John Lewis Partnership plc annual report and accounts 2013

The Three Governing Authorities The Partnership Council

 Unique to the Partnership, the Partnership Council represents Partners as a whole and reflects their opinion. It is the voice for ensuring that the business is run for and on behalf of Partners. It shares responsibility for the health of the Partnership entrusts management of the Partnership to the Partnership Board and holds the Chairman to account.

The Partnership Council met four times during the year and held one conference. All directors, including the non-executive directors, are non-voting members of the Partnership Council and attend its meetings. It has 64 elected Partners as members. The Chairman also appoints three non-elected members. It makes recommendations on the development of policy and can make recommendations to the Chairman on any subject. It may ask the Partnership Board or the Chairman anything it wishes, and they must answer unless doing so would in their opinion damage the Partnership’s interests.

Elections to the Partnership Council are held every three years and any Partner may stand for election, to represent the Constituency in which he or she works. Elections were held during the year under review and 23 members were re-appointed and 41 new members were appointed to the Council. All were elected for a three year term.

The Partnership Council holds the Chairman to account for running the business in line with Partnership principles and in particular Principle 1. The Partnership Council delegates its work for holding Divisional Managing Directors responsible for delivery of divisional business plans to the John Lewis andWaitrose Divisional Councils and Partnership Services and Corporate Forums. Any concerns arising fromDivisional Councils are escalated to the Partnership Council to the Chairman, who also holds the Divisional Managing Directors to account. The Partnership Council’s democratic function at local level is conducted within Local Forums which are also democratically elected.

During its term the Partnership Council elects one Partner to be its President and three Partners to be Trustees of the Constitution. The Partnership Council also elects five Partners to be members of the Partnership Board, known as elected directors.

The Partnership Board

 The Partnership Council entrusts management of the Partnership to the Partnership Board. The Partnership Board has ultimate responsibility for issues of major policy and strategy and for allocating the financial and other resources of the business. The Partnership Board is also responsible for reviewing the effectiveness of the Partnership’s internal controls, including risk management systems, and for determining the nature and extent of the risk it is willing to take in achieving its strategic objectives. It is responsible for the overall management and performance of the Partnership and operates within a framework of prudent and effective controls which enable risk to be assessed and managed. It is collectively responsible for the success of the Company and operates within a framework of reserved matters, delegations and assurance.

Senior executives attend Partnership Board and Committee meetings as appropriate to support proposals on policy setting, investments and the results and strategies of their divisions. Partnership Board members are given relevant and timely documentation in advance of each Partnership Board and Committee meeting.

During the year, the Partnership Board undertook an externally facilitated evaluation of its own effectiveness. The review recognised the diverse skills, experience and perspectives of the directors and the spirit of the Partnership Board. It confirmed that the elected directors are fundamental to the Partnership Board and fulfil their role with commitment and distinction, providing valuable contributions to boardroom debate. The review also identified that the addition of non-executive directors had injected a higher degree of challenge. Following the review the Partnership Board has sought to further clarify its purpose, by concisely defining its role, formally recognising the concept of the “critical friend” at its meetings, and by introducing software to improve the Partnership Board’s access to information. Board Intelligence, who facilitated the review, has no other connection with the Partnership. This year’s evaluation will focus on the Partnership Board’s Committees including a review of their respective terms of reference.

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