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Remuneration Committee

The Remuneration Committee is chaired by David Barclay, a non-executive director and the Partnership’s Deputy Chairman. In addition to the chairman, the members are Jane Tozer, a nonexecutive director, and two of the five directors elected by the Partnership Council, chosen by that group, currently David Jones and Anne Buckley. The Committee is supported by the Director of Personnel, assisted by the Head of Reward, and an independent external remuneration consultant, Towers Watson (previously Towers Perrin), a representative of which attends its meetings in an advisory capacity. The Committee makes a recommendation each year to the Partnership Board on the Chairman’s pay and determines the pay of the Partnership Board’s appointed directors on the basis of appropriate market data and the recommendation of the Chairman. The Chairman makes a recommendation to the Partnership Board on the fees of the non-executive directors taking into account advice from Towers Watson, the independent consultancy. Members of the Committee take no part in its deliberations with regard to their own remuneration. The Committee also makes a recommendation to the Partnership Board on the broad policy for the remuneration of senior Partners, on the advice of the Director of Personnel, assisted by the Head of Reward.

The salaries of elected members of the Partnership Board are determined by their managers and do not include any element in recognition of their Partnership Board duties. With the exception of the non-executive directors, Partnership Board directors do not receive fees as they are all paid a salary for their respective roles within the business, in accordance with the Partnership’s pay policy. There are no annual incentive bonuses or long-term bonus schemes related to individual performance. Details of directors’ emoluments are set out in note 8.

Nomination Committee

As an outcome of the Board Evaluation process, the Board agreed to establish a Nominations Committee, which was empowered, among other things, regularly to review the performance of the Partnership Board and make recommendations to the Board with regard to any changes. The membership of the Committee will be comprised of the Chairman, two of the five elected directors chosen by that group, together with David Barclay and Jane Tozer, both non-executive directors.

Group Secretary

The Director of Legal Services and Company Secretary, supported by the Deputy Company Secretary, is responsible for advising the Board on all corporate governance matters, ensuring that Board procedures are followed, ensuring good information flow, facilitating induction programmes for directors and assisting with directors’ continuing professional development. All directors have access to the advice and services of the Director of Legal Services and Company Secretary and her deputy.

Treasury policy and financial risk management

The Board approves the group’s treasury and financial risk management policies, which are delegated to the Partnership’s Finance Director and Treasury team to implement and control. Further details of the group’s financial risk management arrangements are provided in the Business Review and note 23 to the financial statements.

Payments to suppliers

The Partnership’s policy on the payment of its suppliers is to agree terms of payment in advance and, provided a supplier fulfils the agreement, to pay promptly in accordance with those terms. The Partnership’s trade creditors at 30 January 2010 were equivalent to 22 days of average purchases (2009: 21 days).

Corporate Social Responsibility

The terms of the Partnership’s Constitution clearly define the behaviour expected towards customers, suppliers, the environment, the wider community and its Partners. Corporate Social Responsibility (CSR) programmes and governance structures have been developed from these provisions and the principal responsibility for managing and co-ordinating social, ethical and environmental issues resides with the Partnership’s Director of Personnel. In addition, the Partnership has a Responsible Business Group, a management committee which is chaired by the Chairman and comprises several members of senior management. Its purpose is to co-ordinate the Partnership’s CSR policy and strategy and to monitor and review performance. More detailed information on the Partnership’s CSR policies and procedures are set out in the Business Review, and copies of its published CSR reports can be found on the Partnership website, www.johnlewispartnership.co.uk.