Marks and Spencer 2016 Annual Report Download - page 7

OUR BUSINESSOUR PERFORMANCEGOVERNANCEFINANCIAL STATEMENTS
05
ANNUAL REPORT AND FINANCIAL STATEMENTS 2016
stakeholders lies at the heart of our ethical
sourcing and provenance policies. These
are pivotal elements in ensuring the trust
our customers place in us is soundly based.
Doing the right thing is genuinely
embedded in this business. Just as I believe
that people should behave in the right way
towards their neighbours, so I believe that
businesses should do the right thing in their
local communities and this focus on our
customers and communities will continue
under Steve’s leadership. Plan A and our
strong values guide how we behave.
SUCCESSION
Since I became Chairman I have had
a consistent commitment to focus on
our people and succession planning.
Our people are the backbone of our
business and identifying talent and
supporting development continues
to be one of the Board’s key priorities.
At several moments during the year
our executive team succession planning
and processes were tested and proven
to be robust. This approach to succession
has allowed us to replace and reallocate
responsibilities quickly and seamlessly,
reacting to both planned and unplanned
changes. Steve’s appointment as Chief
Executive is an example of this in action.
The appointment was the culmination of
very careful discussion and preparation,
with particular emphasis on both Steve’s
development and our top talent over
a number of years. The Board is grateful
to Marc for his planning, enabling the
Nomination Committee to work carefully
and systematically on his succession. The
Committee assessed external and internal
candidates thoroughly and at the end of
what was an exceptionally rigorous process,
we were unanimously convinced Steve was
the best candidate.
The shape and composition of your Board
has changed signifi cantly over the year.
We now have fewer executive directors and
a more streamlined reporting structure.
We have strong, competent leaders running
our Business Units and our new structure
is simpler, more agile and refl ects the trust
we have in our teams to deliver.
BOARD CHANGES
In July, John Dixon, Executive Director of
General Merchandise, resigned and left
the business to pursue career opportunities
outside the Company. I would like to thank
John for his service over many years and
his many contributions to the success of
the business in that time.
In December, Andrew Fisher, the Chairman
of Shazam, one of the world’s leading digital
businesses, joined our Board as a non-
executive director. Andrew brings strong
digital, customer insight and international
experience with him. He has joined our
Nomination and Audit Committees, and
I would like to extend him a warm welcome.
Martha Lane Fox, who has served as a non-
executive director for nine years, stepped
down from the Board in April. Martha
brought the perspective and energy of
an entrepreneur to the role and made
a di erence to our business well beyond
her strong digital background. I would like
to thank her for her major contribution.
SHAREHOLDER RETURNS
Our dividend policy remains a progressive
one, with dividends broadly covered
twice by earnings. We intend to pay a fi nal
dividend of 11.9p, taking the total dividend
to 18.7p, up 3.9% on last year. In addition,
a special dividend of 4.6p will be paid at the
same time as the fi nal dividend.
LOOKING AHEAD
People and succession planning will
remain one of the Board’s three priorities,
alongside strategy and its execution,
and values. Much of our focus will be on
supporting Steve and his team as they
implement their plan to improve our
Clothing & Home performance and make
us a more profi table and valuable business
for our shareholders. M&S has evolved
signifi cantly since I joined as Chairman,
and there will be further changes ahead
as we strengthen our position as a modern,
profi table business rooted in fulfi lling the
needs of our customers in a digital world.
Finally, I would like to thank all our
employees for their hard work. I spend as
much time as possible with employees at
all levels in our o ces and stores all over
the country. I have always found our people
to be professional, positive and dedicated
to our customers. Wherever they work, they
show huge pride in working for this unique
business, and I would like to extend my
gratitude to every one of them. They are
what makes M&S genuinely special.
ROBERT SWANNELL CHAIRMAN
OUR GOVERNANCE PRINCIPLES
LEADERSHIP See p34
Board members rigorously challenge each other
on strategy, performance, responsibility and
accountability to ensure that the decisions we
make are of the highest quality.
EFFECTIVENESS See p39
The Board’s performance is scrutinised in an annual
e ectiveness review. This examines the progress
we are making against our plan, our collective and
individual e ectiveness, and the independence of
our non-executive directors.
ACCOUNTABILITY See p47
All of our decisions are discussed within the
context of the risks involved. E ective risk
management is central to us achieving our
strategic objectives.
ENGAGEMENT See p49
Maintaining strong relationships with our
shareholders, both private and institutional,
is crucial to achieving our aims. We hold
numerous events throughout the year to
maintain an open dialogue with investors.
See Governance Section p32-77
We con t in u e t o ke e p t he s t ru c t u re of ou r
reporting suite under review, in line with our
ambition to encourage more shareholders to
use digital communications and to therefore
reduce the number of documents we print.
In line with our simplifi ed management structure
and approach, we have updated how we report
on our performance, with a new combined
Operating Performance chapter that focuses
on our products and how we serve and engage
our customers.
The report focuses on ensuring key messages
are easy to locate, and addressing the factors
that have impacted the business during the
year and the factors that are most important
to the business’s long-term prospects.
We co n s i d e r t h i s r e p o r t to b e f a i r, b a l a n c e d
and understandable. It is a refl ection of how
we operate as a business and how the Board
has served its stakeholders.
We believe this practical approach is authentic,
meaningful, will support our performance for
the long-term and should protect the trust and
integrity of our values, and the M&S brand.
The Governance report provides:
> A clear and honest review of the year;
> The outcome of our Board Evaluation;
> Greater disclosure around Board discussions
and associated actions;
> Our approach to the assessment of the
long-term viability of the business; and
> Our approach to risk and risk appetite.
As a Board we regularly discuss and debate:
> Strategy and
Company
performance
> Culture and
behaviour
> Succession planning
> Ecommerce
> Cyber and IT
> The M&S brand
> International
> Supply chain
> Risk
> Property
> Plan A 2020
THIS YEAR’S REPORT – KEY FEATURES