Governance? As if

The Inquiry's governance experts second report and what it tells us. A long post but with some shorter sections at the beginning and end for those who do not want the detail.

Image by Henryk Niestrój from Pixabay

The second report from Dame Sandra Dawson and Dr Katy Steward makes interesting reading on how the Inquiry’s governance experts see the Post Office Scandal (transcripts and reports here).

It has a bit of savaged by a librarian tone to it. Jason Beer KC tried and largely failed, with two particular exceptions, to get them to say which of the many governance failures they set out were serious. But as any academic knows,* if the librarians are criticising you, it’s time to listen.

It is also worth noting they deliberately do not attribute motive to people. They simply record departures from reasonably expected standards of governance. Of particular interest to some readers, they also record their view on the obligations around the governance of the General Counsel role.

A nicer way of putting the librarian point is their views may appear both understated, carefully limited to the nature of their own expertise, and quietly devasting in their way.

They report on standards of governance, management and leadership by reference to three case studies. The consideration of Mrs Wolstenholme’s case by POL in 2004 (a piece of civil litigation where the Post Office settled rather than risking losing because of adverse expert evidence from Jason Coyne); the consideration of Second Sight’s Interim Report in 2013 and the handling of Simon Clarke’s advice (two parallel and related streams of work in the Summer of 2013).

The handling of the Bates litigation and the shredding advice, to give two examples, are omitted, as is the handling of the Swift Review.

Tl;dr: As I understand their view, Paula Vennells the CEO failed; Alice Perkins the Chair failed; various GCs failed; the PO Board failed including in particular the NEDs, and Royal Mail Group’s (RMG) Board and one of their GCs failed too. Governance was substandard. RMGs failures to understand its responsibilities for PO prosecutions (whilst it was the holding company and managed the legal team) were serious (p. 65 of transcript of the first day of their evidence). And the failures to alert the Board of the serious issues being raised in Second Sight’s report were also regarded as serious by them (p. 80 of the same transcript).

I will return briefly to what such a consistent picture of failure may tell us at the end.

Dawson and Steward concentrate on a limited evidence base for each example (to make their task manageable in the time available).

Their views are not necessarily going to be the same as the Inquiry’s (for instance there is a sense in which they seem to say Paula Vennnels did not understand the risks she was being advised on and the Inquiry might form the view she did in fact understand). If so this would put an (even) more serious gloss on Vennells’ apparent failures, but that is pure speculation on my part.

I will set out a slightly more detailed view of the adverse findings in the next few paragraphs. Then, I will summarise those for the aficionados in greater detail. For those who do not have the time for that, I encourage you to jump to the final section, which I am calling, in a “swoon of originality”** the final section. There is also a section before that on how they see the CEO-GC-Chair relationship which may interest the in-house lawyers in particular.

An overview of their main findings

On Horizon failures and prosecution problems, risk reporting to the Board by the general counsel, CEO, and others was inadequate (para. 28). Even so, the Board failed to challenge the executive approach as they should have given they had sufficient information to alert them to significant risks (para. 32).

They particularly failed to engage with the substance of Second Sight’s eight-page interim report (para. 18), preferring to concentrate on blaming the General Counsel for supposed mismanagement of the process leading to the report.

Alice Perkins, as Chair,the comes in for particular criticism for this failure as it was she who managed the Board (para. 51).

Escalation of serious risks to the Board of serious risks was also inadequate (para. 43). Paula Vennells in particular but also GCs Crichton and Aujard appear to be in the frame for that - failing to point out significant issues in the Clarke advice (in particular, our lead witness is compromised in ways that may have profound implications) and in the Second Sight Report.

