Page 32


Directors’ report

continued

Board meeting and Committee attendance during the year (continued)

through meetings of the Group Executive Committee and informal meetings with the elected, non-executive and executive Board members.

The Board has approved a procedure for directors to take independent professional advice, if necessary, at the Partnership’s expense. No such advice was sought by any director during the year.

Corporate governance

The ultimate purpose of the John Lewis Partnership is defined in its constitution – “the happiness of all its members through their worthwhile and satisfying employment in a successful business”. Its Principles and Rules encourage the widest possible sharing of profit, knowledge and power by all Partners and also set out the business’s responsibilities to its suppliers, its customers and the community in which it operates.

The co-ownership character of the Partnership is reflected in the respective roles and responsibilities of its three governing authorities, as established by the constitution: the Board of John Lewis Partnership plc (the Partnership Board), the elected Partnership Council and the Chairman.

In addition to compliance with the system of governance and accountabilities established by its own written constitution, the Partnership aims to apply the highest standards of corporate governance and, although not obliged to do so, seeks to conform with the Code of Best Practice set out in section 1 of the June 2008 Financial Reporting Council Combined Code on Corporate Governance in a manner framed to suit its democratic ownership structure. Further explanation of how the Code’s principles have been applied is set out below.

Employees

The constitution of the John Lewis Partnership provides for the democratic involvement of employees, known as Partners, as ‘co-owners’ of the business. They are therefore provided with full information on all aspects of the business operations and are encouraged to have an active interest in promoting its commercial success. Elected councils and forums at all levels of the business provide regular opportunities for management to report to Partners. This provides opportunities to question management on any subject, while an open system of journalism both contributes to effective accountability and provides a means of sharing information extensively with all Partners. Partners also share in the profits of the business through Partnership bonus.

All employees can benefit from the Partnership’s training and development policies. The Partnership recruits people with disabilities to suitable vacancies on merit. Where disability occurs during the period of employment, every effort is made to continue to provide suitable employment with the provision of appropriate training.

Internal control

The directors have ultimate responsibility for the Partnership’s systems of internal control, and also for reviewing its effectiveness. In recognition of that responsibility, the directors set policies and seek regular assurance that the system of internal control is operating effectively. Strategic, commercial, operational, financial and health and safety risk areas are all included within the scope of these activities.

The system of internal control is designed to manage, rather than eliminate, the risk of failure to achieve business objectives. In pursuing these objectives, internal control can only provide reasonable, and not absolute, assurance against material misstatement or loss. The directors have reviewed the effectiveness of the Partnership’s systems of internal control for the accounting period covered by this report.

Board effectiveness

The company substantially applies the principles of the Combined Code, with the principal exception of provision A.2.1 of the code.

The combination of the roles of Chairman and Chief Executive Officer reflects the nature of the Chairman’s role under the terms of the Partnership’s Constitution. The Chairman’s responsibilities are clearly defined under the Partnership’s governance structure and include responsibility for retaining the distinctive character and democratic vitality of the Partnership, the (Continued on page 33)
Page 1  |  Page 2  |  Page 3  |  Page 4  |  Page 5  |  Page 6  |  Page 7  |  Page 8  |  Page 9  |  Page 10  |  Page 11  |  Page 12  |  Page 13  |  Page 14  |  Page 15  |  Page 16  |  Page 17  |  Page 18  |  Page 19  |  Page 20  |  Page 21  |  Page 22  |  Page 23  |  Page 24  |  Page 25  |  Page 26  |  Page 27  |  Page 28  |  Page 29  |  Page 30  |  Page 31  |  Page 32  |  Page 33  |  Page 34  |  Page 35  |  Page 36  |  Page 37  |  Page 38  |  Page 39  |  Page 40  |  Page 41  |  Page 42  |  Page 43  |  Page 44  |  Page 45  |  Page 46  |  Page 47  |  Page 48  |  Page 49  |  Page 50  |  Page 51  |  Page 52  |  Page 53  |  Page 54  |  Page 55  |  Page 56  |  Page 57  |  Page 58  |  Page 59  |  Page 60  |  Page 61  |  Page 62  |  Page 63  |  Page 64  |  Page 65  |  Page 66  |  Page 67  |  Page 68  |  Page 69  |  Page 70  |  Page 71  |  Page 72  |  Page 73  |  Page 74  |  Page 75  |  Page 76  |  Page 77  |  Page 78  |  Page 79  |  Page 80  |  Page 81  |  Page 82  |  Page 83  |  Page 84