Marks and Spencer 2006 Annual Report Download - page 4

02 Marks and Spencer Group plc
Charles Wilson, executive director, left in
October 2005. During his time with the
Group, Charles played a central role in
helping us to cut costs, work that was
critical in beginning to return M&S to health
and which is now deeply embedded in our
processes. I express appreciation to
Charles, on behalf of the Board, for the part
he played in creating a strong foundation
for growth.
We also said goodbye to Anthony Habgood,
who stood down as non-executive director
to give more time to other business
interests. Kevin Lomax will be leaving the
Board on 31 August 2006, having served
as a director for six years and Senior
Independent Director since July 2004.
I would like to thank them for their
contribution.
We were pleased to see Ian Dyson and
Steven Sharp become executive directors.
We are also delighted that Louise Patten,
Jeremy Darroch and David Michels have
brought their varied and broad experience
to the Board as new non-executives.
The Board now has the necessary balance
of skills. I am confident that challenges
to the executive directors from the non-
executives will focus on the right issues
and will be conducted in a constructive
and collegiate manner.
To ensure that the Group has a highly
capable executive team, our remuneration
packages need to be competitive. We are
recommending changes to the Annual
Bonus Plan and Performance Share Plan,
which I ask you to support.
Bonus targets remain extremely demanding.
Over half of any bonus awarded would be
paid in shares, which must be held for three
years. We are committed to rewarding
success, not failure and directors’ contracts
are subject to a clear obligation to mitigate
cost to M&S.
These changes continue to align
directors’ rewards with the long-term
interests of shareholders.
The AGM in July will be my third and last
as Chairman. Terry Burns will become your
new Chairman after the meeting. I know
that he will provide the Board with effective
leadership. Terry brings to the task skills
honed in a successful career in academia, the
Civil Service and, latterly, business, including
his Chairmanship of Abbey National.
The plan Stuart and I set out when we first
spoke to shareholders in July 2004 is being
implemented and remains intact. Today,
M&S is in better shape. But there is still
much more to do.
Last year in Clothing and Home, we worked
hard on restoring our competitiveness,
engaging with our suppliers to improve
value, styling and the amount of new and
exciting product across our ranges. In Food,
we continued to focus on offering high
quality, innovative products. This is
beginning to contribute towards improved
customer perceptions, market share and
financial performance.
At the same time, we extended our store
refurbishment trial and continued to open
new mainline and ‘Simply Food’ stores.
Finally, improved service remained a priority.
We undertook our biggest ever customer
service training programme. We also
overhauled pay rates and improved career
planning for customer assistants. This will
help us attract and retain the best people
for our business.
In 2006/07, we are continuing to build on
the progress we made last year, working to
offer great product, in great stores through
great service.
We are clear about what we have achieved.
But we are equally clear that, at a time of
intense competition, there can be no let-up
in the work to return M&S to profitable
growth.
We must remain focused on our main task –
to create value for shareholders by
developing a trusted brand and delighting
customers with superior product at prices
which offer real value.
I wish my colleagues all the best in
continuing this work during 2006/07
and beyond.
Paul Myners, Chairman