1. Group Board
The board’s role is what management is doing, holding them accountable for performance against the targets and standards, probing and challenging their thinking to make sure that they are on the right track. The Board works closely with management in thinking through their direction and long-term plans, the opportunities, the risks and making sure we are developing the right management team for the future. The non-executives provide independent challenge and review, bringing wide experience, specific expertise and a fresh, objective perspective. As members of the Board Committees, they play a crucial role in undertaking detailed governance work with a particular focus on shareholders.
1. Overall Group strategy and corporate vision, setting standards and creating a high-performance culture which maximizes value creation and minimizes risk. 2. Creation, acquisition or disposal of corporate entities or assets which are material to the Group. 3. Evaluation of the Group’s competitive position and opportunities arising from the strategies and strengths of competitors. 4. Development and protection of the brand, its values and business principles. 5. Extension of the Group’s activities into new business or geographic areas
2. Nomination & Governance Committee
To ensure that appropriate procedures are in place for the nomination, selection, training and evaluation of directors and for succession plans, with due regard for the benefits of diversity on the Board, including gender.
Terms of Reference
1. To receive a bi-annual Company Chairman’s report on board structure, size, diversity (including gender), composition and succession needs, keeping under review the balance of membership between executive and non-executive and the required blend of skills, experience, knowledge and independence on the Board. 2. To ensure the Group’s governance facilitates efficient, effective and entrepreneurial management that can deliver shareholder value over the longer term. To review any departures from the UK Corporate Governance Code and explanations to shareholders as to how our actual practices are consistent with good governance.
3. To keep under review the leadership and succession needs of the organization with a view to ensuring the long term success of the Group. 4. To formally propose new executive and non-executive directors for the approval of the whole Board, following a formal, rigorous and transparent procedure for such an appointment. 5. To ensure that all directors undergo an appropriate induction program and to consider any training requirements for the Board as a whole. 6. To ensure that Board Committee membership is refreshed and that undue reliance is not placed on particular individuals when deciding chair/membership of committees.
3. Audit Committee
Monitors the integrity of the financial statements and reviews effectiveness of internal controls, risk management and audit.
The Committee assists the Board in fulfilling its oversight responsibilities. Its primary functions are: To monitor the integrity of the financial statements of the Company and any formal announcements relating to the Company’s financial performance, reviewing significant financial reporting judgments contained in them. To review the Company’s internal financial controls and the systems of internal control and risk management. To maintain an appropriate relationship with the Company’s auditors and to review the independence objectivity and effectiveness of the audit process, taking account of the relevant professional and regulatory requirements. To perform his or her role effectively, each Committee member will obtain an understanding of the detailed responsibilities of Committee membership as well as the Company’s business, operations and risk. The Committee can obtain its own independent professional advice as necessary.
1. To provide an open avenue of communication between the external auditors, the internal auditors and the Board, meeting separately with both at least annually without management. 2. To keep under review the scope and results of the audit and its cost effectiveness and to report periodically to the Board on significant findings. 3. To meet, as required, with the external auditors, the internal auditors and management in separate executive sessions to discuss any matters that the Committee or these groups believe should be discussed privately with the Audit Committee.
1. To recommend to the Board, for annual shareholder approval, the appointment, re-appointment and removal of the external auditors, and to lead the process of putting the external audit contract out to tender, if appropriate, at least every ten years. 2. To assess their qualifications, expertise, resources, effectiveness, independence and objectivity and to review the auditor’s quality control procedures and steps taken by the auditors to respond to changes in regulatory or other requirements. 3. To approve the terms of engagement and the remuneration to be paid to the external auditors in respect of audit services provided.
To review the nature and extent of non-audit work undertaken by the external auditors. In some cases the nature of advice may make it more timely and cost-effective to select them. They may also be appointed for consultancy work but only after rigorous checks to confirm they are the best provider including competitive tender and does not impair the external auditor’s independence. To confirm that the Committee approval process for non-audit fees has operated for the period under review. 4. To review with the Chief Finance Officer and the external auditors the scope and results of the external audit and any significant findings reported to the Committee in the management letter, receiving updates from management on action taken.