Post Office also failed to systematically escalate such issues to RMG (paras. 44, 53, 54). Most of “the issues highlighted in the Second Sight 2013 or Simon Clarke Advice 2013” were not systematically or urgently escalated within the Post Office save for a somewhat haphazard dealing with matters in the Audit and Risk (ARC) Committee four months later. (para. 54)

Vennells’ failure to engage with bad news is similarly singled out for criticism. On the Second Sight review, “the CEO gave reassuring messages to the Board, but this was not a prelude to gaining more or deeper knowledge.” (para. 59)

The sharing of information by the Executive with the Board/ARC is sometimes referred to as “limited and partial”. Partial, I think, means something like favouring one particular view here (i.e. that Horizon was sound). Certainly, they say the Executive did not share, “important information” in the Simon Clarke Advice about Gareth Jenkins and the impact of his tainted evidence on risks for the Post Office”. (para. 65)

Many lacked relevant experience: the single out Perkins, Vennells, and the Board (paras. 74 and 75), but the same could be said of the GCs. Strained relationships between execs and non-execs may have contributed to keeping problems beneath the surface (para. 82). Whilst Executives and the Board commissioned “considerable expert advice” on technical and legal matters, “problems …did not relate to gaining access to specialist advice or commissioning a review, but rather with knowing what to do with the advice or findings when presented with them.” (para. 87)

The conduct and culture of the Board was also flawed (para. 93). A critical decision, reversing a recommendation from the [acting] GC (Aujard) that POL formally cease prosecutions, was taken as a result of “an unusual discussion” (para. 94), with a decision taken hastily, and on the basis of partial information.

“It appears from the minutes that the NEDs were thinking of costs and deterrence, whereas the GC was possibly thinking of the flaws in POL prosecutions practice, of which they, but not the NEDs, was fully aware, not least because he knew the Simon Clarke Advice. This suggests that participants were not making decisions on the basis of a shared understanding of the full and bigger picture.” (para. 94)

In the meeting itself the CEO sided with the NEDs. Steward and Dawson seem to say they would have expected the GC to speak up and advise them all fully on the risks associated with the Clarke advice.

Handling of the Second Sight investigation and the Simon Clarke advice was, they said, potentially marred by potential conflicts of interest for Susan Crichton. Both were investigating areas of work that Crichton had responsibility for (para. 101). The same problem manifest in her oversight of the working party dealing with mediation (paragraph 103) and a request that she conduct a post-mortem into her own management of the Second Sight investigation (para. 103).

Similarly Cartwright King's potential conflict of interest is discussed:

In the event, notwithstanding Brian Altman KC's knowledge and agreement that Gareth Jenkins was a tainted witness (POL00006581, p 6, paragraph (x)) and his knowledge therefore, that prosecutions had in the past been unsafe, it seems neither he nor the GC brought this matter of the tainted witness to the attention of the Board in a way in which they fully understood its importance. (par 106).

Legal and technology related work was also said to have operated in black boxes/silos that executive treated as outside of their responsibility “and thus nothing to do with them” (para. 112).

On the handling of the Wolstenholme case (in 2004) they suggest the RMG GC*** and then POL CEO (David Mills)).

“must have understood… … about the Horizon System post a risk to the validity of SPN branch accounts and therefore to the safety of prosecutions on horizon data; yet they did not act.” (para. 161).

Both the £1m risk posed by the Wolstenholme case and Jason Coyne’s report should have been escalated to the POL chair (para. 166). The POL Board were focused on survival and growth not operational matters and business risk (para. 170) and POL prosecutions were not the subject of report to the RMG Board or via ARC (Audit and Risk Committee) and should have been (para. 178). RMG’s responsibility is emphasised:

Whatever the reasons, the structure meant accountability for risk oversight in POL prosecutions was weak. RMG GC who had line responsibility for the legal teams and did not sit on the POL Board, so the POL Board had little visibility of prosecutions. Prosecutions being part of the legal function, remained ultimately a central RMG responsibility. (para. 182)

At its simplest, they form the view that neither RMG nor POL appeared to perceive problems with Horizon as a serious risk (para. 191) but RMG was ultimately responsible for these risks (para. 205) and its Board members failed to provide appropriate challenge to POL or (even) attend POL Board routinely (para. 199).

For those of you who do not want to wade into the details further, please scroll down to the final section.

Their detailed analysis of the handling of Second Sight’s Interim Report

The detailed account of what was wrong with the handling of Second Sight’s interim report suggested the accepted narrative that Horizon was robust and errors derived from user error meant adverse evidence did not land. It was not a problem confined to the report. EY’s audit opinion for year-end 25 March 2012 identified “significant audit and accounting issues” (para. 221).

