John Lewis Partnership plc annual report and accounts 2013

Governance Report continued

Partnership Board. Together they bring external independent and objective judgment to the Partnership Board.

David Anderson and Baroness Hogg were appointed for an initial term of three years and David Barclay has served for six years and is in his third term of office. The letters of appointment of the non-executive directors are available on request from the Director of Legal Services and Company Secretary.

The non-executive directors have met together without the executive directors as required by the Code, led by the Deputy Chairman, as have the elected directors.

The Partnership Board reviews the interests of all non-executive directors annually and has determined that David Barclay, David Anderson and Baroness Hogg continue to be independent of the management of the Partnership and have no cross-directorships or significant links which adversely interfere with the exercise of their independent judgment.

Non-executive directors are not Partners and are not afforded voting rights in relation to Board decisions. Non-executive directors are not eligible to receive Partnership Bonus or other benefits, and are not members of the Partnership’s pension schemes.

Senior independent director

 Code Provision A.4.1 recommends a single individual be appointed as senior non-executive director. The role of senior non-executive director for the Partnership Board is split between the Deputy Chairman, David Barclay, and the Partners’ Counsellor, Jane Burgess. The Deputy Chairman acts as a sounding board for the Chairman, an intermediary for the other directors where necessary and leads the Chairman’s performance evaluation as required by Code Provisions A.4.1, A.4.2 and B.6.3. The Partners’ Counsellor holds a unique position under the terms of the Constitution. She has specific duties in relation to Partners’ interests and must be alert to anything which might reasonably impact Partners. The relationship between the Partners’ Counsellor and Partners goes beyond the senior independent director role contemplated by the Code in relation to shareholders.

Board independence

 The Partnership Board has determined that the unique composition of the Board provides a balanced board, appropriate to the Partnership’s unique Constitution, which is able to provide an independent and objective review of executive decisions, as required by Code Provision B.1.2. Together elected directors and non-executive directors form a majority of the Partnership Board.

Retirement by rotation

The Company does not operate a system of retirement by rotation or annual election by shareholders, as required by Code Provision B.7.1. The Partnership Board considers that a rigorous process of accountability exists to ensure compliance with the Partnership’s Constitution especially Principle 1. The Constitution’s governance mechanisms provide opportunities throughout the year to review and scrutinise the efficacy of each director.

Conflicts of interest

The Partnership Board has maintained procedures whereby potential conflicts of interest are reviewed regularly. All directors are required to declare pertinent interests and absent themselves from any discussion that might give rise to a conflict of interest.

At no time during the year did any director hold a material interest in any contract of significance with the Company or any of its subsidiary undertakings, other than a third- party indemnity between each director and the Company, service contracts between each executive director and the Company, and terms and conditions of employment between each elected director and the Company.

The Partnership Board has considered the other appointments held by directors, details of which are contained in their biographies on pages 30 to 31. The Partnership Board considers that the Chairman and each director is able to devote sufficient time to fulfil the duties required of them under the terms of their contracts or letters of appointment.

Directors’ and officers liability insurance

The Company has purchased and maintained throughout the year Directors’ and Officers liability insurance in respect of itself and its directors.

40