76 John Lewis Partnership plc Annual Report and Accounts 2016 Our Governance model is different (continued)


We do not have a separate


Chairman and Chief Executive The Chairman and his role


and responsibilities Page 65 >


The Chairman is one of the three Governing Authorities as set out in the Constitution. The Constitution applies Code Principle A.2 by means of a number of checks and balances on the powers of the Chairman. He is accountable separately to the Partnership Council and to the Partnership Board, and delegates part of his management authority to the Divisional Managing Directors.


Additionally, the Partner’s Counsellor and Elected Directors, whose roles are detailed on pages 69 and 70, are able to monitor first-hand how the business is being run, with the particular perspective of Partners and the Constitution.


Code Principle A.2 states there should be a clear division of responsibilities at the head of the Company between the running of the board (the role of the chairman) and the executive responsibility for the running of the Company’s business (the role of the chief executive) and Code Provision A.2.1 states that these roles should not be exercised by the same individual. This supports the Code Principle that no one individual should have unfettered powers of decision.


We do not have a Senior Independent Director (SID)


The Partnership Board does not appoint a SID. The functions contemplated by this Code Provision are split across the responsibilities of Keith Williams as Deputy Chairman and Jane Burgess as Partners’ Counsellor.


The role of the Deputy Chairman and Partners’ Counsellor Page 69 >


The Deputy Chair of the Chairman’s Nominations Committee, who is a Non-Executive Director, oversaw the performance appraisal process for the Chairman. The appraisal process takes a number of factors into account, such as his performance as Chairman of the Partnership Board, as ‘guardian’ of the Constitution, and as leader of the Partnership’s Executive.


The process therefore draws on the views of other members of the Board both through the Board Evaluation and separate meetings between the Deputy Chairman and other members of the Partnership Board, the Partnership Council through the ‘holding to account sessions’, and the Partnership’s senior executives. In addition, the Chairman also provides the Committee with his own assessment of his performance.


This differs from Code Provisions A.1.2, A.4.1, A.4.2 and B.6.3 that one of the Non-Executive Directors is appointed as the SID to provide a sounding board for the Chairman, and to serve as an intermediary for the other Directors, lead the performance evaluation process for the Chairman and that this person is identified in the Annual Report and Accounts.


A majority of the Partnership Board are not


Non-Executive Directors More details on Board independence Page 70 >


The Partnership Board reflects the stakeholders of the Partnership and has the appropriate balance of skills, experience, independence and knowledge. As at 30 January 2016, the Partnership Board included three Non-Executive Directors. The Partners’ Counsellor and the five Elected Directors are neither Executive Directors nor Non-Executive Directors. However, they are not part of the executive, as they do not hold executive responsibilities, nor do they hold a Director’s service contract. As Partners, they are co-owners of the Partnership.


While they are not independent (as defined by Code Provision B.1.1), they approach Partnership Board decisions and proposals by the executive from their perspective as Partners and co-owners. While they must act in accordance with their statutory duties as Directors, through their Constitutional position they are also mindful of Partners’ best interests as a whole.


This Constitution differs from the Code, that does not contemplate co-owned businesses. Code Provision B.1.2 requires that at least half the Board, excluding the Chairman, should comprise Non-Executive Directors determined by the Board to be independent. This supports the Code Principle that the Board should have the appropriate balance of skills, experience, independence and knowledge.


Our Directors do not


retire by rotation More about rotation of Directors


Page 70 >


In accordance with the Articles of Association, all Directors appointed by the Partnership Board are subject to re-election by shareholders at the first Annual General Meeting following appointment. However, the Partnership does not operate a system whereby all Directors are subject to annual election or re-election at three-year intervals.


As detailed on page 64, if the Council judges that the Chairman has failed to fulfil (or is no longer a suitable person to fulfil) the responsibilities of his office, it may propose a Resolution upon the Constitution to dismiss the Chairman.


The Elected Directors are appointed or re-appointed in accordance with the democratic process, by a vote of the Partnership Council during each three-year term of the Council (as detailed on page 70).


The Chairman, as the senior executive in the Partnership, is ultimately responsible for its commercial performance, including being responsible for the performance of the Directors, and is accountable to the Partnership Council twice a year, rather than annually at an AGM. These meetings are also attended by Partnership Board Directors. In addition, the Divisions operate Councils which enable Partners to review Divisional performance, future strategy and the direction of the Division and to hold the Directors responsible.


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