Board members relied on the Executive’s reassurances whilst the Executive failed to ensure the Board appreciated the full significance of the Second Sight report and all the information within it (para. 230).

In spite of the Board had been emailed by Vennells (on 6^th July 2013) noting reputational and potential financial risk arising from Second Sight’s review (para. 232) and media and political interest in the problems being known to them, neither a Board call on the 1st of July (at which the problems brewing with Second Sight were first flagged) nor the Board meeting on the 16th of July included any mention of serious consequences for the post office that might result from a re-evaluation of past and present prosecutions (para. 233).

It is an odd situation: a process which is driving both risk and reputational concern outside of the business is supported without a proper understanding, if we are to believe the NEDs evidence, and in the face of some concerns being held by leading lawyers in the organisation (Crichton has also indicated she was against PO prosecuting privately).

The Executive are said to have been too mistrustful of Second Sight to see and consider properly the evidence within their report (para. 238). And they suggest Paula Vennells failed to engage sufficiently with the report being prepared for the Board on Second Sight by Susan Crichton (paras. 251-255).

Vennells and the chair, Alice Perkins, focused on communications and PR rather than discussion of the findings themselves (para. 257). There was also a failure to prepare the Board with written briefing prior to their first call to discuss the matter on the 1st of July (para. 258). Vennells failed to ensure broad collective executive discussions around this (para. 265) or proper briefing of the Board (para. 268). Rather than an executive summary of the key points of the report, there was a list of “minute detail of particular inaccuracies which, in our view, did nothing to dense the important messages which could be discerned from the report.” (para. 270).

Vennells’ introductory remarks at both that call and the Board meeting are “reassuring and partial” (para. 259). Neither the Horizon system nor prosecutions are reported as being a potential problem for Post Office (para. 261).

On Alice Perkins’ role they note evidence of strains between her and the GC (Crichton) and that, “Structurally the GC was kept separate from the Board; she was not a member of the Board, and she was not regularly in attendance.” (para. 283). Their view is that the Chair had sufficient information in the Second Sight report and elsewhere to show her that policy and practise in investigations and prosecutions needed discussing at Board level (para. 285).

She should have given careful consideration to how the Board should engage with the detailed findings of Second Sight (para. 286). She would have been expected to agree with the CEO and Company Secretary who would prepare and present the paper, and their attendance at the meeting for presentation and discussion (para. 287). Knowing the GC was the author, she should have made it a “priority” that the GC present at the meeting and fully brief her prior to it (para. 288).

“We have found no evidence that the Chair prepared in this way. Once in the Board meeting, we have found no evidence that she chaired the meeting in such a way as to ensure that the full import of the findings of the Second Sight Interim Report were appreciated and discussed, with decisions on follow up actions agreed.” (Para. 289)

Dawson and Steward do not speculate on whether the earlier Board call and the way in which Vennells and Perkins prepared, and failed to prepare, for the meeting drove this but on the day of the Board meeting the NEDs focused on criticisms around Second Sight’s reporting rather than the substance, “which should have had their full attention and prompted a different scale of questioning and challenge to the executive.” (para. 304)

Given media and political attention, Second Sight's report would be expected to have been of “great interest to the Board” when they received it on the 8th of July. It was 8 pages long plus appendices (para. 306). They do not make the point this is not a taxing read, instead dwelling on the absence of an executive summary and significant information not being easily accessible in the report's conclusions (para. 310). The Executive should have required an executive summary or written one for the Board (para. 311).

It is pointed out that the accompanying GC paper for the Board does not have an executive summary either, nor does it summarise Second Sight's report (para. 315). Second Sight's report itself seems to have been taken as read (para. 323) rather than formally discussed at the Board.

“In our view, the CEO, in consultation and collaboration with the GC, should have ensured that a comprehensive summary of the major issues raised in the Second Sight Interim Report was carefully considered by the Executive team, prior to its communication to the Board. We have seen no evidence that the CEO actually took full account of the full findings of Second Sight's work.” (para. 326)

Nonetheless, NEDs had sufficient information to raise and scrutinise pertinent risks (para. 328).

