John Lewis Partnership plc Annual Report and Accounts 2014
51 OUR GOVERNANCE APPROACH
“ The Constitution of the John Lewis Partnership was created to establish a business that is co-owned by its employees, the Partners.”
Sir Charlie Mayfield, Chairman, John Lewis Partnership
The Constitution is available to all Partners on the Partner intranet and to other interested parties on
www.johnlewispartnership.co.uk.
Why is our governance
approach different? The Partnership exists today because of the extraordinary vision and ideals of our Founder, John Spedan Lewis.
From the very beginning, the Partnership has sought to safeguard its governance and accountability practices to protect the democratic principle of co-ownership including democracy and Partner representation.
The Partnership Board believes that the structures provided by the Partnership’s written Constitution offer the necessary level of assurance for Partners as co-owners of the business.
How is the John Lewis
Partnership governed? We are governed by our written Constitution, which provides a framework establishing the Partnership’s principles and the way in which it should operate. Although the Constitution has been revised and refreshed over the years, it retains a direct connection with the fundamental principles established in 1929. At the heart of the Constitution, Principle 1 sets out the Partnership’s ultimate purpose.
Full details of Principle 1 can be found on page 12 in Our Partnership model. This compelling statement on the responsibility of co-ownership is what differentiates the Partnership from other corporate bodies. Eighty-five years after these words were first written, we adhere to the same philosophy.
Which other regulations
are applicable? In addition to the Constitution, the Partnership is governed by its Articles of Association. It also complies with the Companies Act, Listing Rules and Disclosure and Transparency Rules applicable to a Standard Listed company on the London Stock Exchange (LSE).
If the Partnership is a co-owned business, why is it listed on the
London Stock Exchange (LSE)? Both the Partnership and its immediate subsidiary, John Lewis plc, have Standard Listings on the LSE. Many years ago, both companies issued Cumulative Preference Stocks. This is a form of share with a right to receive fixed rate of dividend payment per annum, which cumulates if not paid annually. It has to be paid before any dividend to ordinary shareholders. However, they carry no rights of ownership of the Partnership and nor do they carry any voting rights, unless the annual payment is in arrears. The Cumulative Preference Stocks are treated in the balance sheet as a long-term liability of the business and not as equity share capital. Further details are provided on page 101.
Comply or explain
Throughout the year ended 25 January 2014, the Partnership has voluntarily sought to apply the principles of the Code, published by the Financial Reporting Council (FRC) and available to view at
www.frc.org, and complied with its provisions except in the areas highlighted in the report with the icon above.
The Partnership’s Constitution and co-ownership model establishes a governance structure that is different from that of other listed companies. Therefore, the Partnership does not comply strictly with certain detailed provisions of the Code.
The Partnership’s actual practices and governance mechanisms are explained in this report. The Partnership Board believes that the Partnership’s practices are consistent with each of the Code’s principles, are appropriate, and offer the necessary level of protection to Partners and other stakeholders.
THE JOHN LEWIS PARTNERSHIP
OUR PERFORMANCE
GOVERNANCE
FINANCIAL STATEMENTS
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