introduced to the Post Office as a second line in 2022 to
address an over reliance on Group Internal Audit and limited first line assurance,
without systemic processes to ensure regular and objective oversight. The purpose
of Group Assurance is to objectively assess and monitor aspects of the business,
invite objective challenge and help to foster a culture of objective challenge. Group
Assurance applies the draft Control Framework and complies with the Group
Assurance Standard Operating Procedures (“SOP”) (POL00447896).
47 POL00446477, page 59.
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138.1 am told by Post Office’s Group Assurance Director , Anshu Mathur, that in addition
to reviews under the SOP, Group Assurance also carry out desk top reviews.
These involve performing a review with a heavily restricted scope and approach,
namely reviewing, and assessing information submitted by the stakeholder or
business function to support their assertion(s). The review does not take into
consideration any other source of information or involve wider investigation and
does not leverage prior information / knowledge. Such reviews are performed to
provide a quick and objective opinion on whether the direction of travel adopted is
correct or has significant gaps.
139.Group Assurance initially prioritised business areas requiring ‘legacy’ assurance
reviews before continuous assessment could commence. Those legacy assurance
reviews are now complete, save for one outstanding review: Overturned Historic
Convictions and Detriment. The outcome of the Legacy Reviews was reported to
the RCC and the ARC. Following this, Group Assurance has pivoted to continuous
assessment of business areas. Its remit currently covers: Retail, A&CI, Speak Up,
Remediation Unit, Technology, Shortfall Schemes, the Inquiry and Culture. Group
Assurance also undertakes ad hoc reviews of other business areas when
requested by SEG.
140. A continuous assurance model and a risk/control approach will inevitably take time
to be properly embedded across Post Office operationally and culturally.
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141. Internal Audit’s activities are governed by the Internal Audit Charter
(POL00447840). Grant Thornton concluded in its GT Governance Report that Post
Office has established “an appropriate Internal Audit framework and supporting
documentation” and there was a “good working relationship between the Director
of Internal Audit and the ARC Chair.”
142.From the 2024/2025 financial year, an independent evaluation of the risk
management framework, and governance will be undertaken by a third party to
ensure independence.
Subsidiaries (GT Governance Report Appendix 64°)
143. The latest version of the Risk Management Policy Guidelines states expressly that
all colleagues, contractors and Postmasters should be risk aware and both the
Risk Management Policy and the Internal Audit approach consider the risk to
Postmasters and their operations (POL00447894). Upon appointment, it will be for
the Group Risk, Compliance, Assurance and Audit Director to determine how to
take forward the recommendations contained in the GT Governance Report® to
make clearer the Postmasters’ role in risk management.
Conclusion
48 POL00446477, page 59.
49 POL00446477, page 59.
5° POL00446477.
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144. As requested by the Inquiry, this statement has focused on the effectiveness of
Post Office’s governance arrangements now rather than its historical
arrangements (those will be addressed in its submissions on Phases 5/6 in due
course). However, it is clear from the evidence heard during those phases that
there were significant issues with Post Office's corporate governance during the
relevant period, to the detriment of Postmasters. More recently, Post Office
accepts that there have been (and continue to be) some concerning issues with its
corporate governance. In particular, Post Office accepts that there has been a lack
of clear vision on its purpose, objectives and relationship with the Shareholder.
This has negatively influenced the day to day running of the business , undermining
the effectiveness of our governance and hindering the pace of decision-making
within Post Office. Post Office now has a roadmap which identifies the necessary
changes. This will be further informed by the current Strategic Review. Post Office
is committed to achieving real reform of its governance, with the support of the
Shareholder.
Most Recent Chair and Board Annual Effectiveness Reviews
2023/24 Chair Effectiveness Review
145. Whilst the process for conducting a Chair annual effectiveness review for 2023/24
was agreed with the Senior Independent Director and the Shareholder
Representative in January 2024, it is understood that Henry Staunton gave
instructions to pause the review. In light of the departure of Henry Staunton at the
end of January 2024, no Chair annual effectiveness report has been produced in
2024.
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2023/24 GT Board Effectiveness Review
146.As acknowledged in the GT Board Effectiveness Review: “POL continues to
navigate a turbulent period with the ongoing Horizon IT Inquiry, the recent absence
of a Chair and several upcoming Board rotations.”
147.The GT Board Effectiveness Review also notes that there are “numerous
challenges that are impacting on POL Board's effectiveness and therein POL’s
ability to address pressing issues”.5? These are listed as being the ongoing Select
Committee Hearings and the Horizon Inquiry, as well as the proximity to the
General Election, “coupled with the need for remediation for Postmasters and in-
house development of a new IT system all of which impact funding requirements.”
148. It also highlights the “intense and critical media scrutiny faced by the POL remains
a significant concern, as it is impacting the culture and operations of the
business.” And it notes that “the Board is under significant strain in terms of
capacity, with the CFO on long-term absence, executives working around the clock,
and NEDs working beyond their contracted hours and at risk of straying into
executive decision-making. Clearly the collective of these issues are adding a
Significant burden to the Board, with many matters being brought to it that should
be addressed at a lower level.”*5
51 POL00446476, page 7.
52 POL00446476, page 7.
53 POL00446476, page 7.
54 POL00446476, page 7.
55 POL00446476, page 7.
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149. It is also worth noting the positive aspects of the Board and its operations that
Grant Thornton identifies, including the diversity of debate, the engagement of
Board members and the tactical work being undertaken within ARC and the
Remuneration Committee alongside a general willingness to enhance governance
and decision-making.
150. Nevertheless, the Post Office cannot, and does not, look to excuse the ultimate
conclusion of the GT Board Effectiveness Review, which states that: “there is
limited cohesion within the Board, exacerbated by the absence of a unifying
purpose and strategy, insufficient succession planning for key roles, a significant
amount of operational matters coming up to Board and ongoing internal and
external scrutiny. This has led to low levels of trust within the Board and throughout
the organisation. In this context, it is challenging to conclude that the Board is
currently effective” ©
151.Some changes have been made to date, as set out above at paragraphs 79-145.
Post Office recognises that there remains a lot to be done to make sure that its
Board operates effectively including to address succession planning, to change the
pervasive risk adverse culture, to build leadership cohesion and to enable
transformation. Post Office commissioned Grant Thornton in order to obtain an
56 POL00446476, page 7.
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external view on the effectiveness of its Board. Post Office intends to implement
the changes that it has accepted as set out in the action trackers.
152. Post Office will also carefully consider any findings and recommendations made
by the Inquiry’s governance experts as to what can be done to improve Board
effectiveness.
153. The GT Board Effectiveness Review states that “so/ving several of the issues are
not within POL’s gift, and for example, require the active engagement of the
Shareholder’.5’ Post Office recognises that it needs to engage actively with UKGI
and DBT to solve certain of its problems and where additional funding is required,
to present carefully considered proposals for funding which align with its purpose
and strategy. DBT have been provided with the GT Governance Report,®® the GT
Board Effectiveness Review? and the GT Rem Co Report.®°
Ethos cultural transformation programme
154.1 address this at paragraphs 226 onwards when discussing culture.
Annual report
57 POL00446476, page 7.
5° POL00446477.
5° POL00446476.
© POL00446475.
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155. Post Office prepares an Annual Report and Accounts each year. The latest annual
report is the 2022/23 Annual Report dated 11 December 2023 (UKGI00044323).
This was published within the required timeframe, including taking into account the
requirements to place it before Parliament pursuant to section 77 of the Postal
Services Act 2000.
156. Post Office believes that the process for the preparation of the 2022/23 Annual
Report was well-run, and an improvement on the previous year. This is supported
by the GT Governance Report, which rated Post Office as ‘green’ against Principle
4(N) of the UK Corporate Governance Code for the Board to “present a fair,
balanced and understandable assessment of the company’s position and
prospects”.®!
157. The final form 2022/23 Annual Report was presented to the ARC at its meeting on
27 November 2023 on the basis that it was ready to be presented to the Board for
approval. The accompanying ARC paper stated that the 2022/23 Annual Report
had: “been reviewed by a significant number of interested parties with comments
reflected in the version presented to ARC. These parties include — management,
GE, ARC, Board, UKGI, DBT and PwC. In addition, specific reviews have been
undertaken by an external Copywriter, TB Cardew, Deloitte and Pinsent Masons
over defined items / areas” (Audit, Risk and Compliance Committee Report —
61 POL00446477, page 21.
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FY22/23 ARA Update paper dated 27 November 2023 (the ” November 2023 ARC
ARA Update”) POL00447846).
158.Having an enhanced review and assurance process was seen as being of
particular importance following the failings of the 2021/22 Annual Report
(POL00363151). This is referred to by the Chair in his Foreword to the 2022/23
Annual Report: “Regrettably, the year will also be remembered for the failings of
governance included in last year’s remuneration report which included an
inaccurate description for one element of a senior bonus scheme”
(UKG100044323).
159.The additional assurance provided by Deloitte, for example, involved verifying
management identified metrics and statements included in the first half of the
2022/23 Annual Report, with many of these relating to Remuneration Committee
reporting. In addition, Post Office instructed a law firm, Pinsent Masons, to carry
out an external assurance review of Code reporting compliance (who consequently
reported that “a high level of compliance is being achieved”).
160.A further enhancement was the ownership of specific sections of the 2022/23
Annual Report by members of SEG, who were then required to provide attestations
over the accuracy and completeness of their respective sections, and Executive
declarations identifying material items to be aware of. An example of this is the
Board paper in relation to the Accountable person (the Audit, Risk and Compliance
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Committee Report - Accountable Person dated 27 November 2023,
POL00447847).
161.In addition, meetings were “held with all Board members where requested, to
discuss the Going Concern position in more detail and enable any concerns to be
raised and addressed ahead of the Board meeting on 28/11/23” (see the
November 2023 ARC ARA Update, POL00447846). A number of papers were also
produced to address this issue. This was in light of “the wording around the
material uncertainty, in addition to the expected funding position as at the time of
signing” (see the November 2023 ARC ARA Update, POL00447846).
