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38
MARKS AND SPENCER GROUP PLC
DIRECTORS’ REPORT: GOVERNANCE
LEADERSHIP & EFFECTIVENESS
OUR BOARD CONTINUED
BOARD ACTIVITIES
TOPIC ACTIVITIES/DISCUSSION ACTIONS ARISING PROGRESS
Strategy Discussed the Group’s capital
structure and fi nancial strategy,
including capital investments
and the dividend policy.
> Continue to invest for growth.
> Consider most appropriate use for
increased cash fl ow now capital
expenditure has decreased.
> Higher growth margins and lower
than expected cost growth, delivering
stronger cash generation.
> Interim dividend increased by 3.2%, with
further 7.4% increase in the fi nal dividend.
Reviewed the property strategy
including the property plan and
key priorities.
> Accelerate growth throughout
UK Simply Food portfolio.
> Deliver international presence
against planned objectives.
> Acquire, develop and manage the global
property portfolio at optimal value.
> Deliver new business unit
schemes and initiatives.
> Investigate opportunities for
development in existing stores.
> Preferred target store locations
identifi ed.
> Accelerated growth in India and
Hong Kong.
> Improved property asset management
across portfolio.
> High level of in -store activit y delivered.
> Ongoing investigation to ensure
optimal balance of in and out of town
retail space achieved.
Two-day o -site meeting provided time to:
> Discuss and review GM and Food strategy.
> Consider customer engagement
and footfall.
> Review the property portfolio to
improve the quality of, and drive value
from, our property assets.
> Debate and evaluate International
performance and growth.
> Test and review the corporate
strategy and fi nancial plan.
> Review Plan A 2020.
> Debate, scrutinise and review performance
against the three-year plan and the
operating plan.
> Review the performance of M&S.com and
Castle Donington (see Customers on p39).
> Review logistics agreements to ensure
alignment with future strategy.
> Review of International operations.
> Debate and approve the Company’s
capital structure and funding plan.
> 102 Plan A commitments to be
achieved by 2020.
> Improve in-store environment and
customer experience.
> Logistics agreements reviewed
resulting in increased transparency
and understanding.
> Development opportunities identifi ed.
> Ful l evaluatio n of international presence
undertaken. Greater focus on store
size, product o ering and availability
byregion.
> Writedown of assets and closure of poor
performing stores in China. Investment
infl agship stores in growth regions.
> Pl an A 2020 – over ha lf of the
commitments achieved or on plan.
> Upgraded the store environment in many
of our stores, including new Menswear
departments in our top 70 stores, and
refreshed Womenswear departments
in 44 stores.
Governance
& risk
Reviewed the Group Risk Profi le half
yearly, including core internal and
ex te rna l r is ks, tho se dr ive n by bu sin ess
change and areas of emerging risk.
Discussed the UK Corporate Governance
Code requirements regarding risk appetite.
> Evaluate the completeness and
appropriateness of the Group Risk Profi le
and identify any additional mitigating
activities to be undertaken.
> Eng age wi th e xter nal risk ex per ts to
prepare draft risk appetite statements.
> Continue to fos ter d ebate on risk ap petite.
> Robust set of Group level risks and
mitigating activities agreed and
monitored.
> Progress made in developing our
approach to risk appetite.
Reviewed progress against the
2014/15 Board Action Plan.
Discussed the outcome of the Board
evaluation process conducted by an
external facilitator, Ffi on Hague of
Independent Board Evaluation.
Discussed the 2015/16 Board
Action Plan.
> Review of Board decision-making
process and debate.
> Review of all management information
and KPIs to improve quality, transparency
and consistency of data, and enable
clearer strategic context.
> Continue to refi ne our approach to risk
appetite across the business.
> Improve tracking, review and debate
on quality of past investments, including
the role of the Board.
> Continue to encourage greater interaction
with Board members across the business.
> Progress ha s been mad e in addressin g
some of the underlying infrastructure
issues of the business, Board members
were contributing well and there is a
positive Board ethos.
> Agreed 2015/16 Action Plan with clear
monitoring processes over the year.
> Plans in place to improve the review
andmonitoring of past Board
decisions, and the quality of
supporting information.
Trust &
values
Discussed the evolution of Plan A to
Plan A 2020 incorporating the values
of Inspiration, Innovation, Integrity,
and In Touch, and the increased focus
on our customers.
> 102 commitments to be achieved by 2020. > 39 on plan; 2 behind plan.
> 47 achieved; 9 not achieved.
> 5 not started.
Launched ‘Fit for the Future’,
incorporating the new M&S brand and
new values of Inspiration, Innovation,
Integrity, and In Touch.
> Engage with employees across the
business to increase awareness of the new
values and provide an opportunity for
employees to give their feedback.
> Over 1,300 head o ce employees took
part in the Fit for the Future focus groups,
including all our executive directors.
The feedback received helped shape
the fi nal values.