Corporate governance
Overview

Leadership and governance go hand in hand in a successful company. For both to work well you need a clear plan of what you want to achieve. There are different ways to secure good governance:

• what you achieve in practice is as important as the formal structures;
• a strong relationship between management and the Board is important, with trust, challenge, a common goal and good information flows between them; and
• it's not just about the Board – it's about how governance is understood and acted on throughout the business – 'from the boardroom to the shop floor'.

“We have one of the most trusted brands on the high street. We need a clear plan, inspired leaders and motivated employees, all focused on giving customers what they want at M&S.” Sir Stuart Rose, Chairman

We recognise that our current Board structure is out of line with the Combined Code in that Sir Stuart Rose combines the roles of Chairman and Chief Executive. We understand the concerns of our shareholders but believe that we still can – and do – maintain robust governance while at the same time benefiting from having Stuart at the helm.

“As Deputy Chairman I lead on governance; together with Stuart and our Board colleagues, we are guardians of the M&S brand.” Sir David Michels, Deputy Chairman

As long as we have robust governance and make sure that appropriate challenge to the executive is in place, we believe the right balance can be maintained.

This report sets out how we achieve this and how M&S governance adds value to the business.

For M&S, governance is about making sure that:

• we are taking the business in the right strategic direction;
• the executives are leading and managing effectively and are accountable;
• the Group has appropriate controls in place and our risks are managed; and
• we are 'doing the right thing' for our shareholders and our wider stakeholders.

The independent non-executive directors, led by the Deputy Chairman, keep M&S governance under review to ensure that appropriate safeguards are in place to protect shareholder interests.

We believe that good governance has four fundamental components:

• leadership – clear and well-communicated;
• challenge – focused and effective;
• oversight – active and comprehensive; and
• questioning – rigorous and sustained.

To achieve this the Board needs to:

• demonstrate independence to bring fresh perspectives and hold management to account;
• seek full information to form views, question management and take strategic decisions; and
• act responsibly to make sure our governance is robust and we protect the reputation of M&S in everything we do.