Marks and Spencer 2016 Annual Report Download - page 33

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ANNUAL REPORT AND FINANCIAL STATEMENTS 2016
FINANCIAL STATEMENTS OUR BUSINESSOUR PERFORMANCEGOVERNANCE
We also provide insight relating to director:
> Independence Maintaining the right
balance of independence on the Board;
> E ectiveness The review this year was
internally facilitated. We update on the
output and the action plan for the year
ahead on page 39; and
> Ongoing development Business
training, engagement and mentoring.
The UK Corporate Governance Code 2014
(the ‘Code’) is the standard against which we
were required to measure ourselves in 2015/16.
A c o py of th e C o d e i s av a i l a b l e f r o m th e
Financial Reporting Council’s website.
We are pleased to confi rm th a t w e co m p l i e d
with all of the provisions set out in the Code
for the period under review.
A summary of our governance profi le, outlining
our compliance with key areas of the Code,
has been set out above.
To keep this report interesting and engaging,
we continue to focus on the key insights from
the business; however, further detail on how
we comply with the Code can be found in our
Corporate Governance Statement, available at
marksandspencer.com/thecompany.
UK CORPORATE GOVERNANCE CODE
BOARD OVERSIGHT AND MONITORING
We have highlighted our risks and risk
management process on pages 27 to 29.
While the Board is responsible for these, the
Audit Committee has played a key role in
ensuring that the appropriate governance
and challenge around risk and assurance
is embedded throughout the business.
It has been closely monitoring the
management of our cyber risk, health and
safety and business continuity of our UK
and international operations, and has
undertaken a thorough review of the
notable non-underlying items impacting
this year’s performance. Information on the
activities of the Committee can be found
on pages 42 to 46 of this report.
In supporting talent and future leadership
for the business, the Remuneration
Committee has reviewed our remuneration
framework, to ensure it remains relevant to
the business, and continued to develop and
test the setting and disclosure of objectives
and targets. The Committee’s activities,
considerations and a summary of our
Remuneration Policy, are on pages 50 to 71.
APPOINTMENTS AND BOARD CHANGES
We made a number of changes to the
Board this year. On 1 April 2015, we
welcomed Helen Weir as Chief Finance
O cer. She has brought considerable
fi nancial challenge to our processes, data
and key performance metrics and has built
a strong team to support the business.
In April 2015 Richard Solomons joined the
Board as Non-Executive Director. As the
CEO of Intercontinental Hotels Group,
he brings considerable knowledge of
operating an international, multi-channel
consumer business.
In July 2015, John Dixon, Executive Director
of GM, resigned from the Board. Given his
success in running Food for three years,
Steve Rowe was appointed to the role.
In December 2015 we were delighted to
appoint Andrew Fisher as a non-executive
director; he brings considerable experience
of digital services, consumer insight and
international context to the M&S Board.
His appointment followed a review of
the Board experience and skills. The
Nomination Committee set a clear search
specifi cation which focused on digital and
consumer experience. This appointment
was part of our planning for the retirement
of Martha Lane Fox, who stepped down
as a non-executive director on 2 April,
after nearly nine years on the Board.
Andrew, Helen and Richard all undertook
comprehensive inductions into the
business. Detail on Andrew’s induction
programme is provided on page 38,
an overview of Helen’s and Richard’s
was provided in last year’s report.
These appointments bring new energy,
challenge and oversight to the Board.
Their additional skills and experience build
on our existing talent and will stand us in
good stead for the year ahead.
We continue to drive the agenda of
diversity in its broadest sense across the
business, and are proud to have built a
workforce that is diverse in terms of gender,
experience, ethnicity, age and levels of
physical ability. Further insight is provided
on page 41 and in our Plan A Report.
We hope this report demonstrates how
our governance helps us test whether
we are doing the right things in the right
way, with the right safeguards, checks
and balances, and whether the right
considerations underpin the decisions we
take. Furthermore, we report with honesty,
integrity and transparency to ensure our
stakeholders receive a fair and balanced
view of the business in which they invest.
We approach the year ahead with
confi dence in our leadership and business
and as outlined on pages 06 to 08, our
focus will be on performance and delivery
of our strategic priorities.
ROBERT SWANNELL CHAIRMAN
Governance at M&S is an important element
of our Board environment. It feeds into how we
do business, how we serve our customers and
our other stakeholders. It therefore needs to be
authentic and meaningful.
In line with previous years, we have used the
key themes of the UK Corporate Governance
Code as the framework for articulating the
Board’s activities during the year:
> Leadership and E ectiveness are on pages
32 to 41
> Accountability on pages 27 to 29 within the
Strategic Report and pages 42 to 48 in the
Directors’ Report
> Stakeholder engagement and relations with
shareholders on page 49
> Remuneration on pages 50 to 71
Additionally, information on the Governance
of our Pension Scheme is provided on page 72.
The required governance and regulatory
assurances are provided throughout this
Directors’ Report in a way that refl ects their
relevance to the business. As in previous years,
we have sought to provide insight as to how
governance supports and protects the M&S
business and our stakeholders in a practical way.
Where information would previously have been
located within the Directors’ Report, and has
instead been incorporated into the Strategic
Report, a list of page references is available
within the ‘Other Disclosures’ section on page 73.
Every year we review and benchmark our
governance framework against best practice.
The framework sets out the roles, accountabilities
and expectations for our directors and our
structures. This format has been adopted widely
across the business and can be viewed at
marksandspencer.com/thecompany.
GOVERNANCE PROFILE
Independence Over half of our Board is made up
of independent non-executive directors, in line
with the UK Corporate Governance Code.
Senior Independent Director Our Senior
Independent Director is Vindi Banga.
Accountability and election We have clear
separation of duties between Chairman and
CEO roles, and require all the directors to stand
for re-election annually.
Evaluation An internally facilitated performance
evaluation of the Board and its Committees
was undertaken during the year. An external
evaluation will be undertaken next year.
Attendance The directors have all
attended an acceptable level of Board
and Committee meetings.
Compliance The composition of all Board
Committees complies with the application
recommendations of the Code.
Experience Throughout 2015/16, the Audit
Committee chairman met the specifi c
requirements with regard to recent and
relevant fi nancial experience.
Tenure We changed our auditor in 2014/15,
following a thorough tender process.
Non-audit policy We have a policy for the award
of non-audit work performed by our auditor,
which is disclosed on our website, and we have
disclosed the limited non-audit work undertaken.
Auditor appointment We disclose our external
auditor appointment policy.
Internal Audit Details on the Internal Audit
function are provided within this report.
Performance-related pay A signifi cant part
of our performance-related pay is delivered
through shares.
Reward Our reward framework is simple and
transparent and is designed to support and
drive our business strategy.
GOVERNANCE – KEY FEATURES