Corporate governance

• Safety, including actions to improve performance;
• Operations and modernisation;
• Discussing with Ofcom the new regulatory framework;
• Going Concern and cash management;
• Pensions funding;
• Post Office Limited separation;
• Restructuring plans; and
• Impact of the Bribery Act 2010.

Expected Board focus for the year 2012-13:

• Safety;
• Operations and modernisation;
• Growth & innovation;
• Balance sheet restructuring; and
• Pensions funding.

The Board is responsible for setting the objectives and strategy of the Group and for monitoring performance and risk
management. The Board is comprised of a Chairman, four Executive Directors and six Non Executive Directors.

The biographies of each of the Directors, setting out their current roles, commitments and previous experience, can be found in our Management & Committees section.  The Board met on seven occasions during the course of the year 2011-2012.

The Board has defined those matters that are reserved exclusively for its consideration. These include the approval of strategic plans, financial statements, acquisitions and disposals, major contracts, projects, and capital expenditure. It delegates responsibilities to the Board Committees.

For each scheduled meeting of the Board, the Company Secretary, on behalf of the Chairman, collates and circulates the papers, aiming to allow sufficient time for the Directors to review the information provided.

The Board is confident that all its members have the knowledge, talent and experience to perform the functions required of a Director of the business. Executive Directors have rolling 12 month contracts and Non Executive Directors are generally appointed for three-year terms.

The Board considers that each of the Non Executive Directors is independent. This means that in the view of the Board, they have no links to the Executive Directors and other managers, and no business or other relationship with the Company that could interfere with their judgement. There is also a clear division of responsibilities between the Chairman and the Chief Executive Officer.

The Chairman of each Committee reports to the Board on matters discussed at Committee meetings and highlights any significant issues requiring Board attention.

Performance evaluation of the Board, its Committees and individual Directors takes place on an annual basis with the support of the Company Secretary. This year's evaluation (2011-12) was conducted with the help of Rob Goffee of the London Business School, using a combination of questionnaires, interviews and a feedback session and was completed during May 2012.

A performance evaluation of the Audit & Risk Committee was conducted by the Chairman of the Committee last year. Other Committees are undertaking a review of their terms of reference.

Directors may take independent professional advice in the furtherance of their duties, at the Group’s expense. All Directors have access to the advice and services of the Company Secretary; the appointment and removal of whom is a matter for the Board as a whole.

All Directors appointed by the Board are required by the Company’s Articles of Association to be elected by the Shareholder at the first Annual General Meeting (AGM) after their appointment.

All Directors will be standing for annual re-election at this year’s AGM. On appointment, the Directors take part in an induction programme, in which they receive information about the Group, the role of the Board and matters reserved for its decision, the role of the principal Board Committees, the Group’s Corporate Governance arrangements and the latest financial information about the Group.

This is supplemented by visits to key business locations. The Group engages in two-way communication with the Shareholder to discuss information on its strategy, performance and policies. The Board receives feedback on these meetings from the Directors attending them.

Balance is considered a key requirement for the composition of the Board, not only in terms of the Executive and Non Executive Directors, but also with the regard to the mix of skills, experience and knowledge. Biographical details for all the Directors can be found in our Management & Committees section.

The Board believes that there are significant benefits to both the Group and the individual from Executive Directors accepting Non Executive Directorships of companies outside of the Group. The Board’s policy is normally to limit Executive Directors to one Non Executive Directorship, for which the Director may retain the fees.