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Witness Name: Owen Woodley
Statement No.: WITN11380100
Dated: 28 August 2024
POST OFFICE HORIZON IT INQUIRY
FIRST WITNESS STATEMENT OF OWEN WOODLEY
I, Owen Pearson Woodley, will say as follows:
INTRODUCTION
1. lam an employee of Post Office Limited (“POL”) and, at the time of writing this
witness statement, I hold the position of Acting Chief Executive Officer.
2. This witness statement is made to assist the Post Office Horizon IT Inquiry (the
“Inquiry”) with the matters set out in the Rule 9 Request issued to me dated 22
July 2024 (the “Request’). The Request was made as part of Phase 7 of the
Inquiry, which is focusing on "current practice and procedure and
recommendations for the future".
3. I have instructed Baker McKenzie to represent me in respect of the Inquiry.
Baker McKenzie have assisted me to prepare this witness statement, although
I confirm that the evidence it contains is my own.
BACKGROUND AND CONTEXT
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4. Atthe outset, I wish to express that I am horrified by POL’s previous treatment
of Postmasters, and in particular the callous lack of empathy that the
organisation displayed in the past. I have attended ten restorative justice
meetings with ten victims of the scandal and members of their families. Despite
the fact that I was not personally involved with the Horizon scandal, I felt that it
was very important to attend these meetings as a representative of POL, in
order to listen to the victims’ accounts and to apologise on behalf of POL. Their
stories have been harrowing to say the least, and it is clear that POL’s treatment
of Postmasters has left deep, permanent scars.
5. It has been important to me as a leader at POL to seek to make things right in
our organisation. I feel proud to have played a part in setting change in motion
and seeking to address the previous failings of the organisation, with the
intention that the terrible wrongs of the past cannot be repeated. Postmasters
are much more firmly at the heart of the business now and play a critical and
irreplaceable role in communities across the UK — I feel passionately that they
must be safeguarded. Whilst improvements have been made, changing the
overall culture of an institution like POL is ultimately an ongoing, long-term
process (as it would be in any institution with a similar history), and the task is
certainly not yet finished.
6. To set in context the evidence I provide below, paragraph 1 of Annex A of the
Request provides that:
"The Inquiry is seeking a detailed statement from you as an individual
with present involvement in Post Office Limited (‘POL’) addressing the
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questions below to assess what changes have been made within the
organisation following (a) the findings of Fraser LJ in the Common
Issues Judgment of 15 March 2019 and the Horizon Issues Judgment
of 16 December 2019, and (b) resulting from evidence arising out of
the Inquiry, which go to the present relationship between POL and its
Subpostmasters (‘SPM’s’)" (my emphasis).
7. I am not a Core Participant in the Inquiry, nor has it been possible for me to
follow the Inquiry sufficiently closely to consider all of the evidence arising out
of it that has been made public, given the demands of my role. Nevertheless, I
have watched the proceedings as closely as possible, and I have some
knowledge of the evidence on which the Inquiry has focused through regular
internal summaries and discussions with colleagues. As a member of the
Strategic Executive Group (“SEG”), and an attendee at POL Board meetings, I
have received high-level updates on the witness evidence given to the Inquiry
so far. I have also attended the Inquiry on a number of occasions. However, I
do not have comprehensive knowledge of the evidence that has been given to
(or has arisen out of) the Inquiry to date.
8. I note that the Request makes reference to “subpostmasters” or “SPMs’.
However, in this witness statement I have instead referred to “Postmasters”,
given that this is the terminology that we use at POL on a day-to-day basis
PROFESSIONAL BACKGROUND
9. I briefly set out my educational and professional qualifications, as well as my
career background.
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10. I worked in the Land Registry for a year after leaving school, before joining
Barclays Bank PLC in September 1986. I moved onto the Barclays
Management Development Programme, before taking on various roles across
commercial banking, retail banking, and change management.
11.During my career, I have completed various professional courses and
qualifications, including The Wolfson Course & Programme at Cambridge
University (1993), the EU Bankers’ Forum Frankfurt Strategy Programme (1997
— 1999), and the Whitehall & Industry Group Executive Courses (2001 — 2003).
12. Before I joined POL I had a varied career in financial services, most recently as
Managing Director of the retail business at Lloyds Bank, and before that in
senior roles at Barclays, Secure Trust Bank, and Shawbrook Bank.
13.1 joined POL on 6 June 2016 in the newly created role of Sales Director. My
key mandate was to find ways to increase revenues in the branch network.
14.On 9 January 2017 I became Managing Director of Post Office Money, the arm
of POL that worked in partnership with the Bank of Ireland, MoneyGram and
First Rate Exchange Services (in particular) to provide savings products,
mortgages, loans, credit cards, international remittances, and travel money
products to customers, both in branch and online.
15.On 12 February 2018, I was given the new role of Chief Executive, Financial
Services & Telecoms. In light of that promotion, I also joined the SEG (which
was then known as the Group Executive Committee or "GE"). In this new role,
my responsibility for Post Office Money continued. I also took on responsibility
for, and joined the board of, Post Office Management Services Limited
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(‘POMS’), the regulated subsidiary of POL that provides a range of general
insurance and protection products. I also became responsible for POL’s
telecoms and broadband business.
16.From 1 February 2020, I was given additional responsibility for POL’s Mails
product set (Royal Mail Group’s label propositions, stamps etc.); Banking
product set (bank withdrawals and deposits over the counter and ATMs);
Payzone Bill Payments Limited (payments to energy companies like British Gas
etc.) where I joined the Board and became the Chair; Digital Identity services
(at the time, the provision of the Government's 'Verify' service and branch
identity verification services); and the Group Marketing and Digital functions.
My job title subsequently changed to Group Chief Commercial Officer.
17.On 17 July 2023, I was appointed Deputy Chief Executive Officer (“DCEO”), a
role which encompassed my existing responsibilities (apart from the Group
Marketing and Digital functions, which moved into the reporting line of the
Group Chief Retail Officer as of that date), together with business sponsorship
of the Strategic Platform Modernisation Programme ("SPMP"). The SPMP is
the technology programme to replace the Horizon system, and I address my
role in this regard in greater detail below at paragraph 28. I was also asked to
establish a new programme to oversee cultural change across the organisation.
18. Prior to becoming DCEO, I had previously attended group Board meetings as
a presenter and, fairly regularly, as an observer. Upon my appointment to the
role of DCEO I became a standing attendee/observer at group Board meetings,
and at a number of the Board’s sub-committees, including the Investment
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Committee, the Audit Risk & Compliance Committee ("ARC"), and latterly the
Nominations Committee.
19.In January 2024, the reporting line of the Group Chief Retail Officer (GCRO”)
moved to me in order to reduce the number of direct reports into the Group
CEO, Nick Read, and to provide him with more capacity. During the following
three months, my work was almost entirely taken up with handling the public
reaction to, and internal impacts of, the ITV drama on the Horizon scandal (Mr
Bates vs The Post Office), my executive oversight of a whistleblowing
investigation, and the events that unfolded as a result of the Department of
Business and Trade (DBT) Select Committee hearings in the early part of the
year.
20.In early 2023 I had advised Nick of my intention to leave POL in March 2024.
Later in 2023 I was asked by the then Chair of POL (Henry Staunton) if I would
extend my departure date until at least March 2025. I declined, but I agreed to
stay on in the business until the summer of 2024. On 22 March 2024, it was
announced publicly that I would be leaving the organisation at the end of August
2024.
21.On 20 June 2024, Neil Brocklehurst was announced as Interim Chief Operating
Officer. Neil took on all of my day-to-day responsibilities and reporting lines with
effect from 1 July 2024. However, I have retained oversight of POL’s "Strategic
Review", an initiative incepted by the current Interim Chair, Nigel Railton, which
aims to determine the future direction of the business.
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22.On 15 July 2024, it was announced that Nick would be spending all of his time
preparing for Phase 7 of the Inquiry, and that I would become Acting CEO,
taking on his day-to-day accountabilities for the seven weeks until my departure
at the end of August 2024. I describe these accountabilities in paragraph 42
below.
HORIZON IT SYSTEM
23.1 have been asked to summarise my understanding of and experience with the
Horizon IT system (“Horizon”).
24.In accordance with my accountabilities, which I set out at paragraphs 13 to 19
above and 39 to 42 below, during my time working at POL I did not have
ultimate responsibility for the management or oversight of Horizon until I
became Acting CEO in mid-July 2024. However, I have gained a good
understanding of the role that Horizon plays in enabling Postmasters to trade
on a day-to-day basis across POL’s wide set of products and services, such as
mails, banking, travel money, and Government services. In particular, I have
carried out numerous branch visits through my time at POL, during which I have
often witnessed Horizon in action. As part of these visits, given the fact that
most of my time at POL has been focused on the commercial product set,
Postmasters have invariably wanted to discuss with me what commercial
improvements can be made to their businesses. Therefore, my conversations
with Postmasters during those visits (insofar as they have related to Horizon)
have mostly been about the ease of interactions with customers, and the
degree to which Horizon can enable Postmasters to sell more products.
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25. During my branch visits to the best of my recollection, no Postmaster has raised
any concerns with me about technical issues related to Horizon. However,
Postmasters have often made comments to me about the need to improve the
speed of transactions, particularly in light of the extension of Post Office’s mails
offerings and the introduction of new parcel carriers. Over the last two years
we have brought products from Amazon, Evri and DPD into the network to offer
to customers. This has filled the gap left by Royal Mail Group's clear intent to
reduce sales of its products at Post Office branches, and to drive its customers
towards self-service channels. Some of POL’s new carrier products have been
built into Horizon, whilst others have been accessed by Postmasters and their
teams through separate devices in their branches.
26.1 am aware that there has been a lot of work carried out by the Technology
function (which has always reported directly into the CEO via a Chief
Information Officer or a Chief Transformation Officer) to address the findings of
Fraser LJ’s Horizon Issues Judgment. This was originally overseen by a
committee called the Improvement Delivery Group ("IDG"), which I believe was
established in February 2021 and disbanded around March 2023. The IDG was
chaired by Dan Zinner, the Chief Operating Officer at the time and a direct
report of Nick Read. I believe I only attended this committee on one occasion.
A follow up version of this committee, ‘IDG 2.0’, was established in April 2023
and I believe it ran until February 2024. Nick, as CEO, was a standing attendee.
I attended this iteration of the committee a handful of times and observed a
clear commitment to address the issues raised in both the Common Issues
Judgment and the Horizon Issues Judgment.
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27.1 am aware that, over the last few years, POL’s internal audit function has
undertaken audits of the various phases of the Technology team’s Horizon
Issues Judgment remediation programme. Their findings have been presented
to the ARC. I am also aware that a further review to assess progress in
addressing the Horizon Issues Judgment is currently being carried out by
POL’s assurance function, which I understand was requested by IDG 2.0. I
understand that the outcome of the review will be considered by the SEG and
the Board in the coming weeks.
28.Upon being appointed DCEO in July 2023, I became the Chair of the steering
committee overseeing the programme to develop the New Branch IT platform
(“NBIT”), also known as the SPMP (Strategic Platform Modernisation
programme). I chaired this committee for approximately ten months. The
committee has focused little on Horizon during this phase of the build work.
Instead, in recent months it has focused on managing the costs of developing
NBIT and getting an NBIT prototype rolled out to a small number of branches
for testing. At paragraphs 144 to 151 below I address my understanding of what
lessons have been learnt from the rollout of Horizon insofar as relevant to the
development of its replacement.
EXPERIENCE OF THE POL STRATEGIC EXECUTIVE GROUP
Training and induction
29.1 have been asked to set out the nature of any training and induction that I
received prior to or on my appointment to the SEG and on my promotion to
DCEO, and the quality and completeness of any such training and induction.
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30.1 did not receive any training or formal induction when I was appointed to the
SEG’s predecessor (the GE) in early 2018. In addition, I did not receive any
training or induction specific to my promotion to DCEO in July 2023, or when I
was appointed Acting CEO in July 2024. At the time of these appointments I
was not concerned about the lack of training, given that I had considerable
experience of sitting on other executive committees and boards before I joined
POL, and I had developed an understanding of POL's business during my time
as Sales Director and then Managing Director of Post Office Money. However,
and as I reflect for this witness statement, I think that given the diverse levels
of experience and the mix of backgrounds of the current members of the SEG,
the introduction of a standard induction and onboarding process, including a
focus on critical matters for POL, would be valuable in the future.