1. To ensure that the internal audit and risk department is adequately resourced and continues to have appropriate standing within the Company, and to keep under review its members’ independence and objectivity. 2. To review with the external auditors and Head of Internal Audit and Risk, the internal audit program and any significant findings, including fraud, illegal acts, deficiencies in internal control or similar issues and review management’s responsiveness to the auditors findings and recommendations. 3. To monitor and review the effectiveness of the internal audit and risk function.
4. Remuneration Committee
Recommends remuneration strategy and framework to recruit, retain and reward senior executives for their individual performance.
To recommend to the Board the senior remuneration strategy and framework, giving due regard to the financial and commercial health of the Company and to ensure the Chairman, Chief Executive , executive directors and senior management, (currently together comprising Reward Levels H and G) are fairly rewarded for their individual contributions to the Company’s overall performance.
Terms of Reference
1. To determine and agree with the Board, and taking such external advice as necessary, the appropriate policy for rewarding the Company’s Chairman, Chief Executive, executive directors and senior management. 2. To establish the selection criteria, selecting, appointing and setting terms of reference for any remuneration consultants who advise the Committee. 3. On behalf of the Board to prepare, and to place before shareholders at each annual general meeting, a report setting out the Company’s policy and disclosure on senior remuneration as required by the Directors’ Remuneration Report Regulations 2002 and other associated legislative or regulatory requirements.
4. To determine for each annual general meeting any aspect of remuneration policy should be brought to shareholders that requires their specific approval, eg share schemes, in addition to the remuneration report which will be submitted to shareholders annually for general approval. 5. To undertake appropriate discussions as necessary with institutional investors on policy or any other aspects of senior remuneration. 6. Annually to review and update its terms of reference, recommending any changes to the board and to evaluate its own membership and performance on a regular basis. * The remuneration of non-executive directors is determined by the Chairman and Chief Executive together with the executive directors.
5. Governance Group
Supports colleagues by providing governance support and oversight that is meaningful, relevant and focused on ensuring the business is doing the right things the right way both in the UK and overseas. The Governance Group engages across the business and comprises legal, audit and risk, insurance, archive, pensions, employee representative and secretariat, reporting on its activities regularly to the Board in the Group Secretary’s report.
Giving guidance to colleagues on doing the right thing, the right way including ethics’ code: 1. Implementing practical and cost-effective responses to legislation and regulation. 2. Reviewing and making our policies and practices more accessible. 3. Minimizing trading disruption and legislative consequences. 4. Leveraging business initiatives and sharing best practice. 5. Negotiating contractual terms and protecting our brands and innovation. 6. Providing assurance on internal controls and visibility of key risks. 7. Minimizing insurance premiums, claims and fines.
8. Protecting and promoting our brand heritage.
9. Enabling the Company to meet its pension liabilities.
10. Assisting employee and shareholder engagement.
11. Supporting directors in their Board and Committee roles.
6. Executive Board
Accountable for running the business, making sure we are doing the right thing day-to-day and delivering the Group’s strategy. It allocates capital and controls all non-property investments with a risk of material impact on financial results, brand or strategy. It keeps the Board regularly informed about the business and how we work with our different stakeholders. Its work is supported by a number of operational committees and functions. The EB exists to run the business and deliver the Group’s strategy as approved by the Group plc (public limited company) Board: To develop and review strategic opportunities and initiatives for the Group; to evaluate the Group’s competitive position and determine strategies to protect M&S, its sub-brands, values and business principles and to consider the impact on key stakeholders; To manage the day to day business, responding to market conditions and trends with appropriate plans for pricing and promotions;
To agree and deliver the Group’s financial and operational plans and forecasts; and to deliver these plans and monitor performance against the Group plan, financial forecasts and quarterly revisions; To act as the authorizing Board for all non-property expenditure (including non-retail property investments e.g. warehousing) subject to the authority set out below. To recommend to the Group Board all expenditure in excess of this authority; To regularly monitor performance against pre-determined criteria to ensure non-property investments deliver required returns; To monitor the Group’s business processes systems and controls; To identify, evaluate, monitor and manage the Group’s risks (including financial, commercial, information security, HWDB, ethics and compliance, business continuity, fire, health and safety) to enhance the Group’s performance and its assets;
To review leadership development and succession across the Group; to review HR strategy, including reward framework, employee bonus (excluding those determined by the Remuneration Committee), conditions of employment and pension schemes and people matters; To drive overall Group performance through setting and tracking their own clear objectives which are cascaded throughout the Group and changing ways of working; To review and update annually its terms of reference, recommending any changes to the Group Board and to evaluate its own membership and performance on a regular basis.
