Marks and Spencer 2008 Annual Report Download - page 42

In light of these proposed changes and their sensitivities
the Board was concerned about the risk of leaks and did
not consult major shareholders in advance. The Board was
unanimous and clear that the proposed changes, taken as
a whole, were in the interests of shareholders, customers
and employees. The Board was also clear that whatever
consultation was undertaken in advance of an announcement,
its deliberations would nonetheless be subject to comment
and scrutiny. The Board also knew that it would, rightly, be
obliged under the Code to explain why it was proposing to
combine the Chairman and Chief Executive roles and to
answer questions from any shareholders with concerns.
Since the announcement, Lord Burns has consulted with a
number of principal investors and shareholder representative
bodies and he and Sir David Michels have met with those
who had requested a meeting. A letter was also sent to all
shareholders on 3 April 2008 setting out the detailed reasons
behind the Board’s decisions.
Division of responsibilities
The Board has reviewed and agreed a clear specification
of duties under the new Board structure to ensure a proper
division of responsibilities and balance of power. The Deputy
Chairman will have joint responsibility with the Executive
Chairman, for the agenda and the overall Board structure and
composition. He will chair the Nomination Committee, provide
leadership for the non-executive directors, be responsible
for monitoring Board effectiveness and lead on corporate
governance issues. Sir David Michels has committed to spend
sufficient and significant time in his role as Deputy Chairman.
He is resigning from the Board of The British Land Company
PLC and resigned from RAB Capital PLC on 18 April 2008 in
order to ensure that he can fulfil his commitments.
In addition, the non-executive directors will meet independently
at least twice a year to keep the governance structure under
review to ensure appropriate safeguards are in place to protect
shareholder interests.
Board balance and independence
On 29 March 2008 the Board comprised 11 directors:
the Chairman, Chief Executive, four executive directors and
five non-executive directors. On 1 June 2008 the Board will
comprise 10 directors: the Executive Chairman, non-executive
Deputy Chairman, four executive directors and four further
non-executive directors. A full list of the directors, with details
of their biographies and committee membership, is given on
page 32.
The Board concludes that each non-executive director is
independent in character and judgement and will keep under
review whether there are relationships or circumstances which
are likely to affect, or could appear to affect, independence.
40 MARKS AND SPENCER GROUP PLC
Corporate governance statement
continued
The principal roles of the Executive Chairman, Deputy
Chairman and non-executive directors are set out below:
Executive Chairman
• to ensure the Board achieves its full potential to build
a sustainable business for the long term, generating
shareholder value through consistent, profitable growth
whilst making sure that our customers always trust us
to do the right thing; and
• to act within delegated authority from the Board for
all aspects of the management of the Group, which
includes developing appropriate business strategies
for Board approval and achieving timely and effective
implementation.
During the period of combined Chairman and Chief
Executive: to keep the Deputy Chairman regularly informed
on all matters that may be of importance to the Group,
including its current performance and progress; and to
monitor performance of the executive directors in their
increased responsibilities, whilst focusing on the strategic
growth areas of the business.
Deputy Chairman and Senior Independent Director
• to lead on all governance issues including conducting
the annual review of Board effectiveness and ensuring
that the performance of individual directors is kept under
review; and
• to provide a communication channel between the
Chairman and non-executive directors and, when required,
principal shareholders including representative bodies.
During the period of combined Chairman and Chief Executive:
to monitor the effectiveness of the role of Executive
Chairman; independently to lead the succession process
for the appointment of a Chief Executive by 2011; and to
maintain contact with principal investors and representative
bodies on a regular basis, keeping the Board informed.
Non-Executive Directors
• to bring an independent and external dimension to the
Board’s activities and play their part in relation to strategy,
performance, risk and people; and
• within the spirit of partnership and mutual respect on
the unitary board, to support, constructively challenge
and monitor the executive team.
During the period of combined Chairman and Chief
Executive: to keep the governance structure under review
to ensure appropriate safeguards are in place to protect
shareholder interests.