The annual Board effectiveness review provides a useful opportunity for the Board to take a step back and reflect on their collective and individual effectiveness, consider where improvements can be made and chart progress. This year the Board evaluation was facilitated internally between January and March 2013, by our Group Secretary and Head of Corporate Governance, who has significant insight into both the day-to- day and strategic workings of the Board. This year’s internal evaluation follows two years in which an independent externally facilitated Board review has taken place.
How did we approach the Board and Committee Review?
In line with previous years, we took the view that a detailed and focused one-to-one discussion, conducted in person with each director was the most effective way to facilitate a constructive and meaningful conversation. The directors were asked their views on a range of subjects including:
- Board composition and the role of the Board
- Board leadership and culture
- Monitoring of Company performance
- Corporate governance
- The facilitation of the meetings particularly around scope of agendas, quality of papers, degree of challenge and debate.
The Senior Independent Director meets with the non-executive directors at least once a year to review the Chairman’s performance. The Senior Independent Director then provides feedback to the Chairman as appropriate.
How are we progressing?
It was clear from the Board review that good progress has been made against the actions the Board set itself last year:
- Continued to strengthen succession at both Board and senior management level. Ensured the Board is comprised of a diverse range of skills and experience, well positioned to challenge and develop the strategy. The appointment of Andy Halford to the Board as a non-executive director and the changes made to the executive team, including the appointment of Steve Rowe to the Board, have been key appointments;
- Engaged with senior management and high potential individuals throughout the year, facilitated through a series of lunches, strategy and investor days;
- Engaged institutional shareholders throughout the year. Our annual governance event held in June 2012 was well attended by both major shareholders and investor bodies. An investor event, addressing our international strategy, was held in Istanbul in February 2013 and was also well attended;
- Ensured director inductions continued to be full and thorough and offer the opportunity to dive into key parts of the business;
- Continued to drive an understanding of the Board’s risk tolerance and appetite;
- Made significant progress on planning the long-term framework for Board discussion, allowing more time for fuller, more challenging and strategic debate.
Action Plan 2013/14
The insights gathered from the Board review have highlighted some opportunities which have resulted in a clear action plan for the year ahead. The actions address the key areas of succession, Board oversight and reflection, risk management and information management.
During the year the Board is committed to:
- Continue our work on succession planning with greater focus on high potential individuals and their development in the business, especially below director level;
- Review how we can continue to benefit from the extensive and diverse experience of our non-executive directors;
- Allow for greater review and reflection on the quality of past decisions;
- Given our changing risk profile as we become a leading, international multi-channel retailer, ensure appropriate challenge and debate around risk and approach to risk;
- Board papers: continue to review our information management, content and balance of papers;
- Meetings: consider the balance and content of our agendas to allow greater time for open debate.
On joining the M&S Board a full, formal and tailored induction programme is arranged for directors including access to all parts of the business and an opportunity to meet major shareholders.
During the year we appointed Steve Rowe and Andy Halford to the Board. Steve was appointed Executive Director, Food having worked across a significant part of the business over a 23 year career at M&S. Steve’s induction was focused specifically on the Board process, including his duties, responsibilities and obligations as a director. Andy Halford’s appointment as a non-executive director and Chairman designate of the Audit Committee was tailored specifically around learning the business, its operations, its key markets and risks.