7. Management Committee
To monitor the development of the Group’s work streams against the Group’s three year plan and to safeguard cross-functional co-operation of the work streams: to input to the Group’s strategic plan on an annual basis ; to cascade the relevant information to the business ; members of the management committee may be asked to present updates to the management committee to keep everyone informed
8. Property Board
The property board ensures capital expenditure is allocated to the Group’s UK and International property portfolio (including Retail Property, Head Office Buildings and Core Investment) in line with the Group’s strategic goals and business priorities, whilst also ensuring maximum flexibility: To recommend to the Executive/Group Board the allocation of the property capital expenditure plan and the relevant investment policies on a three year cycle. To approve and control all UK property expenditure (including Retail Property, Head Office Buildings and Core Investment), projects, and programs on a three year cycle, within delegated authority limits from the Group Board.
To approve all International property expenditure (including Retail Property, Head Office Buildings and Core Investment) relating to joint ventures and wholly owned subsidiaries within delegated authority limits from the Group Board. To regularly monitor performance of all UK and International stores against pre-determined criteria to ensure property investments deliver required returns. To identify, evaluate and manage risks relating to property investment expenditure. To review and update annually its terms of reference, recommending any changes to the Executive Board and Group Board and to evaluate its own membership and performance on a regular basis.
9. Customer Insight Unit
Influences decision-making by tracking marketplace trends, our customer barometer and customer views. The customer insight unit ensures customers to gain a real understanding of what they want, what they think and how they behave. The customer insight unit is vital in ensuring that our customers’ needs are recognized in any decision taken by the business.
10. How We Do Business Committee
To ensure that ‘How we do business’ is an integral part of the business and the way it operates.
Terms of Reference
Its primary function is to oversee implementation of Plan A, the Company’s ‘eco plan’ launched in January 2007 which sets out 100 commitments across the challenges of Climate change, Waste, Sustainable raw materials, Fair partner and Health:
1. To provide leadership on HWDB across the business.
2. To ensure all parts of the business:
• Have assigned clear roles and responsibilities for delivering Plan A • Have a resourced project plan for delivering all aspects of Plan A • Report on progress in implementing Plan A on a regular basis • Have robust data and evidence to support progress claims • Gain the external assurance levels agreed by the Audit Committee • Benchmark themselves against their competitors
• Understand stakeholder expectations on HWDB issues (customers, employees, shareholders, opinion formers) • Have the resources and skills to implement the plan
• Are maximizing the communication potential of the issues they are managing. 3. To seek external stakeholder views on our overall performance and maintain an overview of external benchmarking and commentary on our performance. 4. To oversee any internal and external auditing of our performance. 5. To oversee external reporting on our performance and progress against our Plan A targets. 6. To provide the Board with an overview of the social, environmental and ethical impacts of the Group’s activities and how they are being managed. 7. To review and update annually its terms of reference, recommending any changes to the Board and to evaluate its own membership and performance on a regular basis.
11. Business Involvement Groups
Every store and every business area has BIG representatives, elected by their colleagues to represent their views. Through the business involvement group network, the business informs, involves and consults employees so their views can be influence business change and decision-making. Commitment to BIG means that M&S colleagues have the chance to voice their opinions and ideas, get answers and have their views represented when the business considers changes that affect them. This means they all have an opportunity to positively influence the business they are work in.
12. Fire, Health, and Safety Committee
Promotes the safety and well being of our employees, customers and visitors and minimizes the risk of financial penalties. 13. Business Continuity Committee
The Committee will keep under review the effective management of business continuity across the Marks & Spencer Group with the objective being to galvanize the development and maintenance of effective means to continue business in the event of a significant interruption to business. It will provide leadership on BC policy across the Group and will ensure that the Policy is integrated into every aspect of the Group’s critical operations around the world.