john-lewis-partnership-plc-annual-report-2015

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86 John Lewis Partnership plc Annual Report and Accounts 2015 Our governance approach (continued) Who owns the Partnership? John Spedan Lewis, the founder of the Partnership, transferred his shareholding and the ownership of the Partnership into a trust to be held for the benefit of all Partners. John Lewis Partnership Trust Limited (the Trust Company) is the appointed Trustee of the Trust and is the ultimate holding company of the Partnership. More information about the Trust Company can be found on page 89, What is the role of the Constitution? The Constitution defines mechanisms which allow the Partnership to be run fairly and effectively, with checks and balances to ensure accountability, transparency and honesty. These mechanisms, which include a series of delegated authorities, also ensure that the views of Partners are heard. The Constitution defines three governing authorities: aa The Partnership Council Roles and responsibilities are set out on page 96 to 99 of the Partnership Council report aa The Chairman Roles and responsibilities are set out in this report aa The Partnership Board Roles and responsibilities are set out in this report The Chairman Partnership Council Provides governance and assurance to Entrusts management of the business to Delegates management authority to Partnership Board The Constitution established the representation of the co-owners on the Partnership Board through the election of Partners as Directors (Elected Directors) and it also determines the role of the Partners’ Counsellor. See pages 90 and 91 for more detail on their roles. The Constitution may be amended or cancelled by agreement between two thirds of the voting membership of the whole Partnership Council and the Chairman. How is corporate social responsibility (CSR) and sustainability governed? Our Director of Personnel, Tracey Killen, has principal responsibility for leading and co-ordinating sustainability in the Partnership. Operational management responsibility for sustainability is delegated from the Chairman to the Managing Directors of John Lewis and Waitrose, who in turn delegate responsibility to Management Board members within the divisions. Cross functional steering groups, such as the Partnership’s Environmental Steering Group and the Partnership and divisional CSR and Community Investment Committees, then focus on key cross-divisional issues. The governance of CSR is overseen by the Chairman’s Committee. The Partnership Board considers CSR issues as and when appropriate, but at least once a year. In 2014/15, the Chairman’s Committee reviewed the Partnership’s approach and results from the sustainability materiality assessment. The assessment process involved interviews with senior management across the Partnership, as well as our key stakeholders, to understand what matters most to them, the business and wider society. See page 6 for more information on the issues identified and visit www.johnlewispartnership.co.uk for information on the Partnership’s stakeholder engagement around these issues. In 2015/16, the Partnership will continue to strengthen the governance structure to ensure the appropriate management of material issues key to the Partnership’s sustainability.
Annual Report and Accounts 2015 John Lewis Partnership plc 87 The Chairman The Chairman Partnership Council Partnership Board What are the Chairman’s roles and responsibilities? The Chairman must ensure that the Partnership develops its distinctive character and democratic vitality. The Partnership Board delegates management of the Partnership’s business to the Chairman and he is ultimately responsible for the Partnership’s commercial performance. He is the Chairman of the Partnership Board, by virtue of his appointment as Chairman of the Trust Company. He is also responsible for the leadership of the Partnership Board and ensuring its effectiveness in all aspects of its role. The Chairman’s role and responsibilities are defined in the Constitution. How is the Chairman accountable within the Partnership? The Chairman is not only accountable to the Partnership Board, but also to the Partnership Council, in accordance with the Partnership’s Constitution. 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 Chairman attended five Partnership Council meetings during the year under review. How does the Chairman delegate his management authority? The Chairman delegates his management authority for the day-to-day management and development of the core businesses to the Divisional Managing Directors and the Partnership’s financial and personnel operations to the Group Finance Director and Director of Personnel respectively. What other bodies support the Chairman? The Chairman is supported in his executive role by the Chairman’s Committee, which comprises the Chairman and the Executive Directors of the Partnership. The Chairman’s Committee typically meets 17 – 18 times a year to develop strategy, business plans and budgets and to review major operational and management issues, financial results and forecasts, as well as plans for the development of the Partnership’s businesses. In addition to formal Partnership Board meetings, the Chairman maintains regular contact with all Directors through meetings of the Chairman’s Committee and through informal meetings with the Elected, Non- Executive and Executive Directors and the senior leadership group of Partners. Comply or explain? The Role of the Chairman Code principle A.2 states that there should be a clear division of responsibilities at the head of the Company between the running of the board and the executive responsibility for the running of the Company’s business, and that no one individual should have unfettered powers of decision. Code provision A.2.1 states that the roles of chairman and chief executive should not be exercised by the same individual, and a division of responsibilities between these roles should be clearly established and agreed upon by the board. This provision supports the Code principle that no one individual should have unfettered powers of decision. The Constitution applies this principle by means of a number of effective checks and balances on the powers of the Chairman. He is accountable separately to the Partnership Council and the Partnership Board and delegates part of his management authority as explained in this report. Additionally, the Partnership Counsellor and Elected Directors, whose roles are detailed on pages 90 to 91, are able to monitor at first hand how the business is being run, with the particular perspective of the Partners and the Constitution. 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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