3
. More broadly, POL has not invested materially in training and development for
its executives in recent years. In the context of an increasingly challenging
financial climate at POL, partly because of difficult trading conditions and partly
because of many other demands on limited budgets, such training has not been
prioritised. I think that the introduction of an executive training program would
be beneficial to help new executive recruits to develop their leadership and
business management skills, as is standard practice in many companies.
32. In addition, my view is that POL needs to invest further in educating executives
and managers on the practical challenges of running a Post Office branch day
to day. POL’s initiatives such as “Adopt an Area” - where senior managers and
executives have been asked to get to know Postmasters in a specific area of
the POL network and bring any issues raised back to the centre - have
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encouraged a very significant increase in branch visits by POL leaders (which
were more or less limited to helping out branches during the Christmas peak
trading period when I first joined the business). These engagements, alongside
the introduction of Postmaster non-executive directors to the Board, have
helped to bring Postmasters a good deal closer to senior leaders.
Briefings about the Horizon scandal
33.1 have also been asked to set out what briefings (if any) I received on the issues
addressed by the Inquiry, such as Horizon, the prosecution of Postmasters,
and the Group Litigation Order (“GLO”) before or on joining the SEG, and the
details and quality of any such briefings.
34. Before joining POL, I did not have any knowledge of Horizon or the prosecution
of Postmasters. I was not conscious of any particular media coverage at that
time and these issues were not referred to in my recruitment interviews with
POL.
35.Upon joining the business in 2016 I did not receive any briefings on Horizon,
the prosecution of Postmasters, or the GLO. I do not recall any kind of
discourse within the business at the time about the prosecution of Postmasters,
or any discussions about the role of the Justice for Subpostmasters Alliance
(‘JFSA”). My strong sense at that time was that POL’s overriding strategic
priority, reinforced by the shareholder, was to improve its financial sustainability
in order to reduce its reliance on government funding. Indeed, that was the
whole purpose of the newly created role (Sales Director) for which I was
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recruited. Everything appeared to be focused towards that singular financial
aim.
36.1 also do not recall receiving any briefings on Horizon, the prosecution of
Postmasters, or the GLO at the time of my appointment to the SEG in 2018.
Had these issues been part of the general discourse in the business at the time,
I would no doubt have asked for a briefing, but in my part of the business at
least - the commercial function - they were not.
37.POL’s strategic focus changed significantly when Nick Read joined as CEO in
September 2019. He quickly secured a settlement with the GLO claimants, and
he advocated for an overarching strategy of reorientation towards Postmasters.
Given my role at the time, Nick was clear that he wanted me to focus on
developing commercial propositions and building revenue for Postmasters.
Nick's shift in strategy noticeably increased the level of dialogue at POL around
the issues of Horizon, the prosecution of Postmasters, the GLO, and how to
continuously improve day-to-day interactions with Postmasters. Around this
time I recall that the SEG would receive updates on Fraser LJ’s judgments, the
Board’s decision to ask Fraser LJ to recuse himself, and the settlement process
with the GLO claimants. However, the Board was ultimately making the key
decisions, and I was not a Board attendee at that point in time.
DCEO AND CEO RESPONSIBILITIES
38.1 have been asked to set out my role and responsibilities as DCEO, as
compared with the role and responsibilities of the CEO.
DCEO’s Accountabilities
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39.In July 2023 when I was appointed as DCEO, I was assigned the following three
broad accountabilities:
a) continue to run POL’s commercial function, which is responsible for
product and proposition oversight and development, product
manufacturer relationships, and product strategies;
Rod
create a culture programme to amalgamate all aspects of POL’s cultural
improvements and objectives into one place. This was called the “Ethos
programme” and it aimed to coordinate cultural change from the top
downwards. I was largely assigned this task by Nick Read because
there was no Chief People Officer (CPO) in post at the time, and after
only around three months, Karen McEwan was appointed to the CPO
role and took over responsibility for Ethos and colleague-related cultural
initiatives; and
c) chair the SPMP (i.e. the steering committee overseeing the build of
NBIT, the replacement to Horizon).
40. Nick also asked me to chair the Risk & Compliance Committee, the executive-
level risk oversight group. However, I took this on for less than two months
(from 12 September 2023 to 10 November 2023) as Nick and I subsequently
agreed that it was more appropriate for this committee to be chaired by the
General Counsel, Ben Foat, who had accountability for a number of the
assurance and compliance functions at the time.
41.As explained at paragraph 19 above, on 8 January 2024 I was assigned the
additional accountability of line managing the GCRO. The GCRO’s
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responsibilities include Postmaster engagement, Postmaster contracting,
strategic partner engagement, network strategy, Postmaster remuneration,
retail back office operations, the branch field support team, the supply chain,
marketing, digital, and customer contact centres. From 15 July 2024, with my
appointment as Acting CEO, the GCRO reported directly into the Interim Chief
Operating Officer until his departure on 2 August 2024.
CEO's Accountabilities
42.In contrast, the CEO has the following accountabilities:
a) the Technology function under the Chief Transformation Officer, which
covers Business as Usual (BAU) technology (including the Horizon
system, any other technology in branches or the central business, and
the Horizon replacement programme, NBIT);
b) the Finance function under the Chief Financial Officer, which also
includes internal audit, change management (other than the NBIT
programme), and business strategy;
c) the Communications function led by the Interim Group Corporate
Affairs, Communications and Brand Director, which covers internal
communications, Postmaster network communications, public affairs
(including dealings with the Government and other bodies) and public
relations;
d) the Inquiry Team;
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the Remediation Unit, which deals with compensation for Postmasters
arising from the Horizon scandal;
f) the People team as led by the Chief People Officer; and
the Legal function led by the General Counsel, which includes legal,
2
compliance, assurance, the company secretarial function, responses to
Freedom of Information Act requests, and the investigations unit.
RELATIONSHIP WITH NICK READ
43.1 have been asked to describe my working relationship with Nick Read.
44.1 have always had a good working relationship with Nick. As my line manager
he has been engaged and proactive. Since he joined the business in 2019, and
until I took over as Acting CEO, we spoke informally on more or less a daily
basis, and also on a more formal basis in structured monthly 1:1 meetings. I
believe we have always been open and frank with each other, and I have
always felt comfortable expressing my opinions transparently and, at times,
bluntly to Nick.
45. Nick has consistently held two meetings with his direct reports each week; one
informal meeting to discuss current priorities, and one formal SEG meeting to
discuss business-wide topics and scrutinise proposals that need to go onto the
Board. Nick has generally encouraged open debate and discussion at these
meetings. However, Nick’s clear preference as I saw it was to manage his direct
reports on the SEG largely bilaterally, as opposed to asking the SEG to lead
the business as a collective team. In practice, this meant that he wanted each
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SEG member to focus primarily on their area of accountability rather than for
the SEG's members to run the business as a collective. I did not regard this as
a hugely significant issue overall, but I suspect it reduced the opportunities for
collaborative problem-solving outside of formal governance meetings and also
meant that the SEG was not presented as a joined-up team to the wider
business. I believe that, in turn, fostered a perception in the business that the
SEG was not aligned, which was a theme that regularly materialised in
colleague engagement surveys. I spoke to Nick about this on occasion, but I
never felt that he saw it as a priority issue that needed to be addressed.
46.As mentioned above at paragraph 37, in my view since joining POL Nick has
been committed to changing the culture of the organisation and re-orientating
the general strategy to increase the focus on Postmasters as the heart of POL's
business and as the face of its brand. During his tenure, Nick has met regularly
with Postmasters at conferences, events, and branch visits. Through weekly
engagement sessions, he has maintained communications about business
performance and current events of topical relevance, which have been
accessible to all colleagues across POL. Overall, I believe that Nick has acted
with integrity as CEO, and he has certainly endeavoured to act in the best
interests of the business and its employees.
47. It is my view, however, that Nick has not consistently recruited executives of
sufficient quality, and this has in part led to an unhelpfully high level of turnover
at executive level, which I comment on in paragraph 84 below. I also think that
he has been highly reluctant to address performance issues amongst the
executive group as they have arisen. My sense is that he finds it very difficult
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to have tough conversations with colleagues and to properly hold them to
account for the delivery of their objectives. At times this has affected the
business's ability to make real progress, especially when various executives
have proved not to be up to the task of driving change and improvement in their
parts of the business. For example, over the last few years there has been an
extremely high turnover of Chief People Officers, each of whom has wanted to
reset the HR strategy on their own terms. I do not think this has been helpful in
terms of engendering a continuous and consistent approach to cultural change,
albeit that cultural change is not just about colleague behaviour, and in any
event, is all ultimately the accountability of the CEO.
48. The broader context to this is the significant and continuing scrutiny that POL
has received as a result of the high-profile media coverage of Horizon and other
issues, which I consider has had a particular impact on Nick. His concerns with
the media were all the more understandable when numerous press reports and
enquiries began to relate to him personally. I noticed that he was becoming
increasingly distracted and he was finding decision-making difficult and
stressful. I believe that this was noticed by the Board and was in part what
informed their decision to appoint me as Acting CEO in July 2024, to give Nick
time to focus on preparing for the Inquiry.
CORPORATE GOVERNANCE
49.I have been asked to set out my reflections as to the adequacy and effectiveness
of POL’s current corporate governance arrangements.
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50. To provide context to my answer to this question, I first set out, at a high level,
POL’s corporate governance structure, before addressing my reflections on the
adequacy and effectiveness of those arrangements.
Corporate governance structure
51.In very broad terms, POL's key strategic decision-making is carried out by its
Board or the SEG.
52.For context, the POL Board comprises its statutory directors, which include two
executive directors (the CEO and CFO), as well as the Chair and other Non-
Executive Directors ("NEDs"). I set out the current members of the Board at
paragraph 123 below.
53. The SEG, on the other hand, comprises the most senior members of POL's
leadership team under the authority of the CEO. The purpose of the SEG is to
assist the CEO in the performance of his or her duties within the bounds of the
authority as delegated to him or her by POL's Board. The SEG is accountable
to the Board for the day-to-day operations of POL. As a decision-making body,
the SEG’s authority is subject to the powers and duties of the Board, as set out
in POL's Articles of Association.
54.POL's sole shareholder is the UK Government.
Adequacy and effectiveness of POL's corporate governance
55.In October 2023 the POL Board commissioned Grant Thornton to carry out a
governance review. Grant Thornton produced a final report dated 25 June 2024
entitled "Post Office Limited: Governance review — Final" (POL00446477). My
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understanding is that the overall themes and conclusions in the final report are
largely accepted by the Board as an accurate representation of the key issues
and challenges that POL is facing.
56.Upon reading the Grant Thornton report I observed the following themes that
particularly resonated with my own views about POL’s corporate governance:
a) the lack of a unifying strategy and purpose between POL and its
shareholder (as well as conflict around the role of the shareholder
versus the Board);
b) leadership capacity at the Board and executive level; and
c) issues with decision-making fora at “enterprise” level (i.e. business-
wide decision-making beneath executive level) and enabling clear
accountability.
57.1 set out my own thoughts on the adequacy and effectiveness of the corporate
governance structure in respect of these three key themes below.
Purpose and strategy: shareholder vs. the Board
58.POL lacks a unifying purpose and group-wide strategy. In late 2019 to early
2020, with the assistance of McKinsey & Company, a review was carried out to
reset POL’s direction. The review put forward a wide-ranging set of
recommendations for POL, including proposals to identify areas for revenue
growth and cost reduction. Some of the initiatives were implemented, such as
selling the telecoms and broadband business and introducing new carriers into
the network, such as DPD and Evri, across a range of branches. However,
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some of the other recommendations, such as significant cost reduction, failed
to be realised, either for reasons of funding capacity or because, shortly after
the findings were published, the business was consumed by the impact of the
Covid pandemic. Like all high street businesses during the pandemic, POL was
utterly focused on the day-to-day operational management of the business (i.e.
logistics, safety etc.). The pandemic also changed the commercial position for
many of the markets in which POL competed.
