Marks and Spencer 2016 Annual Report Download - page 38

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MARKS AND SPENCER GROUP PLC
DIRECTORS’ REPORT: GOVERNANCE
BOARD ACTIVITIES
TOPIC ACTIVITIES/DISCUSSION ACTIONS ARISING PROGRESS
Strategy Discussed strategic
priorities, including
the combined Food
and Clothing &
Home proposition.
> Conduct a thorough review of UK store estate,
including format and profi tability.
> Improve capability in buying, merchandising
and design in respect of Clothing & Home.
> Review organisational capability across
all departments.
> Improve processes around succession planning
to ensure candidates build required skillset.
> Provide more challenge to accepted practices.
> Become more agile and less risk averse in piloting
new initiatives.
> Drive simplicity in our culture, organisational
structure and processes.
> Accelerated rollout of new Simply Food stores.
> Senior leadership appointments made in
critical areas with proven talent.
> Centralised design authority through
introduction of Design Director structure.
> New design and product forums introduced
to encourage colleagues to share knowledge
and upskill.
> Identifi ed actions to bring brand proposition
to life in store.
Discussed the Group’s
capital structure
and fi nancial strategy,
including capital
investments,
shareholder returns
and the dividend policy.
> Continued investment to promote sustainable
business growth over the long-term.
> Utilise improved cash-fl ow position to implement
ongoing, sustainable programme of returns of
capital to investors.
> Strong cash generation due to better
buying, lower capital expenditure and
robust cost management.
> £150m returned to investors through
a share buyback programme.
> Total dividend for the 2015/16 up to 18.7p,
a 3.9% increase on last year.
Reviewed the
development
of the strategic
logistics network.
> Consider scenarios for future business requirements.
> Evaluate proposals for improved network design.
> Investigate opportunities for further operational
improvements.
> Substantial progress made in development
of logistics network design in support of
business requirements.
> Detailed transition plan to move to a single
tier network.
> Lessons learned from early stages of project
leading to improved processes for current
and future development phases.
Reviewed international
strategy, including
key priorities.
> Review of international franchise operations in the
context of a changing macro-environment.
> Identify and prioritise initiatives to deliver the
international strategy.
> Deliver the relevant product ranges for local
customers.
> Build an international supply chain that is fi t
for the future.
> Adapt and implement e-commerce business
model to drive sustainable and profi table growth.
> Key growth drivers in franchise markets
identifi ed.
> Increased focus on proven markets
and concepts.
> Write down of assets and exit costs linked
to withdrawal from Balkan region.
> Proposed store openings kept under review
to ensure appropriate balance of food and
full line stores in target markets.
Governance
& risk
Discussed internal
governance processes
underpinning
key programmes
and initiatives.
> Review the business’s programme management
and post investment review processes to
improve delivery.
> Progress made in pinpointing particular
areas for improvement and implementing
a ‘One Best Way’ approach to programme
management.
Discussed new
Corporate Governance
developments and
disclosure requirements.
> Clearly defi ne the Company’s risk appetite and
determine the nature and extent of principal risks.
> Discuss and determine the Company’s longer-term
viability disclosures, accounting for current position
and principal risks.
> Review of risk appetite statements in the
context of the principal risks and objectives.
> Agreed scope, appropriate lookout period
and timeline in respect of the newly required
long-term viability statement, in line with
the UK Corporate Governance Code.
Reviewed progress
against the 2015/16
Board Action Plan.
> Conduct an internally facilitated Board Evaluation
> Obtain and evaluate director feedback on the
processes, e ectiveness and working of the Board
and Committees.
> Introduced internal Board framework
> Agreed 2016/17 action plan with clear process
for monitoring during the year.
Half yearly review of
Group Risk Profi le,
covering core internal
and external risks,
risks driven by business
change and areas of
emerging risk.
> Assess the e ectiveness of the Company’s risk
management systems.
> Review completeness and ordering of the Group
Risk Profi le, including key risk movements, and
considered appropriate mitigating factors.
> Ongoing robust debate around risk appetite.
> Agreed a robust set of Group level risks
and mitigating activities, which are
regularly monitored.
> Further developed the Board’s approach
to risk appetite and agreed a set of
Group-level statements.
> Considered movements in key risks resulting
from changes to likelihood or business
impact, recategorising as appropriate.
Conducted a review
of the Company’s cyber
security position.
> Assess the strength of M&S’s cyber security
policies, capability and areas of risk.
> Discuss the structure of our approach to
cyber security in light of recent changes to data
protection legislation.
> Provide an objective assessment of business
capabilities in light of the relevant risks.
> Robust plans in place to ensure the business‘s
cyber security systems remain su ciently
robust going forward.
> Existing capabilities comprehensively
reviewed and consideration given to future
developments in the area of cyber security.
> Areas of risk identifi ed and future
priorities agreed.
LEADERSHIP & EFFECTIVENESS
OUR BOARD CONTINUED