162. Therefore, Post Office has adopted a different approach to the preparation of the
2022/23 Annual Report in arranging for it to be reviewed by additional third parties
with a view to ensuring the accuracy of the report. The changes to the process
this year has led to a greater degree of scrutiny over the accounts prior to
finalisation.
Post Office meetings with the Minister for Postal Affairs and senior officials at
DBT and UKGI since 1 January 2024
163.1 am asked to provide details of any meetings the Post Office holds with the Minister
for Postal Affairs and senior officials at DBT and UKGI since 1 January 2024 and
provide reflections as to what this means for corporate governance now. Where I
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do not attend the meeting, I have been provided with the information set out below
by someone who does or by considering a summary of key documents related to
the meetings.
164. Post Office typically meets on a monthly basis with the Minister for Postal Affairs.
I attend those meetings, along with other members of the Post Office executive
team depending on the meeting’s agenda. As well as attendees from DBT, this
meeting is attended by the Shareholder Representative, Lorna Gratton. In 2024,
these have been held on 23 January, 29 February, 28 March, 30 April and 25 June.
There has not been a meeting since the election. The items on the agenda vary
but have recently been dominated by issues of compensation.
165. The 23 January meeting was focused on measures to overturn Postmaster
convictions, compensation and funding issues (see Email regarding
Hollinrake/Read Monthly Meeting dated 23 January 2024, POL00448486). The 29
February meeting included compensation tax, and the possibility of compensation
for pre-Horizon issues (see Email regarding Ministerial Meeting & Today's
Statement dated 19 — 23 February 2024, POL00448489). The 28 March meeting
was focused on compensation, and shortfalls (see Email regarding Nick March
Ministerial Meeting dated 12 - 22 March 2024, POL00448490). The 30 April
meeting was focused on compensation issues (see CEO Briefing Notes, Meeting
with Minister of State, Kevin Hollinrake dated 30 April 2024, POL00448495) and
(see Email regarding Nick Read/Minister Hollinrake Monthly Meeting dated 22 —
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25 April 2024, POL00448493). As explained above at paragraph 29, 2024 has
been characterised by crisis management rather than the long-term future of Post
Office. As the agendas suggest almost all the Ministerial meetings in 2024 have
been focused on issues associated with compensation and the mass exoneration
of Postmasters and how Post Office can speed up the process of both to ensure
timely and fair redress. These can be characterised as tactical updates and the
focus is upon actions to drive immediate improvements and address specific
issues rather than the overall strategic direction of Post Office.
166.1 meet fortnightly with the Shareholder Representative, Lorna Gratton and a DBT
official at Director level. These meetings are designed as an operational update for
the Shareholder and will cover a range of current issues ranging from: trading
performance, funding, and people and culture issues, to redress and Inquiry
matters, especially costs.
167.In responding to the remainder of the question, I have set out details of formal
meetings which take place at Senior Civil Servant level and above which are
relevant to the Inquiry’s terms of reference. This is because there are a large
number of meetings with senior officials at DBT and UKGI. These meetings take
place for a wide variety of reasons and on a number of topics. Some are also formal
with a regular cadence and others take place more informally or irregularly. Some
of the meetings I detail below are attended by others, such as representatives from
HM Treasury, BEIS, other retail leaders, and the NFSP. This can help to bring
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together different interests and viewpoints. I set out below a list of those which are
relevant to the Inquiry's Terms of Reference and which take place with a regular
cadence:
a. Quarterly Shareholder Meetings with UKGI and DBT attendance
These take place quarterly. Prior to each meeting, there is an agreed agenda, update
on actions and priorities and Post Office produces a progress update report. I
exhibit examples for April and July 2024 (see Shareholder Quarterly Briefing
Progress Report dated 11 April 2024, POL00448492 and Shareholder Quarterly
Briefing Progress Report dated 11 July 2024, POL00448500).
b. Quarterly tripartite meetings between Post Office, DBT (officials and sometimes
the Minister) and NFSP
These take place quarterly. I exhibit an example agenda and minutes from January
2024 (see POL/NSFP/DBIT Working Group Meeting Agenda and Minutes dated
17 January 2024, POL00448488).
c. Meetings between the Post Office CFO (and selected members of their team) and
UKGI (Deputy Director
These usually take place fortnightly. There is usually an ad hoc agenda and the
meetings focus on current live issues. The meeting is used as an escalation route
mainly for working level activities.
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d. Remediation Unit and Inquiry spend
These take place monthly. They cover Remediation Unit and Inquiry spend. UKGI and
DBT are in attendance.
e. Monthly finance reporting meetings with UKGI
These take place monthly. These are mainly with junior officials, although senior
officials can and sometimes do attend, to answer questions on Post Office’s
monthly financial performance. This is a key part of UKGI’s financial oversight of
Post Office.
f. I Monthly meetings on overturned convictions and the Horizon Shortfall Scheme
These take place monthly. They are attended by DBT officials and sometimes with
attendance from UKGI (including the Shareholder Representative).
g. Daily Strategic Platform Modernisation Programme (“SPMP”) meetings
These meetings take place daily. They are attended by UKGI and DBT officials and
Post Office’s Transformation and Strategy Director. The focus of the meeting is
on funding.
h. Meetings of the Horizon Fujitsu Governance Group
These are attended by the Shareholder Representative and DBT officials.
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168. These meetings would be improved through greater role clarity across officials,
clearer and more precise information sharing and tighter alignment across the
various shareholder groups. It would be helpful going forward to bring all
stakeholders together for key meetings to ensure timely sharing of information and
so that fully informed decisions about Post Office can be made. This should include,
for example, officials and Ministers in HM Treasury.
Chair Letters
Letter to Henry Staunton
169. The June 2023 DBT Letter to Henry Staunton letter from the Parliamentary Under
Secretary of State, DBT, to Henry Staunton dated 29 June 2023 (UKGI00044317)
acknowledges that “this is a difficult time for the Post Office and that you are facing
Significant headwinds and immediate challenges”.
170.In addition to Henry Staunton being asked to continue “to lead the Board and
provide support and challenge to the Chief Executive and management team in
stewarding the company through this challenging period”, the letter specifically
asks that Mr Staunton focus on “the following priorities, and align the reward
package to the shareholder priorities”:
® The June 2023 DBT Letter to Henry Staunton, UKGI00044317.
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(a) effective financial management and performance, including management of legal
costs, to ensure medium term viability;
(b) addressing Post Office’s historic failures and set the business up for success in the
future;
(c) maintaining and improving Post Office’s capacity, capability, and resilience at all
levels of the organisation;
(d) supporting and challenging the CEO’s efforts to improve the expertise, depth, and
resilience particularly at the Group Executive team to ensure the team is capable
to deliver the business plan presented;
(e) updating the Shareholder on how cultural transformation is being incorporated and
embedded into the organisation; and
(f) facilitating the sharing of information with UKGI and the Shareholder in an open
and transparent manner.
171.The letter states DBT’s expectation is of updates in “the regular 1:1s between the
DBT Permanent Secretary / Chair and DBT Director General / CEO”.® It also
requires a signed written report from the Chair and CEO on progress in advance
® UKGI00044317.
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of each Quarterly Shareholder Meeting, to include “commentary on key personnel
risks and contingencies at both the Board and Executive level”.®4
The letter to Nigel Railton
172. The letter to Nigel Railton has not yet been finalised by DBT. Post Office is
therefore not able to provide any further details about what it says about corporate
governance at the time of submitting this statement.
D. Culture at Post Office
173.1 have been assisted in responding to the Inquiry’s questions regarding culture in
R9(58) by the People Director (People Services).
174. Post Office recognises the need for fundamental cultural change. It recognises the
presence of oppressive behaviour and intimidating actions in the past which led to
a lack of respect and trust between Post Office and its Postmasters. It
acknowledges that there has been a lack of effective leadership, a lack of effective
training and support; and a lack of responsibility within the organisation. It accepts
that it has work to do to restore trust with Postmasters and with the public as a
whole. Cultural changes in the Post Office are integral to the rebuilding of that trust.
175. The years from 2019 to the present have been a period of significant flux for Post
Office. Paula Vennells stepped down as CEO in February 2019; Alisdair Cameron
was appointed as Interim CEO; I joined as CEO in September 2019. Since that
® The June 2023 DBT Letter to Henry Staunton, UKGI00044317.
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time there have also been several changes to the Group Executive Structure: 10
individuals at Group Executive level have left the organisation. This turnover, and
the ensuing lack of consistency at the corporate level, has necessarily slowed and
hindered change. In particular, since 2019 there have been five Chief People
Officers and three Chief Information Officers. The individuals in those roles should
be amongst the most instrumental to the changes Post Office needed to make.
176. Whilst there have been five individuals in the CPO position, the reasons for leaving
have varied, including a voluntary resignation, an individual not returning following
maternity leave, and a planned short-term contract for maternity cover. The current
CPO has been in position since September 2023.
Post Office’s Response to the GLO judgments
177. Following the criticisms of Post Office’s culture by Fraser J in both the ClJ and the
HIJ, external and internal reviews were conducted from 2019 onwards to determine
what had gone wrong in the organisation and to inform the steps required to put
things right.
178.In the autumn of 2019, on my arrival, work began on building an overarching
strategy for my tenure in the Post Office; to set the purpose, focus and tone of the
organisation. As part of that work an Organisational Health Index Survey was
conducted by McKinsey. Its report was presented to the Board on 26 November
2019 (Report by McKinsey — Organisational Health Survey - “Purpose, Strategy
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and Growth” Board Presentation dated 26 November 2019 (the “McKinsey
Report”), POL00447762).
179. The results combined with data from Postmasters and customers and employee
surveys led to the development of Post Office’s new purpose: “We’re here, in
person, for the people who rely on us”. This purpose was intended to recognise
that Post Office was a business built upon the service that Postmasters deliver to
customers through their branches every day, and that Post Office was there to
support the Postmasters to do so.