59. Since this strategy reset failed to be fully implemented, POL has been lacking
a clear long-term strategy. This has created challenges which have been
exacerbated by the fact that the business and the shareholder have never
approached business strategy and policy requirements in a singular joined-up
way, and yet ultimately those are two parts of the same whole. My view is that
there needs to be one strategic vision for the business at any given time,
incorporating POL's policy obligations, which is jointly crafted and owned by
both the Board and DBT, and supported by HM Treasury.
60. By way of illustration, and during the writing of this witness statement, I have
been informed that the Strategic Review currently underway and being led by
a highly credible strategy consultancy, Teneo, will then be subject to an
independent review by DBT. And in order to undertake that independent
review, DBT will procure another strategy consultancy. As well as being a poor
use of public money in my view, it also demonstrates a lack of collaboration
between the shareholder and POL on the future direction of the business.
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61. The wider context is that POL has needed to rely on public resources for much
longer than originally envisaged. Perhaps in part because of this, the
relationship between POL and its shareholder often feels very transactional,
with the shareholder applying its policy requirements and expecting the Board
to govern according to those policy requirements without discussing their
strategic feasibility.
62. These policy requirements include the statutory obligation for POL to have a
network of at least 11,500 branches and to deliver a number of core services
to the general public. These include processing social benefit payments, tax
credit payments, national identity and licensing scheme applications, universal
payment facilities for public utility services, postal services, and universal
access to basic cash and banking facilities, especially for rural customers and
those on social benefits. This essentially requires POL to deliver a social
purpose to communities across the UK by facilitating the delivery of these
services. However, POL is also required to compete commercially in an
increasingly challenging and competitive high street environrent. This creates a
disconnect. My view is that POL’s strategic direction will remain challenging for
as long as it continues to be run as an ‘arm’s-length’ body — i.e. where it is neither
a pure public sector body with a social purpose nor purely a commercial
enterprise competing in the private sector, which happens to be publicly owned.
These two aims are not easily reconciled
63.1 have not detected any appetite from the shareholder to change the policy
requirements (which is entirely their right), but I do not think there has been a
proper and comprehensive debate between the shareholder and the business
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(and other interested stakeholders) about the implications of those
requirements on the ability of POL to compete successfully in private markets.
In my opinion, this is urgently required in order to achieve an alignment of views
across POL, its shareholder, and its wider stakeholders about the
organisation's key priorities and role in UK society.
64.1 am also aware that there has been an ongoing dialogue between groups such
as the National Federation of Sub Postmasters (‘NFSP”) and Government
ministers about the oversight of POL and its Board. The NFSP is advocating for
more Postmaster involvement in oversight, which may well be a positive
development, albeit such oversight would also need to unite the disconnect
between the social and commercial aims of the business.
65. However, a new Strategic Review is currently being undertaken under the
sponsorship of the Interim Chair, Nigel Railton. In my view this is a very positive
development that should provide the business with a clear opportunity to set
out a strategy for the future, assuming it is also embraced and supported by
the Government.
Leadership capacity at the Board and executive level
66. There are some issues with leadership capacity at the Board and executive
level. In particular, there has been a lack of focus on talent management,
retention, and succession planning. I think that this is in part due to the
extremely high turnover of Chief People Officers, and a lack of drive from the
CEO in relation to these particular issues. For example, the succession
planning in respect of my departure was much too slow, despite a year and a
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half of notice, and only really progressed with the arrival of Nigel Railton who
stressed the urgent need for a new appointment. Having said that, I think the
current Chief People Officer, Karen McEwan, is very capable and has exhibited
a real commitment and determination to bring about positive change to the
People function and the support it provides to the wider business.
67.The appointment of Postmasters onto the Board in June 2021 has been a
critically important step in terms of improving POL’s leadership focus and
bringing Postmasters closer to the centre of governance. As set out in more
detail at paragraph 130 below, my view is that POL should consider appointing
more Postmaster Board members.
68.There have also been recent improvements in relation to the Board sub-
committees. Although I have only attended the Remuneration Committee
(‘Board Remco’) once following my appointment as Acting CEO, I believe
there have been improvements to this committee, as a result of Amanda
Burton’s appointment as a NED in April 2023 and her review of Remco
processes.
69.The Board has also introduced a new sub-committee, the Investment
Committee, which scrutinises and oversees the business's major spending
activities. My view is that this is working well and establishes critical oversight
as to the way that money is spent on significant change programmes in POL.
Plans to update the executive sub-committee structure as a whole are also
under consideration.
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70.Most recently, Nigel Railton has had a very positive impact on the business
during his short time as Interim Chair. He is hugely passionate about enhancing
the business for Postmasters, ensuring that POL has, and is able to attract, the
right talent at the top level, and is sufficiently agile to allow for further
improvements and decisions to be made at pace. My view is that he is a real
asset to the future of the organisation and I would strongly encourage the
shareholder to retain him in his role beyond the interim period of his current
appointment.
Decision-making fora and accountability
71.1 believe that decision-making fora beneath executive level either lack the
assigned accountability for, or the appetite for ownership of, issues in the
business. The result of this is that too many operational decisions end up being
made by the SEG or at Board level. Those of us at leadership level have
discussed the desire to tackle this over recent months, but we have not yet had
the capacity to do so. For example, the Chair of the ARC (Simon Jeffreys) has
been advocating for the need to enhance capability below the SEG in areas of
risk management to encourage a more joined-up view of enterprise-wide risks.
In response, the business is currently in the process of appointing a Risk and
Compliance Director (who will report into the Interim CFO). For the first time,
this will unite the day-to-day oversight of risk, assurance, and compliance under
one role. I think that will be a valuable enhancement to governance.
72.In addition, in my view the quality of the papers provided to the SEG and the
Board by the business has been highly variable. For example, some have been
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far too lengthy and not clear enough in terms of recommendations. The burden
for reading and absorbing detail placed on the SEG and the Board needs to be
addressed by better report writing. In my experience, long board papers are
much easier to write than short concise ones and therefore further and
continuous training is required on this.
GOVERNMENT OVERSIGHT
73.1 have been asked to set out my reflections as to the adequacy and effectiveness
of the current oversight of POL by DBT and UK Government Investments
(‘UKGP’)) including in particular in relation to:
a) knowledge of Horizon issues,
b) the mechanisms in place toreview POL’s performance; and
c) POL’s compliance with its ethical and legal obligations.
DBT and UKGI Oversight
74. Whilst POL is run as an ‘arm's-length’ body that makes decisions independently
of the shareholder, it works closely with individuals at DBT and UKGI. At a high
level, DBT sets the policy agenda for POL, whilst UKGI has its own
representative on the POL Board who manages the day-to-day relationship
between POL and the shareholder.
75.Notwithstanding the challenges that the structural relationship with the
shareholder poses (as addressed at paragraphs 59 to 63 above), POL has a
reasonable working relationship with personnel from both UKGI and DBT.
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UKGI's representative on the Board, Lorna Gratton, and her team attend a bi-
weekly meeting with POL’s CEO and DCEO to discuss topics of current
importance to POL. Whilst these meetings are relatively informal (and are not
minuted to my knowledge), they are a useful way to maintain a process of
information sharing.
76.More formally, DBT writes to the Chair of the Board annually to set out its
priorities for POL for the coming year. POL reports on the progress made in
terms of each of these priorities at Quarterly Shareholder Meetings, which are
attended in person by members of the SEG, other POL colleagues depending
on what issues are priorities for the business at that time, DBT, and UKGI.
Whilst the scope of the quarterly meeting agendas tends to vary, the meetings
always include discussions on the current financial status of the business, cost
management, and progress regarding the development of NBIT.
77.My experience from attending these meetings over the last year is that the
individuals representing the various parties are keen to engage in open and
frank discussions. I have found Carl Creswell, Director of Post Office Policy and
Business Engagement at DBT, to be well informed and well intentioned. I also
think that Lorna Gratton of UKGI has been an excellent shareholder
representative on the POL Board. She has effectively managed the delicate
balance between shareholder oversight, the (sometimes unaligned) interests
of the DBT and HM Treasury, the relationship with the POL executive team, as
well as ensuring she satisfies her fiduciary responsibilities as a POL Board
member. I have found her to be skilful at raising appropriate and, where
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necessary, firm challenges in Board discussions, whilst also being a supportive
colleague.
DBT and UKGI’s knowledge of Horizon issues
78.Given the accountabilities I held until very recently as DCEO (as set out at
paragraphs 39 to 41 above), I have not had any direct communications with
DBT or UKGI regarding issues with Horizon. Because of this, it is difficult for
me to comment on the depth of DBT and UKGI's knowledge of such issues.
However, from attending weekly and quarterly meetings with DBT and UKGI in
my role as DCEO and Acting CEO, I know that they are closely involved with
reviewing NBIT, the programme which is being developed to replace Horizon
(in part, I think because of the growing costs associated with this project). For
example, the shareholder has asked for independent assurance reviews on the
NBIT project to be carried out by two consultancies, Public Digital and IPA. I
understand that the shareholder is also in the process of procuring longer term
independent assurance support.
Mechanisms in place to review POL’s performance
79.In terms of the mechanisms in place for UKGI/DBT to review POL’s
performance, the Quarterly Shareholder Meetings have provided opportunities
to discuss not only POL’s financials, but also POL’s progress in terms of culture.
I understand that there are also regular interactions between the POL legal
team, the POL strategy team, and DBT.
POL’s compliance with its ethical and legal obligations
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80.1 cannot comment on how the shareholder oversees POL’s compliance with its
ethical and legal obligations because I am not privy to the shareholder's
approach to this issue.
CULTURE AT THE SEG LEVEL
81.1 have been asked to describe the culture of POL at the SEG level and to set out
my reflections as to the ways in which the culture has or has not changed
following the findings of Fraser LJ or resulting from evidence arising inthe Inquiry.
The make-up of the SEG
82. Allowing for Nick Read's current absence from the day-to-day running of the
business, the SEG currently consists of the following members (in addition to
me):
a) Neil Brocklehurst, who joined about a month ago as Interim Chief
Operating Officer, and is responsible for all Postmaster engagement
and processes, retail operations, central operations, network strategy,
Postmaster remuneration, supply chain, customer experience, digital,
marketing, and all commercial products, propositions, and related
partner relationships;
b) Chris Brocklesby, who joined as Chief Transformation Officer in the
summer of 2023, and is responsible for all business as usual (BAU)
technology including Horizon, and technology transformation including
the Horizon replacement programme, NBIT. Chris will be leaving POL
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when his contract expires in September 2024 and will be replaced on
an interim basis by Andy Nice;
c) Karen McEwan, who joined in the summer of 2023 as Chief People
Officer and is responsible for all HR processes. Karen is also the line
manager for the Communications function under the Interim Group
Corporate Affairs, Communications and Brand Director (although it is
intended that this Communications role will be a direct report of the
(Acting) CEO in future); and
d) Preetha McCann, who joined about a month ago as Interim Chief
Financial Officer, and is responsible for finance, audit, strategy, health
and safety, and change management.
83. The SEG also consists of the following standing attendees:
a) Sarah Gray, who has several years of experience working at POL and
currently holds the position of Interim General Counsel — BAU Legal.
Sarah is responsible for BAU Legal, the Freedom of Information Act
team, the investigations team, compliance, risk, and assurance;
b) John Dillon, who joined about a month ago as Interim General Counsel
- Inquiry and Remediation and is responsible for the Inquiry team and
Remediation Unit;
c) Charlotte Cool, who joined earlier this year as Interim Group Corporate
Affairs, Communications and Brand Director and is responsible for
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internal and external communications, public relations, and public
affairs; and
d) Chrysanthy Pispinis, who has spent several years at POL and currently
holds the position of Chief of Staff, through which she provides wide-
ranging support to the CEO across his or her responsibilities.
84. There has been an extraordinary level of turnover in executives at POL over
the last few years. Since I joined the SEG in 2018, I believe there have been
four Chief Information Officers/Chief Transformation Officers, three Chief
Financial Officers, six Chief Operating Officers, three General Counsels, six
Chief People Officers, and five heads of the retail function. That level of change
is not something I have experienced in my career previously. Frankly, it has not
helped to ensure stable leadership of the business.
The SEG’s culture
85. Despite the high level of executive turnover in recent years, the SEG’s culture
has been fairly consistent and is similar to my experience on other executive
committees before I joined POL. Having said that, Nick Read’s management
style, as noted at paragraph 45 above, has been largely to manage vertically
down functional reporting lines, as opposed to across the SEG as a collective
team. This has meant that individuals have predominantly focused on issues
within their own accountabilities and expertise. This ‘remit-focussed’ approach
is more pronounced at POL than I have experienced in other businesses.
