Marks and Spencer 2008 Annual Report Download - page 43

Information and professional development
The Chairman ensures that the directors receive accurate,
timely and clear information. They receive regular updates
on business performance against the annual operating plan
and investment decisions, together with business reports and
presentations from senior management at Board meetings.
Directors are encouraged to update their skills, knowledge
and familiarity with the Group through their initial induction,
ongoing participation at Board and Committee meetings,
meeting employees at store locations and elsewhere and are
kept up-to-date on the views of customers and shareholders.
The Board is regularly updated on governance and
regulatory matters.
Graham Oakley as Group Secretary acts as a sounding
board to the Chairman and individual directors. He supports
the Chairman in ensuring the Board functions effectively
and fulfils its role. He is secretary of the Audit, Remuneration
and Nomination Committees and also heads the Corporate
Governance Group, which supports the Board and its
committees, as well as providing advice on a range of issues
to commercial colleagues. From 1 June 2008 the Group
Secretary will have an additional reporting line to the Deputy
Chairman to assist him in fulfilling his governance duties.
There is an established procedure whereby the Board or
any of its Committees may take independent professional
advice when appropriate. Any individual director, wishing
to do so in the furtherance of their duties, may also take
independent professional advice through the secretary at
the Company’s expense. Directors are granted an indemnity
from the Company in respect of liabilities incurred as a result
of their office. In respect of those matters for which they
cannot be indemnified, the Company maintains appropriate
liability insurance for the benefit of directors.
Board performance
The performance of the Board is a vital component of the
Group’s success and the Board is keen to ensure that the
annual review of its performance builds on the previous year’s
results to ensure a continuous process. In September 2007
the Board approved an action plan based on the key themes
from the 2006/07 review of process, people, strategy and
performance measures. The action plan also referred to
the new statutory directors’ duties, to address these as
an integral part of Board performance. The Board agreed
to conduct the 2007/08 review ‘in house’ and that it be led
by Lord Burns. In January 2008 each director completed a
questionnaire to rate collective performance over some 20
questions with free text boxes for comments. The Chairman
then reviewed an unattributed executive summary, highlighting
key outcomes which he has subsequently discussed with
individual directors.
Some of the outcomes achieved in 2007/08 following the
2006/07 review:
• a greater focus on the long-term growth prospects of the
business leading to the announcement in November 2007
of our priorities for the next five years. Whilst continuing to
invest in our core business we have ambitious plans for
our UK property portfolio, M&S Direct and International
businesses and Plan A;
• regular reviews of the bench strength of senior
management and future skills and composition of the
Board, leading to the new governance and management
structures announced on 10 March 2008. Succession
planning will continue to be a priority and from 1 June
2008 Sir David Michels, Deputy Chairman, will chair the
Nomination Committee; and
• introduction of an online Board portal to provide a more
secure, efficient and flexible method of delivering Board
papers and easy access to information for induction
and ongoing development.
From 1 June 2008 Sir David Michels as Deputy Chairman
will lead the Board’s review of its performance. He will also
hold meetings with the non-executive directors, without
the executive directors present, to monitor and reflect on
the effectiveness of the new governance structure and to
appraise the performance of the Executive Chairman.
Individual performance
The performance of the executive directors was reviewed
individually by the Chief Executive against set objectives.
Remuneration is directly linked to these reviews and
determined by the Remuneration Committee. Similarly,
the Chief Executive’s performance was reviewed by the
Chairman. The Senior Independent Director reviewed the
Chairman’s performance against a set of previously agreed
objectives. The performance of the non-executive directors
was reviewed individually by the Chairman. This year’s
questionnaire also invited each director to comment on
the individual performances of themselves, other directors
and the Chairman.
Under the new Board structure from 1 June 2008 the Deputy
Chairman will review the performance of the Executive Chairman,
taking into account the views of the non-executive directors.
Committee performance
The process for reviewing the effectiveness of the Committees
in 2007/08 has been to combine ongoing reviews with a
simple questionnaire led by each of the respective chairmen.
The Audit and Remuneration Committees undertook a review
looking at their methods of operation and processes and
combined this with the use of questionnaires which were
conducted in March 2008. An executive summary was
produced for the Chairman of each Committee which they
discussed with their respective Committee members.
Succession planning and senior leadership development
During the year successional planning reviews were held
by the Board and the Nomination Committee resulting in
key appointments to the Board and senior management.
We made important organisational changes, promoting
existing talent and bringing in new people, to ensure we
have the right skills in key areas of focus over the next three
years. Senior leadership development remains a priority.
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