180. This new purpose was intended to support a reset of the culture of Post Office,
renewing its focus and providing clarity across the organisation and making clear
the fundamental importance of Postmasters to the organisation.
181. Prior to the ClJ, Postmasters were referred to as agents or operators: they are now
referred to solely as Postmasters; the term “subpostmasters’ is also no longer used
within the organisation in order to reinforce their centrality and importance. The
expression “agent” is no longer used for the same reason.
182.In February 2021, a report from KPMG set out reflections on the issues that
emerged because of the HJ and this Inquiry (POL00030396).® Its core conclusion
®5 POL00030396, ‘Horizon Report / Report on the progress made to address six areas derived from HlJ
Findings’, KPMG LLP, June 2021, V4.2,
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was that change was happening but that fundamental issues remained to be
addressed to effectively re-establish Postmaster trust.
183.In March 2021, Post Office commissioned a report from Deloitte, (Deloitte Report
— Post Office Limited: Postmaster Journeys - Final Report dated March 2021 (the
“Deloitte Report’, POL00038115). The Deloitte Report was intended to examine
the extent to which the organisation had moved towards its stated aim of “putting
Postmasters at the heart of the business”. It built on findings and improvements
made by Post Office as a result of both the ClJ and HlJ, as well as looking at wider
improvements that had been (or should have been) made to mitigate the risk of
Postmaster detriment. It observed a need for a “shift in culture throughout the
organisation”.©©
184. Regrettably, the momentum needed for effective change during this period was not
always consistent. For example, the proposals in the McKinsey Report®’ were
announced to the business in January 2020. Necessarily, the Post Office’s
strategic focus shifted to maintaining the business during the COVID-19 pandemic.
The changes made and the effort exerted at every level to respond to the needs of
the public during the pandemic were profound, from keeping branches open, to
repurposing our distribution centres and procuring PPE.
6 The Deloitte Report, POL0038115, page 8.
®” POL00447762.
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185. It was difficult to formally implement the resulting strategy during the pandemic
period, when the focus was on the immediate challenges. As a result, the new
strategy was only properly launched in September 2020. However, the pandemic
was also culturally significant for the Post Office. It was a demonstration of the Post
Office’s key purpose and role in society: to be “here, in person, for the people who
rely on us".
186. Various practical changes were put into effect following the ClJ, and to reflect the
findings of the reviews undertaken. In 2020/2021, a new Contract Performance
Policy, a new Suspension Policy, and a new Termination Policy were put in place
as part of a renewed commitment to handle contractual matters in good faith with
fairness, transparency and professionalism. A Postmaster Support Guide was
published which set out the support available.
Improvement Delivery Group (“IDG”)
187. In tandem with the above, Post Office established the Improvement Delivery Group
(“IDG”) in February 2021. A subcommittee of the GE, IDG was tasked with
providing oversight of improvement activities undertaken to ensure conformance
with the findings of the ClJ and HIJ. From February 2021 to October 2021, the IDG
focused on the change delivery and tracked what actions were completed in
response.
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188. Detail on the implementation of the key changes has been provided by Melanie
Park (Central Operations Director), Tracy Marshall (Retail Engagement Director),
John Bartlett (Head of A&Cl) and Simon Oldnall (Branch Technology Director) in
response to Rule 9(57) and Rule 9(58).
189.A further review of the ClJ, HIlJ, GLO and the Hamilton Judgment, along with the
evidence heard during Phase 1 of the Inquiry, was carried out by the Improvement
Delivery Group (“IDG2”) in 2024. It identified that there were seven areas in which
additional cultural improvements could be made which built on the work carried out
since the original ClJ, HlJ and Hamilton criticisms. For ease of reference, these
themes were: oversight, capability, curiosity, transparency, failure to speak up, pre-
conceived biases and behaviour (see Culture IDG update dated 16 January 2024,
POL00447851). IDG2 noted a large number of improvements implemented at that
time of the review in 2024:
a. Appointment of a new CEO in 2019;
b. Appointment of two Postmaster NEDs to the Board;
c. Appointment of a Postmaster Director to the Leadership Team;
d. Anew Chair, Shareholder Director and Non-Executive Directors;
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e. The disbanding of the Group Executive and Senior Leadership Group and creation
of a new SEG and new Leadership Team in January 2024 respectively;
f. I Establishment of the Remediation Unit and Public Inquiry Teams;
g. Group Assurance Function;
h. Reporting of internal audit culture findings;
i. Establishment of organisational design principles in 2021; and
j. Draft indicators of culture established working with the Institute of Business Ethics.
Postmaster NEDs
190. In April 2021 two non-executive director (“NED”) Postmasters, Saf Ismail and Elliot
Jacobs, were appointed to the Post Office Board. In September 2021, a serving
Postmaster, Hithendra Cheetirala, was appointed to the role of full-time Postmaster
Director on a two-year term. He was subsequently replaced in December 2023 by
Mark Eldridge who now serves under the title, Postmaster Experience Director, as
part of the Senior Leadership Team.
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191. The recruitment of Postmaster NEDs onto the Board is the first time in 360 years
that Post Office has had serving Postmasters on its board. The change reflects
Post Office’s commitment to the prioritisation of building and maintaining strong
relationships with Postmasters. Further detail on the Postmaster N EDs is provided
at paragraphs 94 to 101.
Retail Improvements
192. Various restructuring work has taken place aimed at refocusing the business on
Postmasters:
a. Post Office has established:
a dedicated Postmaster Training Team;
improvements to training facilities;
new training modules for Postmasters; and
an upgraded online training platform.
A new team field structure has been introduced, giving every branch an Area
Manager responsible for managing day-to-day relations with Postmasters. Over
25,000 Area Manager visits were carried out in the first year 2019/2020, increasing
to over 44,000 in 2023/2024. These visits are intended to improve dialogue
between Postmasters and Post Office and to provide a point of contact for
Postmasters to raise concerms.
Engagement with Post Office employees
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193. Post Office has taken steps to address and improve engagement between Post
Office Executives and Post Office employees:
a. In November 2019, shortly after joining the business, I introduced Ten@Ten, a
weekly 10-minute update delivered by me or a deputy at 10am on a Wednesday
providing an opportunity to talk about business performance, corporate issues and
share successes. Within these sessions we also have a “fact or fiction” section, in
which any employee online or in person can ask questions of me directly, which
will be answered during the session or afterwards in writing. This was introduced
to demonstrate transparency and openness. The sessions have been well
attended with around 700-1000 online viewers and 80-100 in person.
b. On the back of Ten@Ten, I introduced longer monthly “Townhall” sessions which
include a question-and-answer session with online and in person questions
welcome. These sessions were intended to enhance communication between
colleagues and the Group Executive; increasing visibility and approachability.
194. However, the results of the Colleague Engagement Survey 2024 (Post Office
presentation titled ‘Engagement Survey 2024') (POL00446681) have
demonstrated that further work is required to improve communications with Post
Office employees.
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a. 29% of colleagues said improving internal communications would help make Post
Office a better place to work® — less than half of colleagues feeling that Post
Office's communications were open and honest (46%).®°
b. Whilst a small increase on the 2023 Pulse Survey results (40%), this demonstrated
a decline since the 2023 Survey of 4%.”°
c. This perspective directly contrasts with the surveyed views of the senior leadership
population (“SLP”) that openness and honesty were improving (63%, up 10% since
2023)"' and is acknowledged to demonstrate a disparity between the perception
of senior leadership and employees of Post Office.
195. In considering these figures it is of note that this survey was completed soon after
the ITV drama aired and following the media coverage relating to the former
Chairman of the Board, both inevitably eroded confidence. The events of the past
and the existing media scrutiny will undoubtedly have had some effect on our
employees’ trust and confidence in the leadership.
Engagement with Postmasters
68 POL00446681, page 3.
6° POL00446681, page 16.
70 POL00446681, page 16.
7 POL00446681, page 16.
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196. Post Office has also taken a number of steps to strengthen communication
relations between Post Office employees, including senior leaders, and
Postmasters:
a. 1In2019, when I joined as CEO, I and other members of the senior leadership team,
travelled across the UK and met with Postmasters from rural, urban and suburban
post offices in a more informal setting. This allowed me to hear about issues they
faced and to allow them to hear directly from me. These were discontinued during
the pandemic lockdowns. They now take place, in the form of listening groups, at
least quarterly.
b. In April 2020, Post Office launched an online portal, Branch Hub, which gave
Postmasters access to Post Office information and services, branch data, training
and onboarding materials and knowledge materials. Its aim was to introduce
clearer communication with Postmasters to assist them in running their branches
and to provide a mechanism for providing feedback to the branch support centre.
Further detail on Branch Hub has been provided in Tracy Marshall’s response to
Rule 9(57) and Rule 9(58) (see WITN11610100 at paragraphs 44-45 and 75-80).
c. In January 2021 the “Adopt an Area’ initiative launched, which paired members of
the senior leadership group (“SLG”)’? with Area Managers. Senior Leaders were
provided with a system to log and resolve issues raised by Postmasters on their
2 The SLG was a team of approximately 100 senior leaders within Post Office. This effectively closed
down in January 2024 when the Leadership Team and SEG were established.
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visits: the programme has been rolled out across the UK and requires Senior
Leaders to visit their branches at least twice a year, with an expectation that they
will visit once per quarter. In the summer months the Post Office “Perfect Day”
expects Senior Leaders to visit branches to help with and advise on the key
summer marketing campaign materials. The "Adopt an Area" initiative also
requires one individual objective per quarter to be aligned to Postmaster-centricity
to ensure the focus is on what is important.
The “Christmas Helper’ initiative allows Post Office employees to spend a day in
a Post Office Branch or a Customer Support Centre to help and to understand the
pressures Postmasters face at that busiest time.