Further, and possibly as a result, the level of contribution from members during
SEG meetings has been varied, with some members proving hesitant to
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contribute to discussions on topics outside of their immediate remit. Nick has
told me on several occasions over the years that he has encouraged executives
to increase their contributions to discussions at the SEG, but I do not think this
has made a big difference in many cases. My impression is that some members
have held back in SEG discussions due to a lack of relevant experience, rather
than a general reluctance to put forward their views. However, I have not been
aware of SEG members feeling fearful of speaking up or challenging
colleagues. In addition, the size of the SEG was reduced in January 2024,
which has increased the level of collective debate and has improved the quality
of discussion around key issues.
86.In my experience, individual SEG members have generally had a good line of
communication with the Board and have not been afraid to escalate issues to
Board level.
87.Perhaps unsurprisingly, and particularly given the context of the Inquiry,
executives have become more cautious - maybe even fearful - in their approach
to decision-making over the last year or two. The business has been constantly
‘fire-fighting’ in recent months in light of the attention to which POL has been
subject following the ITV drama, the DBT Select Committee appearances
earlier this year, and the Inquiry itself, all of which have had significant
operational impacts. Latterly, the atmosphere at the SEG has been akin to that
of a crisis management body where focus has been even more tactical than
usual, and careful strategising has been difficult. Notwithstanding this, my view
is that the current SEG has managed this challenging environment well.
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88.In addition, and as I have explained above at paragraph 71, there has also
been an increasing tendency for management to escalate tactical issues up to
the SEG, which has considerably increased the size of the SEG’s agendas and
reading packs. This has reduced the SEG’s capability to concentrate on
strategic and major operational matters. I am optimistic that the new Interim
Chair's Strategic Review will assist with improving delegation and the lines of
reporting within POL, in order to relieve some of the pressure on the SEG and
allow it to focus on key decision-making.
89. Overall, my view is that the SEG is a well-intentioned group that is trying hard
to address the issues of the past effectively whilst simultaneously managing
the day-to-day of a complex business, in the context of considerable pressure
and public scrutiny.
CULTURE OF POL AS AN ORGANISATION
90.1 have been asked to describe the culture of POL as an organisation, and to
summarise my understanding of the actions POL has taken to change its
culture following the findings of Fraser LJ or resulting from evidence arising in
the Inquiry, and how effective these changes have been.
91.As I have explained at paragraph 35 above, when I joined POL in 2016 the
business was predominantly focused on achieving financial self-sustainability
and making POL more commercially viable. The culture notably shifted in
September 2019 when Nick Read joined as CEO, and in response to the
judgments of Fraser LJ. Nick led significant efforts to reorientate the focus of
the organisation towards its Postmasters, advocated for increased scrutiny
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across Postmasters’ processes and requirements, and ensured that managers
and executives have more direct contact with the Postmaster network.
Actions taken by POL to address cultural issues
92.1 set out below some of the key examples of the actions that POL has taken to
address Fraser LJ’s findings:
a) The Retail and Technology teams set up comprehensive programmes
of work to address the findings of Fraser LJ’s Common Issues and
Horizon Issues Judgments, including the necessary changes to
Postmaster processes and Horizon. Their progress has been closely
tracked by the IDG (as mentioned above at paragraph 26).
b) Postmasters have become much more involved in POL’s central
activities. In addition to two Postmasters joining the Board, a serving
Postmaster based in Norfolk, Mark Eldridge, has been recruited to take
on a high-profile role within the Retail function, ensuring that
Postmaster views are directly fed into day-to-day decision-making. At
my request since taking on the Acting CEO role, Mark is now inviting
Postmasters to address our weekly all-colleague meetings. I think Mark
has made a very positive impact on the culture of the Retail function.
The introduction of regional Postmaster engagement fora has also
been valuable.
c) The “Adopt an Area’ initiative, which has been in place since 2021, has
encouraged a large increase in executive and senior manager branch
visits, and has fostered greater connections between senior leadership
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and Postmasters. In the same year POL also launched a series of
videos and eLearning called “A Week in the Life of a Postmaster”, to
increase understanding of the Postmaster role across the business.
d) New channels have been created for Postmasters and POL colleagues
to raise complaints and resolve issues. For example, Postmasters and
colleagues can provide feedback via the Postmaster Survey, Colleague
Engagement Survey and Strategic Partner Survey, which are all carried
out on an annual basis. I address the recent results of these surveys at
paragraphs 203 to 218 below. POL’s whistleblowing processes have
also been enhanced (as I address in further detail at paragraphs 134 to
140 below).
e) POL has introduced mandatory training modules for all colleagues on
the Horizon scandal and how Postmasters were historically treated by
POL. Part of the purpose of this training is to ensure that the appalling
way in which POL previously behaved towards Postmasters is fully
understood by everyone in the business today. This has been one of
the most impactful training initiatives that I have seen during my career,
with many colleagues commenting on how deeply shaken they were by
the impact of POL’s actions. Colleagues have had a similar reaction
when watching some of the oral evidence at the Inquiry.
f) As mentioned at paragraph 39.b) above, in summer 2023 I created a
culture programme called ‘Ethos’ to coordinate all aspects of POL’s
cultural improvements and objectives. I recruited Tim Perkins to run the
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programme, with my oversight. The proposed approach of Ethos was
to clarify POL's distinguishing characteristics, our sentiments towards
each other (both those employed by POL and Postmasters), the
morality that drives our behaviours, and our guiding beliefs as an
organisation. Overall, it aimed to consolidate the work already
underway and accelerate the rebuilding of trust in POL. The goal was
to set the tone from the top downwards, with a view to agitating for
greater pace and to aggregate existing cultural initiatives, rather than
delivering particular projects itself. I took the Ethos programme to the
SEG and we then decided that POL should engage external support
from a cultural specialist firm to get advice on the approach and help us
to develop the programme. This was around the same time that Karen
McEwan joined POL as CPO. She took on accountability for cultural
initiatives, including Ethos, and Tim Perkins moved into her team.
In January 2024 POL engaged BusinessFourZero to support Ethos.
2
They strongly recommended that the work should initially focus entirely
on the development of a set of cultural ‘foundations’ built around the
purpose of the business, which in their view (with which I agreed) were
missing from the business. They also advised that it would be
impossible to build a cohesive cultural change programme without
these foundations being established first. As a result, we then engaged
BusinessFourZero to facilitate a series of workshops with the SEG to
develop a set of strategic drivers, a behavioural framework and a
business purpose. The strategic drivers (which were intended to ensure
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a sense of direction in the absence of a clear business-wide strategy)
included:
i. Creating capacity to reduce Postmaster costs and increase
Postmaster income (“Save to Invest”);
ii. Improving partnerships with Postmasters, strategic partners and
commercial partners (“Thriving Partnerships”);
iii. I Building digital capability (‘Fuelled by Digital”); and
iv. Rebuilding trust in and the confidence of the business (“Create
New Confidence”).
The behaviours were intended to act as a guide to everyone across the
business in terms of how to approach work, and included:
i. I Asking the questions that need to be asked and pushing for the
truth if it ever appears to be missing (“Be Curious”);
ii. Keeping momentum, pushing things to completion, and
encouraging others to do the same (“Move It Forward”);
iii. I Taking responsibility, running with it, and seeing it through (“Own
The Outcome”); and
iv. Supporting each other and embracing diversity to build an
inclusive culture (“Back Each Other’).
The rollout of the strategic drivers (which were renamed ‘business
outcomes’) and the behaviours was somewhat delayed by other
priorities in early 2024. However, these were subsequently launched to
the whole business in a series of events in June and July of this year.
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Going forward they will determine the approach to performance
management and evaluation. The business ‘purpose’ has not yet been
launched in the organisation in light of POL’s ongoing Strategic Review.
h) Anew ethics-driven code of business standards has also recently been
introduced to everyone in the business.
Effectiveness of the changes
93.In my view, as a result of the work of the last several years, the business today
has a very different culture compared with when I joined. The needs of
Postmasters are now of paramount importance to the purpose of the
organisation, and senior leaders engage much more regularly with Postmasters
on the front line through branch visits. My firm impression is that the vast
majority of POL employees are nothing but horrified by the details of the
Horizon scandal. Many colleagues have commented to me that they had no
idea Postmasters were being treated this way by the organisation for which
they worked, and are very alarmed that something of this nature could have
occurred during their time at POL. As such, I believe colleagues care deeply
about continuing to improve the culture and engagement with Postmasters, and
most of all ensuring that Postmasters are never again subjected to the terrible
wrongs of the past.
94.Notwithstanding the progress I consider we have made, there are
understandably still trust issues between Postmasters and POL staff and senior
leaders, including around Postmaster remuneration, which are addressed in
further detail below at paragraphs 100 to 101. In addition, it is my view that we
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have not invested sufficiently in the training and development of middle
management, partly because funding has been scarce, and partly because the
high turnover of Chief People Officers has meant a continually changing set of
HR priorities. My view is that such training should be prioritised in the future.
95. Overall, in my view, the culture has changed considerably, but changing an
organisational culture is a long-term process and from my previous experience,
not one for which there is a ‘quick fix’. There is certainly more to do and the
process will need to continue through determined leadership over the coming
months and years.
Trust between POL and Postmasters
96.1 have been asked to set out whether the culture at POL supports the building
and maintaining of trust between POL and Postmasters, managers and
assistants.
97.1 think that in general terms, the levels of trust between POL and Postmasters
and managers and assistants have improved over the last five years.
98.1 do not believe that there is a culture at POL today of obfuscation or withholding
information from Postmasters or their teams. Weekly network-wide
communications now go out on current issues relevant to POL. We
communicate in a timely manner with Postmasters on matters of critical day-to-
day trading importance, such as new commercial deals, changes to
remuneration and so on. The leadership team regularly attends Postmaster
events, both regionally and nationally, at which unvarnished questions to POL
can be, and often are, asked in an open forum.
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99.Postmasters are now much more widely canvassed for their views on critical
matters. A case in point is the Future IT Working Group, which is a group of
Postmasters who are consulted two to three times a month on the development
of NBIT and its user interface.
100.Where I think there is almost certainly still a clear trust issue is on the topic of
remuneration. Postmasters have seen their costs go up significantly in recent
years as inflation and the living wage have increased, whilst over the same
period of time income from running a Post Office franchise has not kept pace.
In my view, this is not for want of trying by POL. The majority of my career at
POL has been in the commercial function, where we have been focused on
securing commercial deals that ultimately enhance Postmaster remuneration.
To enforce Postmaster remuneration as a priority, I have always insisted that
those working in the commercial function have financial targets for products
based on gross revenue rather than POL’s overall return (i.e. after the payment
of Postmaster remuneration).
101.However, competitive challenges and a lack of funding for investment in central
cost-cutting measures have undoubtedly had a negative impact on Postmaster
income levels. I suspect that leads many Postmasters to conclude that POL
does not understand their challenges, which in turn likely leads to a diminution
in levels of trust. That is why a central tenet of the Strategic Review currently
underway is to look for opportunities to reduce costs in POL and improve
Postmaster income - both directly and through cost-saving automation
investment in branches.
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SEG’S RELATIONSHIP WITH POSTMASTERS
102.1 have been asked to summarise my experience of the SEG's relationship with
and approach towards Postmasters.
103.The SEG has always engaged with Postmasters as a group through
conferences and listening events, which have taken place several times a year
around the country. At these events, those of us on the SEG have given
presentations on the development of the business, and taken questions from
Postmasters in attendance. In addition, since earlier this year a number of us
on the SEG have met with representatives from the NFSP, the Voice of the
Postmaster group ("VOTP"), and the CWU (when the latter have been willing
to attend) for discussions on matters relevant to Postmasters and the operation
of their franchises.
104.By way of illustration, as an individual SEG member I have engaged regularly
with Postmasters in the following ways:
a) I have ‘adopted’ a number of different areas of the country and visited
individual Postmasters in those areas at least quarterly to discuss their
individual businesses and to take issues away for resolution;
b) I have visited Post Offices and Banking Hubs (which offer customers of
multiple retail banks in-person access to cash and other banking
services) for official opening ceremonies; and
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c) I have met with a number of Postmasters (both past and present) who
were victims of the Horizon scandal and their families in order to
understand their experiences.
