Marks and Spencer 2013 Annual Report Download - page 40

Governance Marks and Spencer Group plc Annual report and financial statements 2013 38
Governance
Chairman’s overview
“ The Board is the
guardian of the M&S
brand, its reputation
and stakeholder
relationships.”
Robert Swannell
Chairman
For many decades M&S has based its core values around
Quality, Value, Service, Innovation and Trust. These values have
played a key role in underpinning the integrity of our products,
brand and way of doing business, giving M&S a real point of
difference and special culture.
We see these values as key to the way we work with our
customers, our suppliers and our colleagues across the
business. They go to the heart of how we try to behave as an
organisation. As a Board these values support and inform the
way we review and debate our plans and ensure the right
environment for decision-making and challenge in all areas of
strategy, performance, responsibility and accountability.
Our values are recognised across the business. They are
fundamental to Plan A which celebrated its fifth year this year
and which simply could not have taken root in the way it has at
M&S without an existing culture that embraced it. Plan A is not
a disembodied CSR programme; it is a whole company way of
doing business.
As a Board how can we use these values to our advantage?
How can we ensure that we remain trusted and respected not
only for what we do and the integrity of the decisions we make,
but how we take those decisions? Do we as a Board set a clear
example from the top which will reinforce a culture of trust and
integrity in line with our values and ensure our future success?
These are questions for many organisations and those in
positions of leadership and trust.
Our values were tested in January when elements of our Interim
Management Statement appear to have been leaked to the
press. The implied breach of trust or carelessness was felt
profoundly in the organisation. We were determined that a
thorough, independent investigation was required of the leak and
of our process and controls and that we would learn from our
findings. The level of support for this action across the business
highlighted just how strongly the team felt about the relevance of
trust and integrity, not only for the company and the brand but
also towards our fellow colleagues. The findings of the
investigation have now been discussed by the Board and
appropriate measures implemented.
These values were also highlighted when the integrity of our
product and trust in our supply chain in Food meant that we were
not impacted by the horsemeat scandal. We have discussed our
processes and controls in this area in our Board and Audit
Committees meetings over the past year and recognise the hard
work of our Food team in building strong relationships and
knowledge of our suppliers. In this way we have ensured, so far as
we can, the quality and integrity of our product from farm to fork
so that customers can trust us for what we sell. Our deep-rooted
values demonstrated their worth in guiding the principles for how
we do business and if we continue to respect these, they should
continue to support us for the longer term.
At a time when breaches of corporate trust and integrity are
under the spotlight, resulting in ever greater scrutiny, regulation
and control, we believe our values could not be more relevant,
essential and valuable to sustain us for our long-term future.
Commentators recognise when trust and integrity are lost but
often attribute little credit to those who do their best to instil
and uphold high standards.
We continually try to find an appropriate balance between the
myriad factors upon which we, as a Board, must focus. These
range from our key commercial issues and our long term
strategy, to our response to enhanced governance processes
and reporting.
While the increase in scrutiny is sometimes testing, we
welcome the opportunity for clear challenge and frank dialogue
with our stakeholders. We were pleased that our governance
event was so well attended by investors and a wide range of
shareholder representative bodies, keen to engage with us on
a range of issues relating to our Board process, management
of risk, approach to remuneration and our progress to become
the world’s most sustainable major retailer. This year we have
also undertaken many more investor events to communicate our
progress on key aspects of our strategy. We believe that
greater levels of stewardship and engagement enable better
understanding about the issues we face and our deliberations
on them, as they relate to our business and people.
We welcome calls for greater openness and transparency on
Board deliberations, which in turn challenge us to plan our
agendas to maximise our impact, look at the way we do things
and reflect on the quality of the decisions we have made. We
have worked hard to build an engaged, trusted team and an
environment where we can all be honest and direct about what
we have done well and where we can do better.
We will not get everything right all of the time, but will learn
where we make mistakes – our annual Board evaluation assists
us in highlighting areas in which improvements can be made.
Last year we made good progress in achieving our plans,
including hosting our first Board meeting in Turkey.
This year’s report – key activities
Following the positive feedback we received around the level
of openness relating to our Board activities and debate last
year, this year we are providing:
–enhanced integration across the report;
–greater insight into our Board strategy discussions;
–further disclosure from our Audit Committee, including
detail on our audit tenure discussions;
–greater depth to our remuneration disclosure and targets;
–more information and insight from our Nomination
Committee including debate around succession and a full
response to our diversity policy.
As a Board we regularly discuss and review:
–our performance today and our progress towards our goal
to become an international multi-channel retailer
–our brand and reputation and how we can ensure our
behaviours and processes protect us for our future
–our people, and how we can create a high performing
team, potential for future development and succession
along with appropriate motivation and reward
–our customers, suppliers and local communities ensuring
we treat them all fairly and respectfully
–our shareholders and how we can communicate openly on
the way we manage and challenge the business
–Plan A and our plan to become the world’s most
sustainable major retailer
These all reflect the considerations for directors as referenced
in the Companies Act and which our directors know they are
trusted to consider on behalf of all stakeholders.