In February 2021, Service First Training was introduced which provided a series
of workshops aimed at supporting any Post Office employees with direct contact
with Postmasters or Customers. The training was designed, in light of the findings
of the ClJ, to focus on developing stronger communication skills by truly listening
and, in turn, by building better relationships with Postmasters. The training was
rolled out across branch support centres and supply chain support teams and was
intended as an opportunity to reset service culture and remind Post Office
employees of the expectations of their behaviour. In short, to remind them that their
purpose is to serve the Postmasters and to help them to serve their customers.
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f. In May 2021, the introduction of a series of short films, “Week in the Life of a
Postmaster,” helped colleagues understand and appreciate the challenges and
rewards facing Postmasters responsible for running their own businesses. These
films and related eLearning subsequently became part of Post Office employee
inductions to encourage a focus on Postmasters across all areas of the
organisation.
g. InApril 2022, Postmaster forums were launched and aimed to involve Postmasters
in decisions and resolving more issues at a regional level. They are hosted by
regional managers, with subject matter experts invited to address Postmasters on
the emerging or continuing issues of note for them. These forums have been well
attended. They have been held monthly and they have become a key element of
Post Office’s engagement with Postmasters.
197.Unfortunately, the results of the 2024 Postmaster Sentiments survey
(POL00446682) demonstrated that the initiatives described above had not proven
as successful as Post Office had hoped. Just 37% of respondents were aware of
regional forums,” only 20% knew that senior leaders were visiting branches
through the Adopt an Area Programme and 44% had heard about the twice-yearly
Postmaster conferences. ’* Nonetheless, those who were aware of the many
initiatives aimed at rebuilding trust, proved more likely to say they have a positive
® POL00446682, page 15.
™ POL00446682, page 15.
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relationship with Post Office, which may indicate some measure of success for the
initiatives themselves and a need to better communicate and promote them.
198.The Postmaster Sentiment Survey showed a high awareness of Branch Hub,
measuring at 85% of respondents.’° Through Branch Hub, Post Office provides an
accessible means for Postmasters to obtain the information, communications and
support they require to run their branch and 60% of Postmaster respondents
thought Branch Hub tools helped them to run their branch on a day-to-day basis.
Awareness of branch profitability initiatives proved significantly higher than those
initiatives aimed at rebuilding trust.
GLO Awareness
199. Post Office has taken steps to raise awareness of the issues arising out of the GLO
and concerns so far raised by the Inquiry, in order to ensure that those currently
employed in the Post Office are aware of the mistakes made in the past:
a. In March 2022, Post Office launched and ran a mandatory training module for all
colleagues and new starters covering four key themes: “the Group Litigation”, “the
Duty of Good Faith”, “Continuous Conformance” and “Calling Something Out”.
b. In February 2024, mandatory e-learning and live sessions, “The Post Office
Scandal” were rolled out across Post Office workplace sites. These were followed
> POL00446682, page 15.
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up by an e-learning module and integration into the induction process. These
sessions had been developed through the course of 2023 but their impact was
emphasised by the ITV broadcast of the drama “Alan Bates vs the Post Office” in
January 2024.
Restorative justice meetings with victims
200. From June 2023 onwards Post Office arranged meetings for affected Postmasters
with senior Post Office colleagues. These meetings were held predominantly with
me and the Director of the Remediation Unit, Simon Recaldin, but also with various
members of the senior leadership team. Over 60 such meetings have so far been
conducted wherever they have been requested. The offer and conduct of these
meetings recognises the need to make amends to, and rebuild the trust of,
individual Postmasters who have suffered. The meetings provide an opportunity
for myself and senior Post Office executives to listen and personally apologise to
individuals affected by Post Office's conduct in the past. The feedback about these
meetings has been positive. Further detail on the conduct and feedback on these
sessions has been provided by Simon Recaldin in response to Rule 9(56).
ED&I Workstream
201. Since 2020, Post Office has attempted to adopt a more strategic approach to equity,
diversity and inclusion ("ED&lI"), in recognition of the need to go beyond
awareness-raising and into the implementation of an effective ED &l agenda across
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the workforce. Further detail on the key actions taken to progress the ED&l agenda
are provided in my second statement in response to R9(61).”6
202.An ED&l Hub was launched in 2021 to make ED&lI resources available to all
employees and in November 2022 an ‘Inclusion Playbook’ was launched
(POL00448664).
203. In November 2022, Post Office’s ED&I priorities were consolidated and agreed by
the General Executive as follows (as outlined in the GE Report dated 30 November
2022 entitled ‘Equity, Diversity and Inclusion Commitments’) (POL00448662):
a. The CEO will be accountable for Diversity and Inclusion in Post Office and will
appoint an executive sponsor with ownership for each Network Group;
b. Post Office will ensure there is no bias in the recruitment process and will
undertake a transparent process of audit;
c. Post Office will take positive action that supports open career opportunity and
progression and will undertake a transparent process of audit;
d. Post Office will commit to capturing and publishing diversity data, including tracking
our commitment to our 2024 targets of 14% ethnic minority representation, 50%
78 (WITNOO760200).
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female representation, 5% disabled and 5% LGBT+ representation at levels up to
SLP;
e. Post Office believes that supporting equity in the workplace is the responsibility of
all leaders and line managers and will commit to introducing ED&I objectives for
all People Managers;
f. Post Office commits to creating a respectful, inclusive work environment within
which every employee has the opportunity to make meaningful contribution to the
company’s vision and values, taking a zero-tolerance approach to harassment and
bullying; and
g. Post Office will ensure that all elements of reward and recognition, from
performance development reviews to bonus and pay, are fair and will report on this,
and take action to close the gap through our Ethnicity and Gender Pay Gap
Reporting.
204. Post Office has established and funded employee network groups to support
underrepresented groups within the Post Office:
a. Prism (connects and supports LGBTQ+ employees);
b. Affinity (promotes the progression of women at Post Office) ;
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c. Complexions (supports and celebrates religious and cultural diversity); and
d. Be You (represents disability, mental health, neurodiversity and wellbeing at Post
Office).
205. In April 2023 an ED&I objective was set for all Senior Leaders, and a new Post
Office Manager development programme was created with a specific training
module on EDI. All employees are now also required to have one ED&I objective
as part of their Personal Development Review, which is measured through the year.
This sends the message that Post Office takes its ED&I responsibilities seriously.
Individuals must lean in and take responsibility for their part in this process. Post
Office has also created a ‘Diversity Dashboard’, which is sent around to all
Executive and senior leaders every 3 months along with trend analysis, narrative
and insights.
206. Nonetheless, the Post Office has accepted the findings of the November 2023
Grant Thornton review, 'ED&I at the Post Office: Inclusion Insights Assessment’,
(POL00447900) which identified in particular the need to review Post Office’s
recruitment process to address concerns and enhance consistency around ED &l
and to ensure a structured approach to promotions and the adoption of appropriate
skills and competency frameworks: Grant Thornton has recommended mandatory
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ED&lI training for Post Office executives and the setting of requirements for
interview panels.
207. Post Office is concerned that the results of the 2024 ED &I Survey, conducted as
part of the Colleague Engagement Survey (POL00446681) show that colleagues
with a disability report that they were less likely to feel they can be their “full selves”
at work (59%, 18% lower than non-disabled colleagues);’’ that their views were
generally heard or that they feel generally included in their team (63%, 14% points
lower than their non-disabled colleagues)’* and to feel included in their team (75%,
12% lower than non-disabled colleagues).’°
208. There was also less positivity around diverse representation across all levels of
Post Office among diverse ethnic background colleagues and variation in the belief
that Post Office is a diverse organisation (8% and 7% lower in comparison to the
views of white colleagues respectively).®° One in five colleagues reported that they
had received an unwelcome comment, with “LGB+’” colleagues 13% more likely to
receive these comments compared to straight colleagues, and women 4% more
likely than men.®' The results show that experiencing unwelcome comments or
conduct rises with seniority for women at Post Office.
7T POL00446681, page 22.
78 POL00446681, page 22.
79 POL00446681, page 22.
®° POL00446681, page 23.
51 POL00446681, page 24.
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209. These results were presented to the Board in July 2024 who have confirmed that
action is required to address these findings. Hawa Newell-Sydique, Post Office's
new Talent and Capability Director, joined the organisation in June 2024. Post
Office, recognising that further improvements are required, has asked her to review
the ED&I policies, procedures and practices in place in order to finalise, launch
and embed a renewed ED&l strategy. The role of Head of ED&l has been
introduced within the ED&l team to provide a senior expert role.
210. In June 2024 Post Office ED&l team held an ED&l Summit (see presentation dated
11 June 2024) (POL00448413). They are held every six months. Having
considered the survey results, five high level themes from the overall strategy as
key priorities for the next 12 months:
a. The view beyond 2025: colleagues are asking for a refreshed strategic direction
and for it to be communicated effectively;
b. The research suggests that the strain experienced by more senior Post Office
colleagues can be linked to their exposure to politics and bureaucracy;
c. Poor communication is driving a lack of confidence in Post Office and senior
management from our colleagues;
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d. Ata time when communications are critical, our colleagues have highlighted that
they don't think we are getting it right; and
e. Colleagues with diverse characteristics continue to have a different (less positive)
experience of working at Post Office.
Whistleblowing/ Speak Up
211.A formal, credible and resourced whistleblowing procedure is important for the
development of a culture in which individuals throughout the Post Office feel able
to report concerns.
212. Recognising this, and as a result of criticisms in the Clu, Post Office has made
significant changes to its Speak Up functions, which sits within the Assurance and
Complex Investigations Team (A&CI). Details of these improvements have been
provided by John Bartlett. In particular, Post Office has broadened the reporting
function to include Postmasters as well as Post Office employees. In line with best
practice, a NED Champion, currently Amanda Burton, provides oversight and an
independent reporting line.
Steps taken to address wider cultural issues
213.Real cultural change needs to be embedded from the foundations of the
organisation. Post Office is committed to becoming an open, forward-looking
institution where colleagues take responsibility for their actions and support one
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another to keep asking the questions that need to be asked. Alongside the various
initiatives Post Office has launched on a micro level, it has also been carrying out
work on a macro level to examine and resolve the various cultural issues which
have been identified both in the GLO and in the Inquiry.