SEG’S RELATIONSHIP WITH THE POL BOARD
105.1 have also been asked to summarise my experience of the SEG's relationship
with the POL Board.
106.1 have explained in broad terms the relationship between the POL Board and
the SEG from a corporate governance standpoint at paragraph 53 above.
107.In terms of how these bodies interact on a day-to-day basis, the SEG does not
meet with the Board as a collective body outside of occasional social events
and general leadership meetings. However, all SEG members meet with
individual NEDs from time to time, and attend the Board for specific agenda
items on a regular basis to discuss and to present on their topics of
accountability. Personally I have been attending full Board meetings regularly
since I became DCEO, and on a fairly regular basis prior to that. I engage with
the NEDs widely on my accountabilities during those meetings.
108.1 have found the vast majority of NEDs to be curious, interested in
understanding the business better and, more recently, very focused on the
needs of Postmasters. In my view, the Board's interest in Postmasters has
increased significantly since the Postmaster NEDs joined the Board, and still
further more recently as the Inquiry has progressed.
SEG’S RELATIONSHIPS WITH EXTERNAL STAKEHOLDERS
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109.1 have also been asked to summarise my understanding and experience of the
SEG's relationship with key relevant external stakeholders, such as the NFSP,
CWU, Fujitsu, UKGI, and the DBT.
110.The SEG does not have a collective relationship with the NFSP, the CWU,
Fujitsu, UKGI or DBT. However, each of the SEG's members may interact with
these stakeholders as part of the running of POL's business, as appropriate
depending on their accountabilities. I make some observations by reference to
each of these stakeholders below.
The NFSP
111.The NFSP is the official representative body of Postmasters. It has a
contractual relationship with POL and also receives funding from POL to
discharge this role. Under this agreement, POL is subject to an obligation to
consult the NFSP on matters such as remuneration. Therefore, this relationship
is managed relatively formally through the Retail team under the leadership of
the Interim Chief Operating Officer. The NFSP also has reasonably regular
interactions with the CEO of POL.
112.1 think the NFSP is concerned about the impact of the relatively newly-formed
body, the VOTP, on its future membership levels, given the growth in numbers
of the VOTP. However, I have always found the leaders of both organisations
to be well-intentioned and highly committed to improving the position for
Postmasters. I have said to both organisations that, notwithstanding POL’s
contractual position with the NFSP, the growing dialogue between a
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combination of Postmaster representative groups and POL (and other
stakeholders) can only be positive for Postmasters.
The CWU
113.POL's relationship with the CWU is managed in two ways:
a) in the CWU's role as a representative body for Postmasters, the
relationship is managed in the same way as the NFSP relationship; and
b) in the CWU's role as a trade union for employees, the relationship is
managed by the People function under the leadership of the Chief
People Officer.
114As noted at paragraph 103 above, as of this year some members of the SEG,
including myself and Nick Read, have started to have joint quarterly meetings
with all the Postmaster representative groups (i.e. NFSP, VOTP, and the
CWNU). These have felt productive so far, albeit the dialogue must continue and
deepen.
Fujitsu
115.The Fujitsu relationship is managed exclusively by the Technology team under
the leadership of the Chief Transformation Officer. The POL CEO also meets
from time to time with the CEO of Fujitsu Europe to discuss matters related to
the Horizon contract and its tenure. After my appointment as Acting CEO, I also
met with the CEO of Fujitsu Europe on 18 July 2024.
UKGI and DBT
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116.1 have addressed the relationship with UKGI and DBT, and the interactions
between these two bodies and the SEG, from paragraphs 74 to 80 above.
117.In addition to the relationships addressed above, we also manage a number of
key relationships with major commercial partners such as Royal Mail Group,
Evri, DPD, MoneyGram, Western Union, and Bank of Ireland. All these
interactions and relationships have ultimately been overseen by me as the
owner of the commercial agenda in the business, with occasional meetings
involving the POL CEO.
COMPOSITION OF THE SEG AND THE POL BOARD
118.1 have been asked to provide my view as to the current composition of both the
SEG and the POL Board with regards to experience, expertise, and abilities. I
address that question with respect to each of the SEG and the POL Board in
turn below.
The SEG
119.As I noted at paragraph 84 above, there has been an undesirably high level of
change in membership of the SEG (and the GE before it) during my tenure.
This has been unhelpful in terms of leadership continuity.
120.Unfortunately, I also do not believe that enough of the SEG members during
that period have had the capability and experience to be able to operate
effectively at executive committee level in a business like the Post Office. In
particular, I do not consider that we have had sufficient capability in the Retail
function, and from February 2022 onwards I made it clear to Nick Read on
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several occasions my view that he had not recruited well and needed to make
a leadership change. My views related particularly to Martin Roberts, who held
the critically important role of GCRO until August 2024. This role involves
overseeing all Postmaster-related activity across the business. Martin was well-
intentioned and consistently Postmaster-orientated, and I would level no
criticism of him in that area. However, the scope of his role was very wide, with
extensive accountability for addressing issues across network strategy,
Postmaster remuneration strategy, and back office processes. This is a
complex portfolio and ultimately I did not think he had the capability to oversee
those issues in sufficient detail. In July 2024, Martin’s role was made redundant
as part of the wider SEG restructuring.
121.1n the Autumn of 2023, Karen McEwan (Chief People Officer) and I
recommended to Nick that we reduce the size of the GE and rename it the
SEG. There were three broad reasons for this recommendation:
a) to reduce the number of people in the room and therefore enable more
focused discussion and decision-making;
b) to remove some individuals who were not operating at the right level to
make cross-business executive decisions; and
c) to reduce the number of Nick’s direct reports to make his role more
manageable.
122.1 think those changes have improved the quality of SEG discussions over the
last six months. My view is that the recent additions resulting from the planning
for my departure have brought new and strong capability to the SEG.
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The POL Board
123.The Board currently consists of the following members:
a) Nigel Railton, who has been Interim Chair since May 2024 and has a
commercial background, having previously been CEO of Camelot
Group;
b) Nick Read, although he is not currently attending POL Board meetings
whilst he is preparing for Phase 7 of the Inquiry;
c) Saf Ismail, who joined as a NED in June 2021 and is an experienced
Postmaster;
d) Elliot Jacobs, who also joined as a NED in June 2021 and is an
experienced Postmaster. Elliot and Saf have been valuable additions
to the Board, as I explain in more detail below at paragraphs 128 to
130;
e) Brian Gaunt, who has been a NED since January 2022 and has a
background in logistics and supply chains. His term on the Board is not
being renewed. I cannot comment on his contribution to the Board as
in general, he has been notably quiet in all the Board meetings that I
have attended;
f) Simon Jeffreys, who has been a NED since March 2023 and is a
chartered accountant. In my view he is a ‘safe pair of hands’ and has
brought a level of additional structure to the ARC;
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g) Amanda Burton, who joined the Board in April 2023 and is a qualified
solicitor and an experienced NED. She actively and effectively
contributes to Board meetings;
h) Andrew Darfoor, currently the Senior Independent Director, who joined
the Board in June 2023. He has a background in financial services and
insurance and shows particular interest in commercial matters and cost
management; and
i) Lorna Gratton, who has been a NED since May 2023 and is the
shareholder representative from UKGI. She has a background in
consulting and government. She is very engaged with POL’s
executives, given that she meets frequently with different members of
the SEG, as well as others within the business.
124.The Board has generally benefitted from a reasonable breadth of skills and
experience, particularly in terms of its commercial experience across financial
services and logistics. The ARC, which is currently made up of Elliot Jacobs,
Simon Jeffreys, Lorna Gratton, and Andrew Darfoor, has also been chaired by
competent individuals with relevant experience.
125.In contrast, given the scale of business and technological transformation
underway at POL, my view is that the NEDs have lacked technology and
change management experience. The Board is also lacking governmental
experience, with the exception of the UKGI representative. In my view this has
been unhelpful, particularly given that POL has little direct access to HM
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Treasury, where all the key funding decisions for the business are ultimately
made.
126.More generally, my impression is that the Board has not spent enough time
understanding and investing in talent and succession planning and ensuring
the development of crucial capabilities - albeit I may not have been present for
some of these discussions. The topic of talent in the business has become
more prominent at Board level following the appointment of the new Chair.
BOARD REPRESENTATION AND EXPERTISE
127.1 have been asked to set out specifically my view on the desirability of:
a) Postmaster representation on the Board;
b) legally qualified Board and/or SEG members, and
c) Board and/or SEG members with IT experience.
Postmaster representation
128 My view is that the Postmaster representatives, Saf Ismail and Elliot Jacobs,
have brought positive change and valuable new perspectives to the Board. In
particular, they have brought their direct experience of running Post Office
branches to the centre of Board discussions. As a result, there is a much
greater focus at Board level on the tactical and operational issues that
Postmasters face when running a Post Office.
129At the same time, their role is not straightforward. Whilst they have clear
fiduciary responsibilities as directors of POL, they must also represent the
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views and perspectives of Postmasters. This creates the potential for a conflict
of interest at times, for example in discussions around remuneration of
Postmasters. However, I do not think that this has affected the value of their
contributions.
130.1 also think that there is a strong argument for increasing the breadth of
Postmaster representation on the Board. Saf and Elliot are both a particular
type of Postmaster - they are highly entrepreneurial, run multiple branches, and
have strong retail offerings operating around the Post Office franchise. The
experience of many Postmasters is quite different from that of the current Board
representatives, as many Postmasters run a single Post Office branch with
minimal retail offerings. A large part of the network is also run by retail partners
like WHSmith and Co-op. It is my view that an expansion of Postmaster Board
representation to include a variety of Postmaster experiences and the breadth
of the franchisee model would be valuable.
Legally-qualified Board and SEG members
131.In terms of legal experience on the Board and the SEG, Amanda Burton is a
qualified lawyer and sits on the Board, and the Interim General Counsel, Sarah
Gray, attends the SEG. Whilst my general view is that the Board has sufficient
access to legal advice, the General Counsel does not attend Board meetings.
Board and SEG members with IT experience
132.In terms of IT experience, I understand that some members of the Board, such
as Andrew Darfoor and Nigel Railton, have some experience of corporate IT
transformations. However, my strong view is that there needs to be more in-
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depth technology and change management experience on the Board, given the
scale of both activities in the business today and going forward. As to the SEG,
the Chief Transformation Officer is the only member of that body with specialist
technology experience. As noted at paragraph 82.b) above, the current Chief
Transformation Officer will be replaced in September 2024.
WHISTLEBLOWING POLICIES
Whistleblowing culture
133.1 have been asked whether I think the culture in POL actively encourages
whistleblowers to speak openly and honestly about their concerns.
134 Whilst clearly it was not always the case, I think that the culture in POL does now
actively encourage whistleblowers to speak openly and honestly about their
concerns. It is my view that POL’s internal whistleblowing policy, ‘Speak Up’is
working well, and I have not been aware of any concerns raised by employees
regarding whistleblowers not being taken seriously or hesitating to speak
transparently. Equally, given theirnature, I do not have close knowledge of each
and every instance when a whistleblower has raised a concern Nevertheless, the
knowledge I do have of certain ‘Speak Up’ reports has informed my view that
allegations are investigated thoroughly. I set out my further reflections on the
effectiveness of the ‘Speak Up’ processes below at paragraphs 139 to 140.
Whistleblowing complaints
135.1 have also been asked to confirm whether I am aware of anyone having ‘blown
the whistle’ within POL since the findings of Fraser LJ in a matter relevant to
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the issues being explored by the Inquiry. If so, I have been asked to summarise
the nature of the complaint(s) made and the response of the Board, the SEG,
and any individuals named in the complaint, insofar as I am able whilst
protecting the identity of the whistle-blower.
136 Before I became Acting CEO I was generally not informed about whistleblowing
investigations at POL. Such investigations are kept confidential and are
overseen by the Board’s ‘Speak Up’ champion, Amanda Burton. However, I
have previously acted as the investigating manager for a small number of
POL’s whistleblowing investigations.
