Marks and Spencer 2013 Annual Report Download - page 41

Governance Marks and Spencer Group plc Annual report and financial statements 2013 39
Overview Strategic review Financial review Governance Financial statements and other information
Our Committees and Committee Chairmen
For more on our Governance framework go to
marksandspencer.com/thecompany
This year, our Action Plan again sets out specific objectives to
improve our Board performance. Some of these are now part
of a longer term journey, but all aim to enable the right
environment for debate and reflection on the quality of our
decisions. These should enhance and underpin trust and
sustain our values longer term.
We do not see governance therefore as simply a box-ticking
exercise, nor as a generality related to processes or control. We
see it more about testing whether we do the right things, in the
right way, ensuring we have the right safeguards, checks and
balances in place and that the right considerations underpin
every decision we take. We believe that this practical approach
will support our performance for the long-term and protect the
trust, integrity and value of our business and our brand.
UK Corporate Governance Code
The UK Corporate Governance Code 2010 (the ‘Code’)
remained the standard against which we were required to
measure ourselves throughout 2012/13. We are pleased to
confirm that we complied with all of the provisions set out in
the Code for the period under review. We remain committed
to the very highest standards of corporate governance and as
such have benchmarked ourselves against the UK Corporate
Governance Code 2012 which we are not formally required to
report against until 2014. We already comply with a significant
number of the additional provisions and expect to be fully
compliant by 2013/14.
To see how we comply with the Code go to the investor section of
marksandspencer.com/thecompany
Those with a QR reader can use the link on the bottom right of this page
The required regulatory and governance assurances are
provided throughout this report. As in previous years, we have
sought to provide a genuine understanding of how governance
supports and protects the M&S business in a practical way.
We use the key themes of the Code as the framework for
articulating this narrative. Feedback from shareholders has
encouraged us to keep a similar format to previous years
so our approach to Leadership is outlined on pages 42
to 43, Effectiveness on 44, Accountability on 45 to 48,
Engagement and relations with shareholders on 49 to 50,
Remuneration on 55 to 70 and the Governance of our
Pensions Scheme on 71.
Our Governance Framework is reviewed every year and 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 in the ‘Investors’
section of marksandspencer.com/thecompany.
Appointments and succession
The Nomination Committee has continued to work on ensuring
appropriate succession and mix amongst both the executive
and non-executive directors. We have set out our ambitions
and objectives in shaping the Board for the future in our Board
Diversity Policy. We are conscious that, following Kate
Bostock’s departure and the subsequent appointments of
Steve Rowe and Andy Halford, the percentage of women on
the Board has fallen to 21% this year, below our target of 30%.
However, this will increase to 23% following Jeremy Darroch’s
departure from the Board on 19 June 2013. We remain
committed to our target and advocating the role women play at
the top of organisations and at M&S in particular. However, we
continue to make appointments based on objective criteria to
ensure we appoint the best individuals with diverse experience
and background for the role.
In July 2012, we announced that Kate Bostock would be
leaving M&S after eight years. In September, John Dixon was
appointed Executive Director, General Merchandise, moving
across from his previous role in Food. Steve Rowe, previously
Director of Retail, was appointed to the Board to succeed John
as Executive Director, Food.
As part of our succession planning, in December we
announced that Jeremy Darroch would be leaving M&S in
2013, after seven years on the Board and as Chairman of our
Audit Committee. We appointed Andy Halford as non-executive
director in January and he will succeed Jeremy as Chair of the
Audit Committee in June 2013. At that time we also announced
that Steven Holliday will remain on the Board for a further year,
stepping down at the 2014 AGM, by which time he will have
served ten years on the Board. This will allow us to phase the
change in Chairman of these two important Committees. In
spite of the proposed length of Steve’s tenure, the Board is
confident that he will continue to provide strong and
independent oversight to Board debate while continuing to
bring his significant experience, knowledge and leadership to
the Chairmanship of the Remuneration Committee. More detail
on the Board’s debate and assessment of Steve’s
independence is outlined on page 44.
On 21 May, we announced that Steven Sharp, Executive
Director Marketing, will be retiring from the business. He will
step down from the Board following the AGM and will continue
as Creative Director until 28 February 2014. Patrick Bousquet-
Chavanne will take over responsibility for marketing and will be
put forward for election to the Board as Executive Director,
Marketing and Business Development at the 2013 AGM.
The Nomination Committee has also reviewed our future talent
pool and longer-term succession potential. The Committee’s
activities are outlined in detail on page 53.
In supporting this debate on talent and future leadership for the
business, the Remuneration Committee has continued to
develop and test the setting and disclosure of objectives and
targets. These are highlighted in further detail on page 62. In line
with last year, the Committee has also been an active voice in a
number of formal consultations and engaged with shareholders
and shareholder representative bodies on the broader UK
remuneration debate and need for greater transparency.
Monitoring risk
In view of our longer term ambitions and the significant business
initiatives currently underway across the business, the Audit
Committee has played a substantial role in ensuring appropriate
governance and challenge around our risk and assurance
processes. This is covered in further detail on page 45.
Overall, I am pleased with the Board’s activity across the
governance agenda, some of which is highlighted on the
following pages. Further detail is available on our website.
We continue to challenge ourselves and the business and to
reflect and learn from our decisions and debate.
Robert Swannell
Chairman