Launch of Ways of Working
214.In April 2021, Post Office launched a behavioural framework called “Ways of
Working” (“WOW”) (POL00447915) to replace Post Office’s previous values and
strategic pillars of: Care, Challenge and Commit. WOW was intended to describe
"how" an individual should act in Post Office, to define behaviours that were
expected of all Post Office personnel when interacting internally and externally with
both Post Office colleagues and with Postmasters.
215. The behaviours underpinning the previous pillars of “care, challenge and commit”
were:
a. “We care by always thinking customer’;
b. “We strive to make things better through honest challenge”; and
c. “We commit to decisive delivery”.
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216. The WOW values (POL00447915) focused on the relationship between the Post
Office and its Postmasters: “we are one team”, “we work in partnership” and “we
deliver’. The decision to move to the WOW model was intended to reset
expectations of behaviours of colleagues and to ensure that the importance of a
Postmaster-focus was clearly signposted to everyone, regardless of where they
worked in the business. Post Office wanted to make clear to all employees that
they as individuals had a role to play in changing the culture of the organisation.
217.In April 2022 Post Office relaunched its performance management process as
"Everybody's Conversations", which was intended to support an agile, responsible,
high performing and sustainable organisation. In doing so the WOW model was
integrated into Post Office’s Performance Management Policy (POL00448418) in
that colleagues are rated on their demonstration of WOW at their mid-year and full-
year reviews; the how (demonstration of the WOW) is equally weighted with the
what (performance against objectives). Post Office recognises that the
implementation of WOW against talent acquisition has, however, only recently
begun. This will be taken forward through the new Behaviours Framework set out
below.
218. Although the Performance Development Review process has involved an aspect
of examining how an individual performed against behaviours since 2018/19, in
April 2023 a completely separate rating for behaviours was introduced. The
colleague Performance Ratings Matrix considers behaviours demonstrated when
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assessing performance. Ratings above 3/5 require consistent demonstration of
behaviours and to score a top rating, colleagues must be role models of great
behaviour.
219.In April 2023, a 360-feedback tool was designed to support professional
development. It was designed to provide feedback on leadership competencies
linked to WOW. In October 2023, the feedback tool was introduced to assess and
capture feedback on how senior leaders demonstrate the WOW as part of the
performance development review process. These tools assist in holding those in
management and leadership roles to account for the behaviours and ways of
working expected of all Post Office employees.
220.The Colleague Engagement Survey (see paragraph 248) asks colleagues
"whether they see the Ways of Working demonstrated across the business". In
2021 this was 41%, in 2022, 50%, in 2023, 58%, in 2024, 53%.®* Colleagues were
also asked to indicate their agreement to the following statement: "Where I work
people are held accountable for their performance and behaviours". In 2022, 38%
of colleagues agreed with this statement. In 2023, it was 59% of colleagues agreed
and in 2024, it was 63%.8%
221.However, there was also a decline in colleagues’ belief that senior leaders were
leading by example and in line with the WOW, with 38% agreeing that they behave
®2 POL00446681, page 29.
53 POL00446681, page 29.
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in line with the WOW (reducing 6% from the 2023 results and 2% from the 2022
results).&4
Work on Ethics
222.I understand from Sarah Gray, interim Group General Counsel, that Post Office’s
in-house legal team began a thorough refresh with training on Solicitor Regulation
Authority standards in October 2021. This was followed by attendance at Law
Society ethical challenges roundtables in March and April 2022; in-person
mandatory ethics training with the Law Society in June 2022; further ethical training
delivered by Norton Rose Fulbright in December 2022 and additional Mandatory
LCAS training in March 2024. Further Ethics Training sessions and training by
Simmons and Simmons took place in July 2024, with additional sessions planned.
223. Further, that in December 2022, the Institute of Business Ethics (“the Institute”),
was brought in to carry out a review of Post Office’s existing Code of Conduct, and
its ethical decision-making model. Alongside a review of existing plans and key
documents, the Institute convened focus groups with Post Office employees and
Postmasters to help identify what was and was not working well and what
opportunities there were to improve. Thereafter, the Institute was tasked with
running workshops at Board and Executive level to ensure any agreed strategy to
improve Post Office’s ethical structure was properly taken on board. Finally, there
was to be a bespoke ethics programme delivered across Post Office making clear
what was expected of all stakeholders with regard to ethical behaviours.
54 POL00446681, page 15.
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224. While the Institute of Business Ethics involvement with Post Office did not result in
the sort of bespoke ethics programme that was anticipated, it did form part of the
Ethos programme initiated in 2023.
The Ethos Programme
225.Having redefined its purpose in 2020 and having rolled out a large number of
initiatives, Post Office recognised that it did not form part of a cohesive whole and
felt overly complex to our people. It was accepted that many colleagues would
struggle to list out all the things Post Office had launched and that whilst previous
initiatives had launched with the best of motives, aspects felt overly complex.
226. The Ethos programme was initiated in August 2023 with the express intention of
coordinating and accelerating cultural initiatives across Post Office (see the GE
Ethos Programme Report, POL00447844). Despite the work done from 2020 it
was felt that Post Office was missing absolute clarity on our distinguishing
characteristics, our sentiments towards each other and our Postmasters, the
morality that drives our behaviour and our guiding beliefs as an organisation. This
approach was adopted on the basis that organisational culture change requires
consistent, and systemic change over time to support broader iconic actions that
might be taken.
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227.Ethos was intended to achieve the following outcomes (see the Post Office Ethos
Programme Report, POL00447845):
a. establish a clear definition of the guiding ethics and shared beliefs of the
organisation;
b. deliver some iconic actions that would redefine culture through actions rather than
words;
c. enable an organisation-wide reckoning with the past, recognising and
understanding the conditions that allowed past failings to occur;
d. radical simplification of the frameworks in place associated with culture;
e. anagreed set of metrics or a scorecard to facilitate measurement of organisational
culture; and
f. I ongoing assurance of the organisational culture.
228. The work carried out by the Ethos programme led ultimately to the creation of the
Strategic People Plan (see the 3 Year People Plan and People Structure Report,
POL00447854) which is designed to enable the People team to transform Post
Office into ‘a great place to work’ by April 2027. The plan is focused on colleague
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experience, capability and inclusion. The Strategic People Plan was approved by
the Board in February 2024.
229. In January 2024 the SEG was introduced to streamline the number of direct reports
to the CEO from 10-12 to just 5. At that time, ownership of culture was moved away
from the Chief People Officer to me as CEO to recognise and signify the central
importance of Post Office’s culture and the need for change to be embedded
across every aspect of the business and its people. The CEO should epitomise the
culture of an organisation and should be held accountable for it.
230. It was apparent, during the course of the work undertaken by the Ethos Taskforce
that Post Office's organisational culture remained unclear. Post Office recognised
that assurance and measurement of its cultural health was still missing and that
ownership of culture was not seen to sit within the Group Executive. Please see
paragraphs 235-241 for further details.
231.In light of this recognition, the Ethos Programme was planned to continue for
several months. In fact, culture indicators were developed by the Ethos Taskforce,
working alongside the Institute of Business Ethics, in late 2023/early 2024. These
were used to report to the Board for the first time in July 2024 (measuring May
2024).85
® POL00446704.
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232. As part of the Ethos review of key documentation and frameworks used across the
business, it was determined that the existing Ethical Decision-Making Framework
(“EDMF’) contained in the Code of Business Conduct was not as embedded as it
could have been and had never been launched separately across the business
(see the June 2024 Code of Business Conduct Report, POL00447898).
233. In March 2024 a new EDMF was proposed. It challenged decision-makers to ask
the following questions:
a. “Have ! actively demonstrated Post Office behaviours when considering this
decision?”
b. “Is it legal?”
c. “AmI acting with integrity, fairness and thinking inclusively?”
d. “Have I sought out, listened to and taken different perspectives into account?”
e. “Would I be happy to explain this decision to relevant stakeholders, colleagues,
Postmasters, customers, communities?”
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234. The EDMF provided a mechanism for seeking advice and further guidance if the
answer to any of the above questions is “no”. The refreshed EDMF was
subsequently approved by the Executive on 6 March 2024, and it sits within an
updated Code of Business Conduct which was launched on 29 July 2024 (see July
2024 Code of Business Conduct (Long Form), POL00447907).
Evolution of WOW: the Behaviours Framework
235. In late 2023, Post Office engaged consultants, businessfourzero, to support an
assessment of its overarching cultural framework to ensure it was fit for the future.
The intention was to gain a collective understanding of the cultural conditions that
led to the failings of the past; to review the way that the current purpose, strategy,
and the Ways of Working were delivering for Post Office and to establish a new or
refreshed purpose.
236. These workshops were aimed at enabling the SEG to lead the evolution of the
business’ culture and own its development. As part of the workshops, the SEG
were presented with various stimuli to help develop the business outcomes and
new behaviours. These included headline questions, such as identifying Post
Office’s unique strengths and where most of the business’ energy was being spent,
and materials relating to reacting to a crisis. The SEG were also presented with
comments received from colleagues, the Colleague Engagement Survey 2022 and
SEG about the culture of the organisation. These centred around themes of:
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a. The culture was too slow and too risky — people reported feeling slowed
down by governance and failure to manage big risks;
b. Poor performance has zero consequences — a lack of accountability leading
to decreasing levels of motivation;
c. Confusion — not enough clarity on long-term priorities and a lack of
consistency in short-term decisions;
d. Mistrust; and
e. Passion for the business — a need to harness the commitment people at
Post Office have for the business and be aligned for the future.
237. Building on the work of businessfourzero, the SEG developed and approved the
new Post Office Behaviours Framework, to replace WOW. The Post Office
Behaviours Framework (see Post Office: “Our New Behaviours” presentation ("the
“Our New Behaviours’ Presentation’) (POL00447912) outlines the expected
behaviours of all staff and for those in management grade the behaviours will factor
into their performance assessment. The Behaviours Framework will systematically
assess behaviours, and ensure the principles are embedded into the employee
lifecycle.
