Marks and Spencer 2011 Annual Report Download - page 46

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Now more than ever, the M&S Board is committed to best
practice in its governance activities. In line with this best practice,
and reflecting the significant changes to the Board line-up this
year, we took the decision to commission our first ever
independently-facilitated Board review.
Our aim was to capture open and constructive feedback from
Board members that would:
– provide insight into our effectiveness;
– point to actions for improving our performance; and
– establish a benchmark for measuring future progress.
Our Board review was conducted according to the guidance
in the UK Corporate Governance Code 2010. All participants
were interviewed according to an agenda tailored specifically
for our Board. The outputs have already begun to inform our
action planning for 2011/12.
Board members were hugely supportive of our aims, embraced
our desire to elicit a diversity of views and demonstrated a
commitment to achieving exemplary Board performance.
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Our review was conducted by Ffion Hague of Independent Board
Evaluation, a wholly independent consultant who has no other
relationship with M&S.
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Structured interviews with Board members took place between
January and March 2011 with each participant asked to evaluate
the Board, its Committees, the Chairman and individual Board
members.
Subjects covered included a general overview as to the ‘state’
of the Board, how it was operating at the time and how that had
changed in recent months. Directors were also asked about
shareholder relationships, how the business interacts with
shareholders and how those relations might be improved.
Views were sought on the Board’s input into strategy discussions,
governance and compliance, risk management and succession
planning. The Board’s own composition was also examined,
looking at culture and the relationships with senior management
as well as how new members are selected and inducted.
A separate section looked at how the Board could move
from ‘good’ to ‘great’ and what would be required to drive
continuous improvement, including how to access the widest
possible reserve of skills, experience and knowledge within
our team.
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There was a widespread view that ours is a Board in transition.
We identified a high degree of support for the new leadership and
the way in which new members were introduced and inducted
during the year was felt to have further served to unify the Board.
The Board also expressed a desire to ensure a balance is struck
between regulatory compliance and the need to nurture an
entrepreneurial spirit within the business.
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The insights gathered from the Board review have resulted in a
clear action plan for the year ahead. The actions address the
key areas of succession and people, Board composition, Board
debate, risk management and shareholder engagement.
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On joining M&S, directors receive a tailored induction programme.
This includes time with the Group Secretary, each of the Executive
Directors, members of the Management Committee and a wide
range of senior management from across the business.
By way of example, Robert Swannell received a
comprehensive induction programme covering:
Company structure and strategy: including Group structure:
history, strategy, vision, key people, succession plans,
Board procedures including Governance Framework and
Code of Ethics and Behaviours, Board Committees, calendar,
minutes, Board effectiveness reviews and action plans,
finances and performance, operating plans, current KPIs and
targets, operational overview of all business areas, key
relationships including suppliers and major contracts, Group
Risk Profile and our approach to risk.
Industry and competitive environment: including customer
trends, consumer and regulatory environment including
governance and all relevant consumer and industry bodies,
CSR environment and sustainability.
Sentiment and reputation: including brand positioning and
media profile, marketing campaigns, brand values, analyst
and investor opinion, review of investor surveys, share register
and voting history, key stakeholder relations including
employees, customers, suppliers, service providers, opinion
leaders, an overview of our remuneration policy and pensions.
His programme was supported by one-on-one meetings
with management from General Merchandise, Food ,
Multi-channel, International, Retail, Finance, Property, Plan A,
Marketing, Customer Insight Unit, Human Resources,
Communications and Investor Relations, Internal Audit
andRisk, Pensions, the Company Archive and the
Governance Group.
Robert visited a number of our stores with the Retail team
and our distribution centre in Bradford with the Logistics team.
He also met with key investors and suppliers.
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During the year, the Board plans to:
– create a clear framework around succession planning and
support and development for key managers;
– review Board and Committee composition to encourage
true diversity of experience and outlook;
– ensure a real focus on the level of debate in the boardroom
and understanding of the longer term;
– build on the risk management process to ensure
appropriate challenge to and understanding of our risk
appetite and tolerance going forward; and
– continue our active engagement with shareholders.
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.B SL TBO E4 Q F OD FS( SP VQQ MD Annual report and financial statements 2011
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Governance report
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