Government of Jersey

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A decision made (18/02/2008) regarding: Jersey Post - Amendment of Articles of Association.

Decision Reference: MD-TR-2008-0019
Decision Summary Title:	Jersey Post – Amendment of Articles of Association		Date of Decision Summary:	11 February 2008
Decision Summary Author:	George Butler – Strategic Investments Manger		Decision Summary: Public or Exempt?	Public
Type of Report: Oral or Written?	Written		Person Giving Oral Report:	George Butler – Strategic Investments Manger
Written Report Title:	Jersey Post – Amendment of Articles of Association		Date of Written Report:	11 February 2008
Written Report Author:	George Butler – Strategic Investments Manger		Written Report : Public or Exempt?	Public
Subject: Amendment of the Articles of Association of Jersey Post International Limited in respect of the appointment of Non-executive Directors.
Decision(s): The Minister agreed to amend the Articles of Association of Jersey Post International Limited so that theyrequire the appointment and re-election of Non-executive Directors on a rotational basis.
Reason(s) for Decision: The existing Articles of Association contain no requirement for Non-executive Directors to retire on a rotational basis. Best practice, the Combined Code on Corporate Governance – Issued by the UK Financial Reporting Council, recommends that all Non-executive Directors be required to retire and be re-elected or replaced on a rotational basis.
Resource Implications: This decision has no resource implications.
Action required: The Treasurer and Strategic Investments Manager are directed to sign the attached special resolution authorising the amendment of the Jersey Post International Limited Articles of Association.
Signature:		Position: Senator T A Le Sueur, Minister for Treasury and Resources
Date Signed: 18th February 2008		Date of Decision: 18th February 2008

Jersey Post - Amendment of Articles of Association.

Jersey Post International Limited

amendment to articles of association

Purpose of the report

The Minister is asked to approve the amendment of the Articles of Association of Jersey Post International Limited (JPIL) so that they require the retirement and re-election of Non-executive Directors on a rotational basis.

Background

Jersey Post recently undertook an audit of the Company’s compliance with the Combined Code on Corporate Governance. The review highlighted that the Company’s existing Articles of Association contained no requirement for the retirement and re-election of Non-executive Directors on a rotational basis.
Best practice, the Combined Code on Corporate Governance – Issued by the UK Financial Reporting Council (FRC), recommends that all Non-executive Directors be required to retire and be re-elected or replaced on a rotational basis. Accordingly the Minister is asked to amend the Articles of Association of JPIL to incorporate this requirement.

Comments

The FRC is the United Kingdom's independent regulator responsible for promoting confidence in corporate reporting and governance. The Combined Code on Corporate Governance sets out standards of good practice in relation to issues such as board composition and development, remuneration, accountability and audit and relations with shareholders.
All companies incorporated in the UK and listed on the main market of the London Stock Exchange are required under the listing rules to report on how they have applied the Combined Code in their annual report and accounts. Whilst JPIL is not a listed company the Minister’s Memorandum of Understanding (MoU) with the Board of JPIL requires:

“Unless in direct conflict with other provisions of the MoU or its Memorandum and Articles of Association, JPIL and its Board will adhere to the Principles of Good Governance and the Code of Practice which comprise the Combined Code.”

The Combined Code states that:

“Non-executive directors should be appointed for specified terms subject to

re-election… at intervals of no more than three years.”

The new articles are based on best practice and have been reviewed by Jersey Post’s Head of Legal & Compliance. Under the new articles one Non-executive director will retire by rotation at each Annual General Meeting. The Company currently has four non-executive directors, taking into account natural turnover, it is expected each non-executive director will serve between two and four years before retirement by rotation.

Recommendation

That the Minister approves the amendment of the Articles of Association of Jersey Post International Limited so they require the retirement and re-election or replacement of Non-executive Directors on a rotational basis.

Reason for Decision

The existing Articles of Association of Jersey Post International Limited contain no requirement for Non-executive Directors to retire on a rotational basis. Best practice, the Combined Code on Corporate Governance – Issued by the UK Financial Reporting Board, recommends that all Non-executive Directors be required to retire and be re-elected or replaced on a rotational basis.

States Treasury Corporate Finance

15 February, 2008 for Decision Meeting 18/02/2008