238. The Behaviours Framework was launched with the Senior Leadership Team on 26
March 2024 and to the rest of the business on 17 July 2024 (see ‘Our New
Behaviours’ Presentation, POL00447912). The Behaviours Framework will
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replace WOW in the Performance Management Policy® as the measure against
which Post Office employees’ conduct will be measured.
239. The new behaviours on which Post Office will focus going forward, as set out in
the ‘Our New Behaviours’ Presentation (POL00447912) are:
a. “Be curious — Ask the questions that you think need to be asked and push
for the truth if you ever think it is missing.”
b. “Move it forward — Maintain momentum, keep pushing things closer to
completion and be demanding of others to do the same”.
c. “Own the outcome — Take responsibility for the issue and run with it until
it is resolved.”
d. “Back each other — We’re all in this together so embolden your colleagues
and catch them if they fall.”
240. Senior leaders are expected to live and to demonstrate these behaviours, and to
hold each other to account against them, and for this reason the Behaviours
Framework has been embedded into the Performance Management process and
into talent acquisition through the use of interview guides, as set out in the 'Our
New Behaviours’ Presentation (POL00447912).
241.Post Office has also taken steps to specifically promote positive leadership
behaviour:
°° ‘Our New Behaviours’ Presentation, POL00448418.
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a. In2023, Post Office held a leadership development programme "Leading to Serve"
for over 400 senior colleagues. I attended and introduced each one to explain why
service in leadership was important and culturally significant for the Post Office.
We have received very positive feedback from those attending these programmes;
and
b. In summer 2023, Post Office redesigned and relaunched the Post Office
Managers' Programme for all new people managers and existing managers up to
band 4.
Monitoring the effect of cultural change
242. From 2021 onwards Post Office has introduced a number of surveys to measure
engagement and collate feedback from both colleagues and Postmasters. Whilst
Post Office had previously conducted colleague engagement surveys until 2019,
the introduction of Postmaster surveys was a significant step to understand their
views and experiences of Post Office.
Postmaster surveys
243.The annual Postmaster Survey, launched in January 2021 as the Postmaster
Consultation Survey, and subsequently rebranded as the Postmaster Sentiment
Survey examines how Postmasters have received changes made by the
organisation. The 2024 Postmaster Sentiment Survey received 1,917 responses
which was an increase in the response rate from previous years, as outlined in the
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Engagement Survey Results Deep Dive, dated 8 July 2024 ("the “Engagement
Survey Deep Dive”) (POL00446704).
244. These surveys ask Postmasters to describe the relationship they have with Post
Office: whether they feel like a “subordinate business partner” or a “valued/equal
business partner” and how supported they feel by Post Office.
245. Of the 1767 Postmasters who responded in 2021, only 17% percent fell into the
highest category of feeling like a valued/equal business partner, while 25% fell into
the two lowest quartiles of feeling like subordinates. Positive sentiment increased,
peaking at 26% in 2023 but then fell back to 22% with a low quartile percentage of
29% in 2024.8’ This negative sentiment was ascribed cumulatively to the cost-of-
living crisis and its impact on remuneration, the ITV Drama and the Inquiry, the
disclosure of bonus payments and Project May (about which further detail will be
provided by John Bartlett in his Third Witness Statement).®° Over half of those
responded confirmed that the ITV drama, Mr Bates vs the Post Office, coupled with
Post Office’s appearance before the select committee had had a negative impact
on their reputation and staff.®°
246. The Postmaster Sentiment survey showed that remuneration is the top priority for
Postmasters and therefore is a key critical driver of positive sentiment: despite
87 POL00446704, page 4.
88 POL00446704, page 4; WITN11190300.
8 POL00446682, page 25.
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some increases, it remained a top priority for many Postmasters and the area with
the lowest perceived improvement.°°
Post Office employee surveys
247. The Colleague Engagement Survey was launched in October 2022. It is an annual
survey designed to listen to colleague feedback and identify meaningful actions to
address their concerns. The survey results are used to create action plans.
248. Previously, the survey results were provided to the Board through the CEO’s report.
In recognition of their significance and to better utilise the surveys to drive change
within the Post Office, the full results of the 2024 Colleague Engagement Survey
were presented to the Board. Post Office has shared the Colleague Engagement
Survey 2024 results with the SEG and Leadership Team as well as with colleagues
generally. All line managers have been given access to dashboards to enable them
to build local action plans.
249.The most recent results demonstrate that whilst Post Office employees remain
largely motivated to work for Post Office, with 73% feeling motivated (12% above
the UK norm), the 2024 survey found that Post Office staff reported finding it hard
to do their best due to cultural factors in the organisation. %'
9° POL00446704, page 5.
91 POL00446681, page 6.
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250. The 2024 Colleague Engagement Survey also recorded a high potential attrition
rate for senior leadership employees with 47% of senior leadership (reduced 18%
since 2022)? and 46% of Band 4 colleagues (increased 15% since 2022) reporting
a plan to leave Post Office within the next two years due to concerns over Post
Office’s culture and future.°* 18% of colleagues who planned to leave within the
next two years reported concerns about Post Office’s culture, and 22% did not feel
confidence in Post Office’s future.°*
251.A Pulse Survey is usually conducted in the Autumn of each year to monitor
progress against action plans. Post Office also produce an enterprise-wide action
plan in response to the Pulse Survey which is presented to Townhall events on a
quarterly basis to report on progress.
Confidence in Senior Leadership
252.As stated in paragraphs 74-145, Post Office has accepted, in the face of the
findings of the GT Governance Report that actions and improvements are required
to address a lack of confidence in senior leadership within Post Office
(POL00446477). This is reinforced by the findings of the Post Office Colleague
Engagement Survey (Core Report) (POL00448659) in which 35% of colleagues
®2 POL00446681, page 10.
°° POL00446681, page 10.
% POL00446681, page 9.
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reported that they had confidence in senior leadership.%° This has fallen 5% since
the 2023 survey and 4% since the 2022 survey.
253. Analysis of the results suggest that confidence in senior leadership is important for
pride and belonging. 45% of those in senior leadership roles had a negative
sentiment towards pride for working for Post Office (up 30% from 2023). %
254.42% of senior leadership colleagues reported feeling able to balance their work
and personal life (a decline of 18% since 2022), and 4 in 5 have felt under constant
strain in recent months.%”
255. There were some positive findings relating to managers, including support for
career development (up by 3% since 2022) and help with prioritising work (up by
7% since 2022). Colleagues reported a broadly positive experience of their
managers and colleagues’ experiences of their line managers are seen to have
improved across Post Office since 2022.
256. Post Office identified key takeaways from the Colleague Engagement Survey 2024.
This included awareness that communications issues were undermining
colleagues’ confidence in Post Office and senior leaders; Post Office colleagues
were noted to be asking for a refreshed strategic intent beyond 2025 to be
®5 POL00448659, page 15.
% POL00448659, page 7.
97 POL00448659, page 11.
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communicated. Among matters of particular concern was the fact that colleagues
with a disability were found to be least likely to feel included at Post Office; those
from diverse ethnic backgrounds were less likely to feel positive about career
progression, and senior women were the group most likely to have received
unwanted comment.
257.In addition to business-wide and local (functional) plans, Post Office intends to
produce three action plans that are specific to certain populations whose
experience of working for Post Office differs from the norm. These are:
a. Senior Managers and SLP colleagues — the plan will focus on addressing the strain
they report they are under;
b. colleagues with a disability — the plan will focus on their level of inclusion; and
c. colleagues from an ethnic minority background — the plan will focus on their career
progression.
Cultural Conclusions in the GT Governance Report
258. The Post Office has accepted the five key findings of the June 2024, the GT
Governance Report.®* The conclusions in that report have demonstrated that Post
Office still has much to do in order to address a lack of trust, a lack of accountability
and weaknesses in its performance management.
°8 POL00446477.
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259. Specifically, the Post Office has accepted Grant Thornton’s conclusions that,
notwithstanding the actions taken described above, Post Office:
a. is plagued by a pervasive culture of reluctance to make decisions;
b. is driven by fear of public scrutiny;
c. has a lack of clear accountability; and
d. has areluctance to manage underperformance. °°
260. The GT Governance Report concluded that these factors had led to a perception
of “them” and “us” within the ownership structure, which was hindering the ability
to identify leadership capability and capacity within Post Office, resulting in a
“layering” of decision-making forums.1°°
261.Post Office has accepted that we need “a unifying strategy, greater role clarity
through updating foundational governance documents, streamlined decision-
making processes, significant improvements in succession planning and a cultural
shift towards accountability and long-term planning” as was recommended in the
GT Governance Report. '°' The GT Governance Report made a number of
recommendations, some of which were within Post Office’s control, others of which
°° POL00446477.
10° POL00446477, page 7.
11 POL00446477, page 7.
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were subject to Shareholder approval/buy-in in particular the need to address the
lack of a unifying purpose and group-wide strategy between Post Office and the
Shareholder and a perceived “conflict around the role of the Shareholder versus
the Board.”
Actions taken in response
262.The following GT Governance Report recommendations, which have been
accepted by the Board, were concerned particularly with culture:
a. Streamlining the executive level committees. '° Post Office proposes to
build on this recommendation plus any further recommendations that might
be made by the Inquiry, from October 2024 onwards.
b. Embedding a new Leadership Team with performance-based job
descriptions.'™ This is already in progress as part of the Reward and Role
Review scheduled to take place by end September 2024.
c. Agreeing cultural / leadership principles.’ This has formed part of the
refreshed Behaviours Framework, launched in July 2024 (see ‘Our New
Behaviours’ Presentation, POL00447912).
‘02 POL00446477, page 7.
103 POL00446477, page 13.
‘4 POL00446477, page 13.