137.1In my current role as Acting CEO I receive reports on current whistleblowing
investigations. I cannot go into further detail on such investigations due to the
risk of identifying particular individuals who have reported concerns in line with
POL's policies, and who therefore have a legitimate expectation of
confidentiality. This risk is particularly acute given the recency of those
investigations. However, my view is that the investigations currently in train do
not reveal any systemic issues that go to the heart of POL’s culture.
Adequacy of whistleblowing policies and procedures
138.1 have been asked to set out my reflections as to the adequacy and effectiveness
of POL’s current whistleblowing policies and procedures.
139.In my view POL has made significant strides in terms of improving its
whistleblowing ‘Speak Up’ policy and processes over the last few years. I now
consider POL’s whistleblowing policies and procedures to be clear and
effective, and reflective of wider good practice. The ‘Speak Up’ internal policy
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document is widely accessible via POL’s intranet and emphasises the
protections afforded to ‘Speak Up’ whistleblowers. 'Speak Up’ is regularly
reviewed and updated by the internal audit and assurance teams. I also believe
that work is supported by external advisors, albeit I do not have direct
experience of this, given my role. The ‘Speak Up’ processes have been widely
communicated to both Postmasters and POL employees, and my impression
is that ‘Speak Up’ is functioning well.
140As mentioned above, Amanda Burton acts as the Board’s ‘Speak Up’
champion. Amanda is committed to maintaining robust whistleblowing
processes and often raises questions about resourcing in the ‘Speak Up’ team
in order to ensure that its members can remain highly responsive. Although I
do not attend them, I believe that there are quarterly meetings between the
‘Speak Up’ team and Amanda in order to review the latest whistleblowing data,
implement changes to the ‘Speak Up’ policy as necessary, and escalate conflict
issues. POL also plans to request feedback on ‘Speak Up’ via its next round of
employee engagement surveys.
PRIVILEGE AND LEGAL ADVICE TO THE BOARD AND SEG
141.1 have been asked to set out the extent to which I consider that I understand
issues of legal professional privilege and the extent to which such information
may be shared with the Board and the Executive of a company. I have also been
asked whether I consider the provision of legal information to the POL Board and
the SEG (and the relevant mechanisms) to be sufficient and to set out any
concerns that may have in this respect.
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142.1 am not a lawyer and therefore I do not have in-depth expertise as to issues of
legal professional privilege. My impression from the evidence given at the
Inquiry is that legal advice privilege was used at times during the Horizon
scandal as a tool to withhold information from Postmasters and others.
However, as far as I am aware, legal professional privilege is not being misused
in the business today. I have not observed colleagues using privilege as a
means to withhold information inappropriately.
143.My general view is that both the Board and the SEG receive sufficient legal
advice in order to inform their decision-making. Risk notes drafted by the legal
team are frequently appended to SEG and Board proposals and included in
meeting packs. In regards to more complex topics, such as procurement-
related issues, the business sometimes engages external legal counsel to
attend Board meetings and to provide an independent legal perspective. I do
not have any specific concerns about the provision of legal information to the
Board and the SEG.
HORIZON’S REPLACEMENT SYSTEM
144.1 have been asked to summarise my understanding as to what extent (if any) the
lessons learned from the rollout of the Horizon system have been implemented
by POL in the development of its intended replacement IT system.I have also
been asked to set out my reflections on how effective these changes have been.
145.Given the roles I have held during my time at POL I have not had accountability
for Horizon up until very recently when I became Acting CEO. Therefore, my
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knowledge of this topic is not as comprehensive as that of some others in the
business.
146.The NBIT programme was set up in 2021 (I believe) under the leadership of
Zdravko Mladenov, who eventually became the Group Chief Digital and
Information Officer and reported into Nick Read. A steering committee chaired by
the CFO was also established to oversee NBIT’s development and
implementation. I joined this committee alongside other members of the SEG
147 In early 2023, Nick established the Retail Transformation Programme (“RTP”),
and an associated new steering committee. Whilst I was not a member of this
committee, my understanding is that the RTP was largely focused on preparing
the network for the rollout of the new technology, including reviewing the errors
made during the implementation of the original Horizon system, to avoid
repeating mistakes in the implementation of Horizon’s replacement. RTP’s
work included focusing on ensuring that branches would be ready to switch
between the old and new systems, and developing training and a deployment
strategy with input from Postmasters. In the summer of 2023 the RTP and NBIT
programmes merged in order to enhance integration and to drive efficiencies.
This took place in the context of the NBIT programme's increasing cost and the
extension of the targeted implementation date. Nevertheless, I think that the
work carried out by RTP indicates POL’s clear commitment to learning the
lessons of the past and ensuring that Postmasters are fully supported when the
Horizon replacement technology is eventually rolled out.
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148 As I note at paragraph 28, upon being appointed as DCEO I was made Chair
of the steering committee overseeing the NBIT programme. Around the same
time, Nick engaged a joint team from Accenture and KPMG to carry out an
independent review of the programme to determine whether a change of
strategy was needed. Nick also appointed Chris Brocklesby to take on the role
of Chief Transformation Officer. In the autumn of 2023 Accenture and KPMG
recommended continuing to build on what the NBIT team had delivered so far.
They also set out some additional recommendations, such as revalidating the
scope of the work, considering the engagement of a change transformation
delivery partner, and re-planning and re-costing the programme.
149.There are now initial releases of NBIT live at five counter positions across five
different Post Office branches (the first of which was rolled out in September
2022). These early releases have been implemented with a large amount of
training and support from members of the NBIT programme.
150.Building the programme is proving to be complicated and very costly. POL
currently estimates that NBIT will be fully implemented in four years’ time, as
long as it continues to receive sufficient funding from the Government. POL is
also currently exploring potential alternatives routes forward for NBIT as part of
the ongoing Strategic Review, which should be concluded during the autumn
of 2024.
151 For the time being Horizon remains in place across POL’s network.
GOVERNMENT INVOLVEMENT IN HORIZON’S REPLACEMENT
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152.1 have been asked to set out any concerns (if any) I have regarding the
Government's involvement in this process, including in respect of funding.
153.The forecast cost of the NBIT programme has increased significantly since it
was launched in 2021. My view is that this has been driven by the following
factors:
a) the quality of the forecasting, which has been impacted by optimism
bias;
b) the task of understanding the product processes in the architectural
infrastructure of Horizon, which has been harder than anticipated and
which has augmented the build schedule;
c) the fact that the extension of the build schedule has meant that the
Horizon contract with Fujitsu will need to be extended for longer than
anticipated; and
d) as the inadequacies of the Horizon system rollout have continued to
emerge, POL has realised the need for significantly more training and
support during the implementation stage of the rollout.
154As a result, the Government has understandably become increasingly
interested in the detail and the costings of the NBIT programme, and has raised
the need for more extensive independent assurance. The current proposal is
for the shareholder to directly procure such independent assurance, to ensure
that it is comfortable that public money is being used appropriately and
efficiently. As Acting CEO I am supportive of this approach, and I have
confirmed this verbally to officials in DBT. Increased shareholder engagement
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may also help with the overall planning of the NBIT programme as it may lead
to an additional degree of certainty in relation to the programme’s long-term
funding.
REDRESS AND COMPENSATION
My involvement
155.1 have been asked to summarise my involvement, if any, in the establishment,
delivery, and monitoring of the Horizon Shortfall Scheme, the Overturned
Convictions Scheme, and the Group Litigation Order Scheme. I have also been
asked to provide details of my input into any key decisions relating to these
redress schemes.
156.1 have not been directly involved in the establishment, delivery, or monitoring
of any of the redress schemes. These schemes were established by the
Remediation Unit which, until July 2024, reported into Nick Read as CEO via
the Chief People Officer, Karen McEwan. The Remediation Unit is overseen by
the Remediation Committee, a formal sub-committee of the Board which holds
delegated authority in respect of redress activity, including oversight of the
compensation schemes that POL administers, and which, until recently, was
chaired by Ben Tidswell, the Senior Independent Director who stepped down
from the Board in July 2024. During my time at POL I have had no involvement
with the Remediation Committee and have not attended any of its meetings. I
am aware that redress decisions are also overseen by an independent board
of parliamentarians and academics, the Horizon Compensation Advisory
Board, albeit I have not been involved with this panel either.
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157.The Remediation Unit updates the SEG on a monthly basis, setting out
progress regarding each of the redress schemes and numbers of claims. The
view that I have formed from these updates is that good progress has been
made across all of the redress schemes. Nevertheless, redress ultimately
needs to be quicker and POL needs to reach a wider number of eligible
Postmasters, albeit increasing such engagement is limited by the issues
identified at paragraphs 163 to 164 below.
158.The SEG has debated issues relating to the Remediation Unit. For example,
the SEG has over recent months discussed the fact that certain members of
the Remediation Unit team were previously in Postmaster-facing roles at the
time of the Horizon scandal. I understand that when the Remediation Unit was
established, it was thought that the most expedient way to process claims
would be to use such individuals, who had knowledge of Horizon data.
However, concerns about this approach have been raised by a wide range of
commentators, including the Horizon Compensation Advisory Board. Whilst, as
far as Iam aware, there has been no evidence of relevant individuals negatively
impacting the functioning of the redress schemes, the SEG and the Board felt
that it was important to address the issue. It has not been a straightforward
process, given various employment law complexities, but the People function
is currently dealing with this matter.
My level of oversight
159.1 have been asked to explain what oversight I had (if any) for each of the redress
schemes and/or over the individuals responsible for coordinating each scheme.
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160.Consistent with my accountabilities as set out at paragraphs 39 to 41, I have
not been responsible for the establishment, delivery or monitoring of the
redress schemes, until I was appointed Acting CEO in July 2024. My
involvement in those schemes during my few weeks as Acting CEO has been
minimal. In addition, I have not been involved in decision-making related to
these schemes, which has been conducted by the Remediation Committee, of
which (as noted above at paragraph 156) I am not a member.
161.The redress schemes are run by the Remediation Director, Simon Recaldin,
who was a direct report of the CEO until 8 January 2024 and then, up until very
recently, a direct report of the Chief People Officer. From 15 July 2024, the
reporting line changed from the CPO into a newly appointed Interim General
Counsel - Inquiry & Remediation, John Dillon. John is reporting into me for my
seven weeks as Acting CEO. As noted above, as a member of the SEG I have
received monthly updates on the redress schemes, but overall my level of
oversight has been limited.
Engagement with Postmasters on redress
162.1 have been asked whether I think that POL has taken all reasonable steps to
engage with all Postmasters that may be eligible to apply to any of the redress
schemes. I have been asked to provide reasons for my answer and to set out
how I think Postmaster engagement could be improved, if applicable.
163.As far as I am aware, extensive efforts have been made to engage with
Postmasters who may be eligible to apply to the redress schemes. However, it
is clear that some eligible individuals are highly reluctant to have any contact
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with POL, given the appalling way that they were treated by the organisation in
the past. Indeed, in the restorative justice meetings that I have attended, many
Postmasters and their families have conveyed to me that they feel deeply
uncomfortable about the prospect of contacting POL, and that they would likely
find such contact emotionally triggering. This is entirely understandable and it
is my view that the level of Postmaster engagement simply must have been
affected by the fact that the schemes have been run out of POL, rather than
independently by the Government (with the exception of the GLO
Compensation Scheme) or a different third party.
164.Indeed, after the Horizon Shortfall Scheme was established, I believe that Nick
Read strongly recommended to the Government that POL should not be
involved in remediation. However, the Government regarded remediation as
POL’s issue to sort out and held firm that it should be run by the business rather
than elsewhere. I am also aware that the new Interim Chair, Nigel Railton, has
recently communicated to the Government that he believes POL should not be
running remediation activity, given that the fact of its doing so may be
discouraging eligible individuals from coming forward. It remains to be seen
whether the Government will change its stance on management of the
remediation process, in light of these concerns.
Effectiveness of redress schemes
165.1 have been asked to set out my reflections as to how effective each of the
redress schemes have been in respect of the following:
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a) Fully compensating individuals across all heads of loss that would be
available via other legal routes.
RJ
Fairly compensating individuals as a whole across the schemes (to put
them in the position they would have been in but for the losses suffered
as a result of the Horizon system).
c) Ensuring parity of compensation for applicants across each of the
redress schemes.
d) Establishing and utilising independent panels within each scheme to
resolve disputes.
e) Achieving fairness in respect of the different tax treatments for
individuals across each of the schemes.
f) Achieving fairness for those applicants who had been made bankrupt
due to losses suffered as a result of the Horizon system.
