Annual Report and Accounts 2015
John Lewis Partnership plc
93
Overall, the Board evaluation concluded that the Board continued to develop its operating effectiveness to meet the risks and challenges facing the business and particularly welcomed the more strategic focus encouraged under the Chairman’s leadership. The initial results were reported to the Board at its meeting in January 2015, and the new General Counsel and Company Secretary is reviewing the main themes arising from the evaluation. He will make recommendations to the Board during the course of the year.
Independent professional advice
All Directors of the Partnership Board have unrestricted access to the General Counsel and Company Secretary and to other executives within the Partnership, on any matter of concern to them in relation to their duties. The Partnership has undertaken to reimburse legal fees to the Directors if circumstances should arise in which it is necessary for them to seek separate, independent legal advice in order for them to carry out their duties effectively. Should the Elected Directors ever consider it necessary to seek independent legal advice, they can rely on the Partners’ Counsellor to provide the budget.
General Counsel and Company Secretary
The General Counsel and Company Secretary is responsible for advising the Partnership Board on all corporate governance matters, ensuring that Board procedures are followed and that there is a good flow of information, facilitating induction programmes for new Directors and assisting with Directors’ continuing professional development. Following the retirement of Margaret Casely-Hayford as Director of Legal Services and Company Secretary with effect from 31 July 2014, Alan Buchanan was appointed as Interim Director of Legal Services and Company Secretary with effect from 31 July 2014. Subsequently, Keith Hubber was appointed General Counsel and Company Secretary with effect from 1 February 2015.
Sharing knowledge and relations with Partners
The Code requires that boards should ‘maintain a dialogue with shareholders based on mutual understanding and objectives’.
The Partnership Board is committed to regular dialogue with Partners, as co-owners of the Partnership and in accordance with Principle 1. Partners are updated weekly on the performance of the Partnership through the Gazette magazine, other journalism and the Partner Intranet. There is a regular flow of information at all levels of the business through meetings held by elected councils and local forums and an open system of journalism operated through the Gazette, which also enables Partners to submit questions to management on any subject. Questions are answered within 21 working days. The Gazette is published weekly and made available to all Partners.
During Council and forum meetings and through the Gazette, the Executive Directors are able to share the Partnership’s objectives and discuss performance against those objectives. Elected Directors also attend Partnership Council meetings. Each of these information-sharing opportunities, as described above, enables all Directors to develop an understanding of Partners’ views and to act upon them.
Through our website, we share information with external investors on the financial performance of the Partnership and where practical to do so, invite representatives of the investor community to attend our trading updates in person. This gives an opportunity for the investor community to hear from, and engage with, the Partnership’s senior management.
Annual General Meeting (AGM)
The Partnership’s AGM is held and conducted in accordance with the Companies Act and the Company’s Articles of Association. Representatives of the Trust Company and the Directors of the Partnership are entitled to attend the AGM. Voting is conducted by way of a show of hands, unless a poll is demanded.
Comply or explain? Retirement by rotation
Code Provision B.7.1 states that all Directors of FTSE 350 companies should be subject to annual election by shareholders. As the Partnership is not a FTSE 350 company this provision does not apply.
Code Provision B.7.1 further requires that all other Directors should be subject to election by shareholders at their first annual general meeting, followed by re-election at intervals of no more than three years.
In accordance with the Articles of Association, all Directors appointed by the Partnership Board are eligible for re-election by shareholders at the first Annual General Meeting following appointment. However, the Partnership does not operate a system of annual election or re-election at three-year intervals.
As detailed on page 87 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 99).
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 two times 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 to account in their areas of responsibility.
The Partnership has voluntarily adopted the UK Corporate Governance Code on a comply or explain basis. For more information: Go to page 84,
Introduction
Partnership difference
Principles
Strategy
Performance
Governance
Financial statements
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