105 POL00446477, page 13.
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d. Ensuring strategic design is supported by a culture framework with
performance management as a key pillar. 1%
e. Considering a refresh of values and aligning with the culture framework and
Project Ethos work'®’ — a project already in train from the second quarter of
2024.
f. Developing a culture dashboard: '* in train as culture indicators (see
paragraph 264).
g. Creating a high-level communication plan with key milestones focusing on
the themes of reset (governance and leadership), renew (strategic
framework) and reboot (culture and behaviours).'°? This is proposed to be
completed as part of the Strategic Review (on which see below).
h. Urgently addressing Executive succession planning including ED&l
principles with input from Nominations Committee and SEG:'"° this is in
progress with Neil Brocklehurst (“Interim COO”) appointed in June 2024 and
Preetha McCann (“Interim CFO”), Sarah Gray (“Interim Group GC”) and
John Dillon (“Interim GC (Inquiry)”) commencing their roles in July 2024.
16 POL00446477, page 13.
‘7 POL00446477, page 13.
18 POL00446477, page 13.
18 POL00446477, page 13.
110 POL00446477, page 14.
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263. As part of the response to the findings of the final GT Governance Report, Post
Office produced a set of culture indicators, the purpose of which was to provide a
single set of measurements by which the culture of the Board of Post Office could
be considered and assessed (see Engagement Survey Deep Dive, POL00446704).
This is an attempt to bring together the results of the many external and internal
reports and reviews and surveys into one “dashboard” of information.
264. The resulting “dashboard” (also referred to internally as both a “scorecard” and a
“matrix”) establishes a mechanism by which updates on culture can be provided to
the Board on a twice-yearly basis and to the SEG every two months. The decision
to create this singular matrix was in recognition of the fact that the Board had
historically been presented with multiple competing reports and updates which
Post Office recognises was unhelpful to the development of a coherent culture.
265. The dashboard has 27 indicators that providing a quantitative view of culture, with
associated supporting commentary; outcomes from any employee or Postmaster
engagement surveys; and outcomes from any assurance work completed on
culture. They were developed by working with stakeholders from the Ethos
Taskforce and have been reviewed by the Institute of Business Ethics, which has
provided assurance that the proposed set of indicators would bring Post Office in
line with best practice ethical culture reporting seen in the big banks and big 4
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accounting firms. The indicators were taken to Board for the first time on 8 July
2024.
Staffing and remuneration
266.Post Office has faced a significant degree of staff churn with a great deal of
movement of senior staff at a Board, SEG and Leadership Team level. The GT
Governance Report in particular noted problems arising out of “the complexity of
legacy reward schemes, mistrust around pay, high staff churn and confusion due
to lack of corporate memory”.1""
267. Post Office plays an important social function, but it remains, as a result of
decisions made by successive administrations, a corporate entity run as a
business.
268. What this means is that Post Office is required to recruit its executives in the same
manner and on the same terms as other businesses. As the high churn rate of staff
demonstrates, maintaining valuable staff during the last five years of crisis has not
been easy. Competitive pay commensurate with other executive roles is vital in
reducing senior colleague churn within the business. Post Office recognises the
difficulty - and resentment — this engenders at a time when Postmasters do not
feel adequately remunerated for the work they do.
11 POL00446477, page 50.
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269. In December 2023 the GT Rem Co Report (POL00446475) set out the importance
of strategically linked executive pay. It noted that Post Office’s remuneration
strategy was based on attracting, motivating and retaining the right talent, using
appropriate incentives to reward the achievement of strategic business goals while
reinforcing a culture of sustainable performance, partnership and mutual ways of
working with a transparent approach to the disclosure of pay. 112
270.The GT Rem Co Report recommended that Post Office re-engages with the
Shareholder prior to the December 2024 conclusion of the current three-year
funding cycle." It further recommended that Remuneration Committee should not
award any element of bonus specifically relating to the Horizon IT Inquiry both now
and going forward. ''* The GT Rem Co Report stated that both of these
recommendations had already been implemented.‘
271.In terms of future remuneration, the GT Rem Co Report recommended that the
development and reporting of remuneration strategy, including incentive schemes,
be managed by the CPO rather than any other senior executives to ensure
accountability, transparency, objectivity and consistency in the process. '"®
"2 POL00446475, page 17.
"8 POL00446475, page 15.
14 POL00446475, page 5.
"8 POL00446475, page 5.
“6 POL00446475, page 17.
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272.Post Office recognises that it has historically had issues with remuneration,
particularly with the payment of bonuses. It recognises that this issue has caused
some conflict in the organisation, in particular given Postmasters’ ongoing and
legitimate concerns regarding their own remuneration.
273.1 have committed that Post Office will work towards sharing 50% of branch
generated revenue with Postmasters, which represents a significant change to
their remuneration. In the last financial year Post Office achieved 45.6% and will
continue to drive this figure upwards.
E: Conclusions
274. As set out above, during my time in the Post Office there have been a significant
number of programmes, changes and initiatives to address Post Office’s culture.
However, further change is still required. Post Office has already committed to the
following, but the direction of travel for the Post Office will inevitably also be shaped
by the outcomes of the Strategic Review and the outcome of this Inquiry:
a. Work is planned from October 2024 to March 2025, with the intention that it
will capture any further reflections and conclusions produced by the Inquiry
specifically addressing streamlining the executive level committees,
simplifying decision-making structures to improve approvals, speeding up
of decision-making, reduce siloed working, and free up capability that is
currently taken up by producing multiple papers, and reviewing and
communicating decision-making protocols and accountabilities.
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b. Anew “Reward and Role Review” is scheduled to take place by the end of
September 2024. Organisational design work includes a review of
accountabilities, with a focus on SEG, the Leadership Team, Senior Leader
Population and Band 4; this will clarify who is accountable for what and
remove duplication.
c. Work is planned from October 2024 to March 2025 to design new terms of
reference for committees reporting into SEG.
d. As set out above, refreshed behaviours have been launched to create new
cultural/leadership principles aimed at holding members of the organisation
to account; values have been refreshed as part of the Ethos programme.
e. Culture framework and performance management will form part of the
People Plan.
f. A strategic skills gap review is proposed to ensure better succession
planning. A skills matrix for the leadership team with appropriate job
descriptions and performance matrix is proposed to support this action.
275.I recognise that the GT Governance Report, its recommendations and the resulting
actions, as well as the Teneo review, will focus on how Post Office functions rather
than on Postmasters explicitly. However, the best way for Post Office to effectively
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serve Postmasters and thereby regain their trust is for Post Office itself to function
effectively, ethically and sustainably.
276.As described above, the People Function intends to align structures to support
future opportunities, e.g. strengthening the contractor resourcing team and
processes to better manage the way that contractors (contingent workers) are used
within Post Office, reducing reliance, risk, cost and bringing in better in-house
capability. Post Office will ensure a consistent way of recruiting is deployed across
the organisation, thereby removing single points of failure and providing
opportunities for career development and growth. It is hoped and anticipated that
this will allow growth within the organisation and thereby foster greater staff
retention and ensure future corporate collective skills and memory are preserved.
277.Post Office acknowledges that the systemic changes that needed to happen
through the leadership of the business partnered by a strong People Function have
not previously been in place. Post Office recognises that insufficient work was done
to plan for succession, to ascertain how staff felt about the organisation and to
ensure that the right people remained in the right jobs. It has done the work to
explore these issues and has a clear plan for the future but recognises a significant
amount of work remains to be done.
278. Post Office intends properly to embed its new Behaviours Framework (see ‘Our
New Behaviours’ Presentation, POL00447912) into the organisation by promoting
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them from the very beginning of the staff lifecycle: selection and recruitment will be
informed by understanding and application of the Behaviours; promotion will be
contingent on demonstration of the Behaviours; those who do not adopt them will
be challenged. Appraisal will focus on application of those Behaviours.
279. Post Office has been very explicit that the Behaviours are not simply a framework
for leaders: they are the behaviours all staff at the organisation are expected to live
by. This is a significant change and one which it is hoped will have a significant
effect on Post Office’s culture and conduct.
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Statement of Truth
I believe the content of this statement to be true.