Supporting and encouraging applicants to obtain legal advice, including
2
whether adequate legal funding has been made available.
=
Ensuring that quantum of compensation is fair for all applicants,
irrespective of whether they are legally represented.
i) Keeping individuals informed about the process of the scheme(s) and
how their claim is progressing.
j) Making fair offers of compensation to individuals within a reasonable
timeframe.
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k) Making any agreed payments of compensation (including Fixed Sum
Award and interim payments) within a reasonable timeframe.
166.Given my limited involvement with the redress schemes, I do not feel able to
provide any valuable personal reflections on the various factors set out above.
THE TIMES ARTICLE OF 19 FEBRUARY 2024
167.1 have been asked to consider the Times article dated 19 February 2024
(RLIT0000201) and to set out in detail my understanding of the matters raised
in this article, including the relevant background, chronology, and actions of any
individuals involved.
168.0n 17 January 2024, the then Chair, Henry Staunton, emailed Nick Read in
relation to a request from the VOTP for a meeting. Henry attached to his email
a separate email exchange that he had had with Saf Ismail and Elliot Jacobs,
the Postmaster NEDs, the subject line of which was "Project Pineapple"
(POL00448653).
169.The exchange between Henry, Saf and Elliot included a summary note of a
very frank discussion on their perspectives about some aspects of the culture
at POL. It also contained comments in relation to the General Counsel at the
time, Ben Foat, and then Group Chief Retail Officer, Martin Roberts. The
exchange also referred to Richard Taylor, the Group Corporate Affairs,
Communications and Brand Director, who left POL in early 2024 after the media
had exposed a covert recording of him from a few years prior in which he
expressed his view that some of the victims of the Horizon scandal were not
actually innocent. The email exchange between Henry, Saf and Elliot
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suggested that the view expressed in that recording was a more general
opinion held across the business. However, it is certainly not my experience
that there is a widely held and expressed view at POL that some of the victims
of the scandal were guilty of criminal conduct.
170.It is clear that Henry did not intend to share the email exchange with Nick, and
I believe Nick had no prior knowledge of what was referred to as "Project
Pineapple". Nor did I or the rest of the executive team. I do not know whether
any or all the members of the Board had any knowledge of Project Pineapple.
171.Nick subsequently forwarded his email chain with Henry and its attachments
(POL00448651; POL00448652; and the "Project Pineapple" email chain:
POL00448653) to Martin Roberts, Ben Foat, myself and two others
(POL00448412). I do not know for certain, but I assume that he did not read
the attachment before he did so, and therefore shared the ‘Pineapple’ email
chain inadvertently. It immediately became clear that he should not have done
so, and that Ben Foat and Martin Roberts were understandably upset about its
contents and to hear the sentiments of some NEDs in this way.
172.1 am aware that Martin asked Saf and Elliot to apologise for their comments,
and I believe that they did indeed apologise to him. Martin subsequently asked
them to withdraw their comments in writing but I am not aware if Saf and Elliot
did so. I also believe that Saf and Elliott actually stood by those views.
173.1 note that the Times article referred to a “leaked memo”. Whilst the ‘Pineapple’
email was indeed leaked, as explained above, the contents of the article
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suggest that there is also another memo that the Times additionally quote from.
I do not believe I have seen that.
Whether Mr Jacobs and Mr Ismail were “ignored” and “seen as an annoyance”
174.1 have been asked to set out my reflections on the quoted statement of Mr
Jacobs that he and Mr Ismail were “ignored and seen [...] as an annoyance” by
other members of the POL Board.
175.1 do not believe that Saf Ismail and Elliot Jacobs were ignored or seen as an
annoyance by other members of the Board. Indeed, as I have stated at
paragraph 128 above, it is my view that they have made a very positive
difference to the nature of the dialogue at Board meetings. They are unafraid
to express their views firmly, raise issues to the Board, and express their
frustration when they believe that change is not moving fast enough.
176Whilst Saf and Elliot's firm and, at times, blunt communication style and
criticisms did sometimes rankle with some members of the executive team, I
personally did not think that undermined their value to the Board or the
business. Further, I have not heard any NED express the view that Saf and
Elliot were an “annoyance”. I also do not recognise a description of the culture
as “toxic”.
The “untouchables”
177.1 have been asked to comment on Mr Jacobs’ claim that “the 40 Post Office
investigators still employed by the company were nicknamed ‘the
untouchables’ by Nick Read”.
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178.1 have not heard Nick Read use the term “untouchables”.
179.1 think that there has been some confusion in the media about POL employees
who were employed at the time of the scandal who have continued to work for
the organisation. The average length of service in many teams at POL is long,
and there are still many people working for the business who were employed
at the time of the Horizon scandal. Of course, this does not mean that they were
personally involved with the wrongful prosecutions and awful treatment of
Postmasters. Nevertheless, I am aware that some commentators, including
legal representatives of victims of the Horizon scandal as well as other voices
in the media, are of the view that long-service POL employees should not be
working for the organisation due to their implied association with its past
behaviour. I do not agree with that on a generalised basis.
180.However, where POL is aware of past wrongdoing or obvious conflicts of
interest, it has taken action. POL is investigating a number of current
employees who may have been guilty of wrongdoing during the Horizon
scandal, such as those operating as investigators. As explained at paragraph
158 above, the People team is also addressing issues regarding personnel in
the Remediation Unit who were previously in Postmaster-facing roles, on a
case-by-case basis. This process is underway, and my view is that the “40 Post
Office investigators” quoted in the article is actually a reference to the
individuals described above in the Remediation Unit.
THE BBC ARTICLE OF 17 APRIL 2024 AND THE SKY NEWS ARTICLE OF 23
APRIL 2024
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181.1 have also been asked to consider the BBC article dated 17 April 2024
(RLIT0000248) and the Sky News article dated 23 April 2024 (RLIT0000249).
I have been asked to set out the following:
a) my understanding of the circumstances which led to the dismissal of
Jane Davies, including the relevant background, chronology and
actions of any individuals involved;
b) my reflections on the quoted statement of Ms Davies that “it was clear
that cultural change that needed to start with the senior leaders, was
simply not high on Nick Read’s agenda”; and
c) the incident which gave rise to the allegations made as part of the
whistleblowing process where this has not already been addressed in
my statement.
Jane Davies’ dismissal
182.1 was not directly involved with the circumstances that led to Jane Davies’
dismissal, with the exception that I was the executive point person on the
investigation (overseen by the NEDs) into her allegations against Nick Read.
My role as executive point person involved dealing with any issues that arose
during the investigation that could not be referred to Nick, given that he was the
subject of the allegations being investigated. For example, I was responsible
for liaison between POL and the DBT Select Committee when the committee
requested disclosure of documents relating to this issue from POL.
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183.Jane Davies joined the business in December 2022 as Chief People Officer. At
some point, I do not recall exactly when, Nick informed me that a number of
allegations had been made against Jane by members of the People team. I
was told that these allegations were being investigated. I was not aware of the
details of the allegations nor who had reported them. However, I do recall Nick
informing me of his view that, given that the allegations were against the CPO
and the clear need to demonstrate the right culture in the business, Jane could
not continue in her role.
184.Jane left POL around the end of June or the start of July 2023. I understand
that she raised a number of allegations against Nick around this time. This
triggered an investigation, which was run by an external barrister from the
autumn of 2023 to early 2024. I was interviewed by the barrister as part of the
evidence-gathering phase of the investigation, as were others. Once the
investigation was concluded, the Board asked me to assist with considering the
barristers recommendations so that ownership for them could be assigned,
which I subsequently did. The internal audit team have since been asked by
the ARC to provide assurance over the addressing of those recommendations.
The investigation became a subject of considerable interest at the DBT Select
Committee hearings in early 2024.
Jane Davies’ comments about cultural change
185.In terms of Jane Davies’ comment about Nick Read’s commitment to cultural
change, I think that she felt that Nick was not committed to achieving diversity
at SEG level, and that he allowed some members of the SEG to dominate
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discussions. I think that the point about a lack of commitment to diversity at
SEG level is arguably fair, given the individuals recruited to the SEG during
Nick's tenure. However, as I have explained at various points above, I do think
that Nick was committed to instigating cultural change more generally, by
making the organisation more Postmaster-centric, and to ensure that the
terrible wrongs of the past could not be repeated. Regarding the suggestion
that certain SEG members were allowed to dominate discussions, as
mentioned in detail at paragraph 85 above, the level of individual contributions
to discussions at SEG meetings has always varied considerably across the
group.
HENRY STAUNTON'S DISMISSAL
186.1 have been asked to set out in detail my understanding of the circumstances
which led to the dismissal of Henry Staunton on 27 January 2024, including the
relevant background, chronology, and actions of any individuals involved.
187.1 was not involved with Henry Staunton’s dismissal and therefore my
understanding is based on discussions with colleagues at the time, as opposed
to any direct engagement with Henry or DBT.
188 Henry joined the Board in December 2022. From an early stage he was vocal
about a range of matters. For example, he held the strong view that the Board’s
decision-making was too heavily shaped by legal and procurement advice. He
also believed that the Board was not spending enough time focusing on
developing the future of the business for the needs of Postmasters.
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189.1 understand that, at some point in late 2023, concerns were raised about
Henry's approach to appointing a new Senior Independent Director (“SID”) to
the Board.
190.1 understand that around the same time, concerns were also raised about his
alleged attitude towards female Board and SEG members, and his aggression
towards at least one male member of the executive team. I do not know the
details of these concerns but I believe that they were discussed amongst some
of the NEDs. However, if any investigation had been instigated (and I do not
know if it was), it had not concluded by the time Henry was dismissed. I
understand that Henry had not been made aware of these concerns about his
behaviour.
191.1 understand that in January 2024, Henry received a call from a journalist at
Sky News informing him that he was going to be sacked that afternoon. Later
the same day the Secretary of State called Henry to dismiss him. The Secretary
of State subsequently asserted in Parliament that Henry had been sacked
because of bullying allegations. In fact, and to the best of my knowledge, this
was not correct, given that, as stated above, no findings on the behavioural
concerns had been concluded at the point of Henry's dismissal. Indeed, I
understand that it was his approach to the appointment of the SID and possibly
other matters that led to his dismissal
192.1 have not had any contact with Henry since his dismissal.
193.For completeness I note that in a DBT Select Committee hearing Henry said
that he had been asked by Sarah Munby of DBT to slow down compensation
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for Postmasters. I was never aware of him reporting this to anyone at POL and,
as an executive team, we were never asked to slow down Postmaster
compensation.
ALISDAIR CAMERON'S RESIGNATION
194.1 have been asked to set out in detail my understanding of the circumstances
which led to the resignation of Alisdair Cameron on 25 June 2024, including the
relevant background, chronology, and actions of any individuals involved.
195 Alisdair Cameron (who was known at POL as ‘Al’ Cameron) was the Group
CFO. Al and I worked alongside each other from when I joined the SEG in 2018
until April 2023. Although we had very different working styles and disagreed
on things at times, overall we worked collaboratively.
196.My understanding is that in 2021 Nick Read had sought agreement from the
shareholder to remove Al from the organisation. However, I have not seen any
related documentation, and I do not know the specific reasons as to why Nick
may have sought such an agreement. I understand that the proposed exit
agreement was not agreed by the shareholder at that time, as would have been
required constitutionally. It seemed that Nick and Al's relationship was under
some strain thereafter.
197 Al did not return to POL after a holiday in April 2023. Since that time I have not
had any further contact or engagement with Al, or the negotiations regarding
his exit from POL, albeit I was aware that these were ongoing. I understand
that an agreement was reached with Al in June 2024, and his departure was
then announced to the organisation.
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THE TELEGRAPH ARTICLE OF 30 MARCH 2024
198.1 have been asked to consider The Telegraph article dated 30 March 2024
(RLIT0000257) and to set out in detail the reasons for my resignation from POL,
including the relevant background, chronology, and actions of any individuals
involved.