Siar: el 5
Date: 02.09.2024
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Index to the First Witness Statement of Nick Read
No. URN Document Description Control Number
1.] WITN11610100 I First Witness Statement of Tracy WITN11610100
Marshall
2.}I WITN11600100 I First Witness Statement of Melanie I WITN11600100
Park
3.] WITN11190100 I First Witness Statement of John WITN11190100
Bartlett
4.I WITN11190200 I Second Witness Statement of John I WITN11190200
Bartlett
5. I WITN11120100 I First Witness Statement of Rachel I WITN11120100
Scarrabelotti
6. I WITN11120200 I Second Witness Statement of WITN11120200
Rachel Scarrabelotti
7. I WITN11120300 I Third Witness Statement of Rachel I WITN11120300
Scarrabelotti
8. I WITN11120400 I Fourth Witness Statement of Rachel I WITN11120400
Scarrabelotti
9.] WITN11120500 I Fifth Witness Statement of Rachel I WITN11120500
Scarrabelotti
10] WITN11110100 I First Witness Statement of WITN11110100
Jonathan Hill
11] WITN11110200 I Second Witness Statement of WITN11110200
Jonathan Hill
12] WITN03680200 I Second Witness Statement of WITNO03680200
Simon Oldnall
13] WITN03680300 I Third Witness Statement of Simon I WITN03680300
Oldnall
Page 133 of 140
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WITN00760100
14] WITNO9890500 I Fifth Witness Statement of Simon WITNO9890500
Recaldin
15] POL00448415 I 2023 Board Away Day Session 1: POL-BSFF-119-
POL Today 0000003
16] POL00446477 =I Grant Thornton Governance Report I POL-BSFF-099-
2024 0000003
17] POL00423699 Email from Alisdair Cameron to Nick I POL-BSFF-
Read, Tim Mclinnes and Ben Foat 0238490
re The robustness of our
governance
18] POL00448435 =I Letter to Tim Parker and Nick Read I POL-BSFF-119-
from the Department for Business 0000023
and Trade re: Funding for Post
Office Limited for the next spending
review period dated 11 March 2022
19] POL00448769 I Final Review of the Transformation I POL-BSFF-127-
Incentive Scheme (TIS) 0000001
20} POL00363154 =I Simmons & Simmons - Department I POL-BSFF-
for Business and Trade - Review of I 0191157
the government relevant to Post
Office Limited's Senior Executive
Remuneration
21} POL00446475 December 2023 Grant Thornton POL-BSFF-099-
Remuneration Review 0000001
22I POLO0446476 I Grant Thornton: Post Office Limited I POL-BSFF-099-
Board Effectiveness Report dated 0000002
19 June 2024
23} POL00362299 Post Office Limited: Shareholder POL-BSFF-
Relationship Framework Document I 0190809
24I POL00448772 =I Post Office Draft Framework POL-BSFF-127-
Document (in line with Public 0000004
Corporations Template)
25] POLO00447855 =I Articles of Association POL-BSFF-106-
0000095
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26} POLO0447857 I Amended Articles of Association POL-BSFF-106-
0000097
27I POL00447838 I Board Evaluation Report 2022/2023 I POL-BSFF-106-
dated 6 June 2023 0000078
28] POL00447844 I Group Executive Report - Ethos POL-BSFF-106-
Programme dated 13 September 0000084
2023
29] POL00447845 I Post Office Board Report — Ethos POL-BSFF-106-
Programme dated 26 September 0000085
2023
30] POL00447854 Post Office Board Report — 3 year POL-BSFF-106-
People Plan and People Structure 0000094
dated 27 February 2024
31] POL00447898 Post Office Board Report — Code of I POL-BSFF-106-
Business Conduct update dated 4 0000138
June 2024
32] POL00447907 Code of Business Conduct (long POL-BSFF-106-
form) last updated July 2024 0000147
33] UKGI00044323 I Post Office Limited Annual Report I POL-BSFF-106-
and Consolidated Financial 0000089
Statements (2022/2023)
34] UKGI00044317 I Letter to Henry Staunton from the POL-BSFF-106-
Department for Business and Trade
dated 29 June 2023
0000081
35} POL00438073 2021/22 Board Evaluation dated 29 I POL-BSFF-095-
March 2022 0000009
36] POL00447866 I Board Evaluation Report 2022/2023 I POL-BSFF-106-
dated 28 March 2023 0000106
37I POL00447842 POL Board Evaluation Report POL-BSFF-106-
2022/23, dated 11 July 2023 0000082
38] POL00447836 I Audit, Risk and Compliance POL-BSFF-106-
Committee Report - Committee 0000076
Evaluation 2022/23 dated 16 May
2023
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39] POL00447852 =I Audit, Risk and Compliance POL-BSFF-106-
Committee Report - Committee 0000092
Evaluation 2022/2023 dated 29
January 2024
40} POL00447837 Nominations Committee Evaluation I POL-BSFF-106-
2022/23 dated 6 June 2023 0000077
41} POL00448414 I Grant Thornton Governance and POL-BSFF-119-
Board Effectiveness Reviews: 0000002
Recommendations tracker as at 26
July 2024
42) POL00447839 Remuneration Committee Report — I POL-BSFF-106-
Remuneration Committee 0000079
Evaluation Report 2022/2023 dated
3 July 2023
43] POL00447806 I Remediation Committee — POL-BSFF-106-
Remediation Committee Evaluation I 0000046
Report 2022/2023 dated 16 August
2023
44) POL00448770 I Post Office Governance Review POL-BSFF-127-
(Draft) 6 February 2024 0000002
45I POL00448771 I Post Office Governance Review POL-BSFF-127-
(Draft) 4 March 2024 0000003
46} POL00448773 I Email re Postmaster Voice POL-BSFF-127-
Workshops (16 August 2024) 0000005
47I POL00448774 I 2018 Franchise Landscape Report I POL-BSFF-127-
0000006
48} POL00448775 I Postmaster Oversight Committee POL-BSFF-127-
Powerpoint 0000007
49I POL00448776 I Strengthening the influence of POL-BSFF-127-
postmasters — executive summary 0000008
statement (August 2024)
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50] POL00447913 I Board Skills Matrix POL-BSFF-106-
0000153
51] POL00448417 I Letter to Kevin Hollinrake MP, POL-BSFF-119-
Parliamentary Under Secretary of 0000005
State at Department of Business
and Trade dated 7 December 2023.
52} POL00447914 I Correspondence from Deloitte POL-BSFF-106-
dated 19 July 2024 0000154
53] POL00447908 I Email from Owen Woodley to Carol I POL-BSFF-106-
A Murray, cc Simon Jeffreys, Nigel I 0000148
Railton and others re RE: Proposed
changes to Internal Audit
governance arrangements
54] POL00448501 Correspondence from Deloitte POL-BSFF-119-
dated 31 July 0000077
55] POL00447853 Post Office Group Policy: Risk POL-BSFF-106-
Management v1.5 0000093
56] POL00447894 Post Office Risk Management POL-BSFF-106-
Policy Guidelines v1.2 0000134
57I POL00363155 Terms of Reference of the Audit, POL-BSFF-106-
Risk and Compliance Committee 0000090
58} POL00447765 Letter to Dr Vikas Shah, Chair of POL-BSFF-106-
Audit, Risk and Assurance 0000005
Committee at BEIS dated 19
December 2022.
59] POL00447910 I Terms of Reference of Risk and POL-BSFF-106-
Compliance Committee 0000150
60] POL00447891 Post Office ServiceNow Risk POL-BSFF-106-
Management User Guide 0000131
61] POL00447909 I Post Office Risk Champion POL-BSFF-106-
Framework dated April 2024 0000149
62] POL00447843 Audit, Risk and Compliance POL-BSFF-106-
Committee Report — Draft Internal 0000083
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Control Framework dated 26
September 2022
63] POL00447896 Post Office Group Assurance POL-BSFF-106-
Standard Operating Procedures 0000136
64] POL00447840 Post Office Group Policy: Internal POL-BSFF-106-
Audit Charter (V0.2) 0000080
65] POL00447894 Post Office Risk Management POL-BSFF-106-
Policy Guidelines v1.2 0000134
66] POL00447846 =I Audit, Risk and Compliance POL-BSFF-106-
Committee Report — FY22/23 ARA I 0000086
Update paper dated 27 November
2023
67I POL00447847 Audit, Risk and Compliance POL-BSFF-106-
Committee Report — Accountable 0000087
Person dated 27 November 2023
68} POL00448486 Email regarding Hollinrake/Read POL-BSFF-111-
Monthly Meeting dated 23 January I 0000001
2024
69} POL00448489 Email regarding Ministerial Meeting I POL-BSFF-111-
& Today's Statement dated 19 - 23 I 0000004
February 2024
70} POLO0448490 Email regarding Nick March POL-BSFF-111-
Ministerial Meeting dated 12 - 22 0000005
March 2024
71} POL00448495 CEO Briefing Notes, Meeting with POL-BSFF-111-
Minister of State, Kevin Hollinrake 0000010
dated 30 April 2024
72I POLO0448493 Email regarding Nick Read/Minister I POL-BSFF-111-
Hollinrake Monthly Meeting dated 0000008
22 — 25 April 2024
73] POL00448492 Shareholder Quarterly Briefing POL-BSFF-111-
Progress Report dated 11 April 0000007
2024
74I POL00448500 =I Shareholder Quarterly Briefing POL-BSFF-111-
Progress Report dated 11 July 2024
0000012
Page 138 of 140
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75) POLO0448488 I POL/NSFP/DBIT Working Group POL-BSFF-111-
Meeting Agenda and Minutes dated I 0000003
17 January 2024
76) POL00447762 Report by McKinsey — POL-BSFF-106-
Organisational Health Survey - 0000002
“Purpose, Strategy and Growth”
Board Presentation dated 26
November 2019
77I POLO0030396 Horizon Report / Report on the POL-BSFF-114-
progress made to address six areas I 0000005
derived from HlJ Findings, KPMG
LLP, June 2021, V4.2
78) POL00038115 Deloitte Report — Post Office POL-BSFF-106-
Limited: Postmaster Journeys - 0000004
Final Report dated March 2021
79] POL00447851 Culture IDG update dated 16 POL-BSFF-106-
January 2024 0000091
80} POL00446681 Post Office presentation titled POL-BSFF-097-
‘Engagement Survey 2024' 0000009
81} POL00446682 Postmaster Sentiment Survey POL-BSFF-097-
Results - April 2024 0000010
82} POL00448664 Inclusion Playbook POL-BSFF-121-
0000011
83] POL00448662 I GE Report dated 30 November POL-BSFF-121-
2022 entitled 'Equity, Diversity and I 0000009
Inclusion Commitments’)
84} POL00447900 I Grant Thornton: ED&l at the Post POL-BSFF-106-
Office — Inclusions Insights 0000140
Assessment dated November 2023
85) POL00448413 ED&l Summit presentation dated 11 I POL-BSFF-119-
June 2024 0000001
86} POL00447915 I Ways of Working - Graphics POL-BSFF-106-
0000155
87] POL00448418 I Post Office Performance POL-BSFF-119-
Management Policy 0000006
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88] POL00447912 I Post Office: “Our New Behaviours” I POL-BSFF-106-
presentation 0000152
89] POL00446704 Engagement Survey Results dated I POL-BSFF-097-
8 July 2024 — Board Deep Dive 0000032
90} POL00448659 =I Colleague Engagement Survey POL-BSFF-121-
Results 2024 0000006
91] POL00447848 I Post Office Board Report - Ethos POL-BSFF-106-
and People Update dated 28 0000088
November 2023
92) POLO0447911 Code of Business Conduct (short POL-BSFF-106-
form) 0000151
93} POL00447916 Post Office Scandal Live Training POL-BSFF-106-
Schedule and Script dated February
2024
0000156
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