199.In early 2023 I spoke to Nick Read about my future career plans and I told him
that I intended to leave POL in early 2024. I raised this with him a year in
advance of my original proposed exit date, in order to allow him time to plan for
my succession. My decision to leave was a personal one and it was not related
to any issue in the business. After spending over 38 years working in the
corporate world, I wanted to pursue a different path and I told Nick that I was
not intending to seek another executive role after leaving POL. Moreover, when
I first joined POL I had not intended to stay as long as I have done. I have
enjoyed my roles and have been particularly inspired by the central role that
POL’s Postmasters play within communities in the UK. This was especially
noticeable during the Covid pandemic when the Post Office network played
such a critical part in maintaining access to key services for communities across
the country.
200.During my discussion with Nick in early 2023 we did not decide on an approach
to my departure in terms of succession planning, and whilst we occasionally
discussed it during 2023, we did not do so regularly, nor was my proposed
departure communicated to the wider business. Indeed, Nick specifically asked
me not to tell anyone as he thought that it might cause concern.
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201 Around the time that I became DCEO (in the summer of 2023), the then Chair,
Henry Staunton, asked if I would consider extending my departure date by 12
months to spring 2025 to ensure continuity, and also to potentially position
myself as Nick’s successor. I made it clear to Henry that I no longer wanted to
become the CEO. Indeed, I had told him that I had wanted to do the job in 2019
when I had applied for the role at the same time as Nick, but I was now in a
different stage of my life. However, I agreed to extend my departure date to late
summer of 2024.
202.POL was asked to submit various documents to the DBT Select Committee
hearing in early 2024. Some of these documents included references to Board
discussions about my departure from the business. As a result, I felt that there
was a real risk that the fact of my departure would be leaked and I wanted
colleagues and Postmasters to hear the news from POL directly rather than
reading about it in the media. Therefore, in March 2024 we decided to
announce my plans to exit the business. This prompted the Telegraph article
on 30 March 2024. As I said above, my decision to leave the business was
personal and was not prompted by anything related to POL or my colleagues.
POSTMASTER AND COLLEAGUE SURVEYS
203.1 have been asked to consider the following documents: POL00446680 (the
Headline Results document relating to POLs 2024 Engagement Survey);
POL00446704 (the Postmaster Survey Results slide pack), and POL00446681
(the Engagement Survey slide pack). In correspondence from the Inquiry to Baker
McKenzie dated 9 August 2024, I was also asked to considerPOL00446682 (the
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Postmaster Sentiment Survey, April 2024). I have been asked to set out the
following:
a) my reflections on the results of the surveys;
b) what (if any) changes have been implemented within POL as a result
of the information gained from the completion of these surveys; and
c) whether the results of these surveys have been shared with
Postmasters and/or POL employees. If so, I have been asked to
describe how and in what form the results were distributed.
Colleague engagement survey results: reflections
204.The colleague engagement survey was carried out in March 2024, at a time of
instability and turmoil at POL, given the recent broadcasting of the ITV drama
on the Horizon scandal and the extensive public scrutiny that followed. There
was also intense interest in POL’s current leadership following appearances by
Nick Read and others at the DBT Select Committee. At the time several
colleagues told me that they felt embarrassed to tell people outside of the office
that they worked for POL. Many colleagues were increasingly concerned for
their safety, in light of a rise in aggression towards individuals by members of
the public outside of POL buildings and on social media. Many of my colleagues
stopped wearing POL identification outside of POL buildings. Indeed, I
personally received a large volume of abusive and threatening emails from
people across the UK who wrongly assumed that I was personally responsible
for the Horizon scandal. Whilst this backdrop does not fully explain the results
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of the engagement survey, my view is that it must be read with an
understanding of the context at the time.
205.As a result, unfortunately it did not surprise me that a number of the key scores,
particularly those about overall engagement and whether people are proud to
work for POL, had fallen significantly. In addition, it was clear that senior leaders
are under considerable strain and stress, confidence in senior leaders is low,
internal communications are not working effectively, there is a lack of certainty
about long term strategy, and colleagues from diverse groups have a less
positive view of working for POL.
Colleague engagement survey results: post-survey actions
206 My view is that the Strategic Review will be critical in improving feedback across
the organisation. Establishing a refreshed strategy which centres around
Postmasters, creates opportunities for career development, and re-builds a
sense of pride in the Post Office brand, is key.
207 Every POL department has created an action plan to address the engagement
survey results. As to the parts of the business that I was responsible for up until
15 July 2024, these plans focus on the following key areas:
a) communicating spend and change priorities;
b) engaging with and supporting the Strategic Review;
c) continuing to build clear succession planning and_ personal
development plans and communicating these to individuals more
effectively;
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d) identifying processes that are causing frustration and building a clear
action plan to address them;
e) enhancing recognition for colleagues;
f) ensuring that everyone’s performance objectives fully reflect the
priorities of the business;
g) ensuring that the required behaviours are understood, lived and
breathed right across the business; and
h) engaging with the enhanced Equity, Diversity and Inclusion activity that
is being driven by the People function across the business.
208.Since becoming Acting CEO five weeks ago, given my short time in the role
and multiple responsibilities, I have not yet been involved in the wider colleague
survey action plans that are ‘CEO owned’.
Colleague engagement survey results: distribution
209.The results of the colleague engagement survey were shared within POL teams
across the organisation. They were also shared at a company-wide level at a
town hall meeting.
Postmaster Survey results: reflections
210As with the colleague engagement survey, the Postmaster survey was carried
out in March 2024, at a particularly tumultuous time at POL. Whilst the results
show some improvements against the results of the previous year, they also
show negative movement compared with the ‘Pulse’ survey carried out in the
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Autumn of 2023. It is particularly clear from the results that Postmasters were
very concerned about the impact of POL’s negative publicity on their
businesses. My understanding from recent conversations with Postmasters is
that this is a continuing concern. Although the levels of trading activity have
held up through 2024, Postmasters are understandably concerned that, as a
result of the damaged Post Office brand, their franchises may be seen as less
valuable and more difficult to sell in the future. The results also show that
Postmasters believe that the publicity has had a negative impact on their
reputation and staff morale.
211.It is clear from the results that the primary concern amongst Postmasters is the
level of remuneration they receive from selling POL products and providing
POL services to customers. The cost-of-living crisis has had a significant
impact and Postmaster remuneration has not kept pace with rising costs. This
is largely because POL has not had the financial capacity to raise remuneration,
as I have explained above at paragraphs 100 to 101.
212.The results also show that more recently there has been a polarisation of views
amongst Postmasters, with more Postmasters scoring at the extremes of the
scale. I agree that this is partly due to the introduction of new carriers into the
network (and the connected pick-up and drop off, “PUDO”, service). This has
been a very positive development for many Postmasters, whilst on the other
hand those who do not have these services are frustrated that they cannot offer
them. I think that the polarisation has also been exacerbated by external
factors, such as the ITV drama and the Inquiry, and the cost-of-living crisis. It
is also my view that these external factors, as well as remuneration issues,
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have contributed to negative trust and transparency metrics in the Postmaster
survey.
213.Communication and Postmaster involvement have also been regular themes
in Postmaster surveys. In light of the results from previous surveys, POL has
engaged far more widely with Postmasters and regularly hosts listening groups
and regional fora. POL also introduced weekly emails to Postmasters from the
GCRO which cover a range of key topics. We were pleased to see that our
focused engagement initiatives seem to have driven some improved metrics in
this area of the survey. In addition, interactions with Area Managers scored
strongly as a positive and helpful channel of communication for Postmasters.
We were also pleased to see such a strong level of participation in the
Postmaster survey itself, compared with previous years.
214.One of the challenges that POL faces in carrying out the Postmaster surveys
is the vast differences in the type of Postmasters, whose aspirations and
business practices vary considerably. Some Postmasters run single branches
with little retail activity whereby income received from the sale of Post Office
products and services is the sole driver of commercial success. Other
Postmasters and ‘Strategic Partners’ run multiple outlets, which focus more on
their retail offerings and use the Post Office franchise to drive footfall into their
outlets. Whilst Postmasters across the spectrum have experienced rising costs
and desire an increase in remuneration, some are much more reliant on POL
income than others.
Postmaster Survey results: post-survey actions
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215.The retail function has taken steps to understand and address the Postmaster
survey results. They have been working together with a group of Postmasters
and the survey provider, Quadrangle, to draw up a detailed action plan to do
so. This has also involved working with Quadrangle to analyse and understand
the survey data. For example, Quadrangle are supporting us in seeking to
understand the reasons behind the increased polarisation across the
Postmaster population (as mentioned at paragraph 212 above). The three key
themes of the action plan are: leadership and culture; reputation and trust; and
future and strategy.
Postmaster Survey results: distribution
216A summary of the Postmaster survey results was shared with Postmasters in
an email on 15 May 2024 and were also shared with POL colleagues that same
day at a town hall meeting. The results were subsequently covered in more
detail at a Postmaster conference in London on 18 June 2024, and a recording
of this meeting was provided to all Postmasters in the network. Therefore, every
Postmaster has had an opportunity to see the results in both written and
presentation format.
Strategic Partner survey
217.There are notable differences between the Postmaster survey results and the
Strategic Partner survey results - generally the Strategic Partner results seem
to be more positive. Whilst I think that this is partly due to the difference in
reliance on POL income across the Postmaster spectrum (as mentioned above
at paragraph 214), Strategic Partners have also reported improvements in
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terms of engagement events and reporting, which are areas that have been
addressed in response to previous Strategic Partner surveys, for example
through the provision of more informative trading data and more regular
interactions with POL. The Board has requested that the Strategic Partner and
Postmaster surveys align more effectively in future so that differing sentiments
between the two groups can be better understood and addressed.
218.Having said this, the Strategic Partner survey did raise constructive themes
around the wider business focus on independent Postmasters. I agree that this
focus should eventually be re-balanced, but at the same time there are good
reasons as to why POL has focused on putting independent Postmasters at the
heart of its strategy in recent years, the most obvious being the impact of the
Horizon scandal on many of these Postmasters.
Statement of Truth
I believe the content of this statement to be true.
Dated: 28th August 2024
Page 79 of 80
WITN11380100
WITN11380100
Docusign Envelope ID: 2F0653B3-2956-4E8F-B03B-50F6BAF36665
Index to First Witness Statement of Owen Woodle:
fon ot, ontrol
No. I URN Document Description Control
IPOL00446477 \Grant Thornton's report dated 25 June 2024 IPOL-BSFF-
1. entitled "Post Office Limited: Governance review — I099-0000003
Final".
2. IRLIT0000201 [Times article dated 19 February 2024 IRLITO000201
IPOL00448653 IThe email chain with the subject line “Re: Project IPOL-BSFF-
Pineapple” between Elliot Jacobs, Saf Ismail and ITN-005-
3. Henry Staunton, dated 14 — 15 January 2024. (0010773
Attachment entitled “Re: Project Pineapple” to
email POL00448412.
IPOL00448651 WVoice of the Postmaster press release dated 15 = IPOL-BSFF-
Nanuary 2024. Attachment entitled “VotP-Press- ITN-005-
4. IRelease-Jan-2024-1-v1-Copy” to email (0010771
IPOL00448412.
IPOL00448652 [Letter to Henry Staunton from Brent on behalf of I [POL-BSFF-
ithe Voice of the Postmaster committee, requesting IWITN-005-
5. ja meeting. Attachment entitled “VotP-letter to (0010772
Henry” to email POL00448412.
IPOL00448412 IThe email (and its attachments) from Nick Read to [POL-BSFF-
[Martin Roberts and Ben Foat, copying Owen ITN-005-
6 foodley, Tracy Marshall, and Philippa Hankin, of I(0010770
. (08:00 on 18 January 2024, with the subject line
"FW: Future of Post Office branches".
7. IRLIT0000248 IBBC article dated 17 April 2024 IRLITO000248
8. IRLIT0000249 ISky News article dated 23 April 2024 IRLITO000249
g. IRLIT0000257 IThe Telegraph article dated 30 March 2024 IRLIT0000257
40 Headline Results document relating to POLs 2024 [POL-BSFF-
‘[POL00446680 [Engagement Survey 1(097-0000008
IPOL00446704 Postmaster Survey Results slide pack IPOL-BSFF-
11. (097-0000032
12 IPOL00446681 [Engagement Survey slide pack IPOL-BSFF-
: (097-0000009
IPOL00446682 Postmaster Sentiment Survey, April 2024 IPOL-BSFF-
13. 097-0000010
Page 80 of 80