Alice Perkins’ decision to exclude Susan Crichton was “unexpected and unusual” (339). It deprived the Board of the only one with expert legal knowledge in the matters before them (para. 397). They raise in pointed fashion the peculiarity of Perkins having a full and frank discussion with NEDs about Crichton's failures prior to the Board meeting and then seeking to do a repeat in the Board (para. 395), unless, “the Chair was particularly keen to get aboard minute of the criticisms” (395). Other ways of dealing with that would have been both more normal and preferable (para. 396). They think this provides a strong signal about the culture in the Boardroom of disrespect for colleagues, a rift between the GC, the chair and the Board, and so on (para. 400).

If she had not been excluded, they say the Board may have heard about Simon Clarke's advice given already on the 3rd of July and in writing on the 12th of July, which arrived on the 15th of July (para. 403).

The conduct of the Board here, being the chair's responsibility, “did not meet the standards normally expected of a well run Board” (para. 404). It also likely inhibited constructive challenge (para. 406).

Interestingly, they note that as well as blaming Susan Crichton for the report, the inclination to blame seems to have extended “into the realm of “wrongful prosecutions”” (para. 342). [Thus they picked up one of the key risks. That they pick up on the legal risks around wrongful prosecution is clear given they raised issue of insurance from themselves around wrongful prosecution risks.] Beyond that there is no apparent inquiry into the real validity of wrongful prosecution claims (para. 352).

To my mind that's a very interesting alignment of events: Blame Crichton, worry about protecting themselves, fail to scrutinise the risk to the Company comprehensively, if at all.

There were a great many questions that they say the Board should have considered asking including why the Post Office had been advised to undertake a review of all their criminal cases, and how they as a Board were going to maintain a line of sight on these risks the Company were being exposed to. There is no evidence any of these issues were raised (para. 355-356).

Even to the extent that the Board raised cultural issues found by Second Sight, to take those seriously one would have expected a more thoroughgoing discussion and set of actions (para. 358 dash 359).

Interestingly too, Paula Vennells partly relates the problem with wrongful prosecutions to Royal Mail Group and separation of Post Office from RMG (para. 343).

Simon Clarke Advice

Suson Crichton received a summary, oral report of Simon Clarke’s advice on the 3rd of July 2013 (para. 413). They assume that he would have expressed the concerns about Gareth Jenkins’ evidence that he expressed in his written advice of 15 June. This was five days prior to publication of Second Sight's interim report. She received the written advice on the 17th of July (para. 415).

They discuss who should have received the advice, indicating that the Board should have been given a clear statement of Clarke’s oral advice at the Board meeting on the 16th of July (para. 421). Another of Clarke’s advices (of the 8th of July) confirming the need for a review of all cases and information that must be told to RMG should also have been communicated to the Board urgently (para. 422). As Crichton was not at the Board, she should have ensured the Board was properly briefed on the advice as soon as possible after the Board meeting (para. 423).

In the absence of a clear summary or the advice itself, information that the Board did receive from the Clarke advice was “fragmented and partial”. They say “it is surprising” that written information provided to the Board was not explicit that bugs were known by an expert witness and have not been disclosed to defendants and that Post Office had been advised to review all criminal cases as a result (para. 426).

Whilst elements of the advice were disclosed to the chair of the ARC (Audit and Risk Commiteee) in a face to face meeting with the GC and Company Secretary on the 27th of July 2013, they should have been given all of the Clarke advice conclusions (para. 427). The chair should have been told as a matter of urgency about the Clarke advice (para. 429) and does not appear to have been. The CEO should have reported that to them immediately (para 430).

In one of several moments where they emphasise the need of Executives to ensure not only that they place material information before decision-makers, but that they ensure it is understood, they say that if, in the GC's view (Susan Crichton), the CEO, having been told about the lawyers' concerns over the witness (Gareth Jenkins), had not understood the real issue and risk to the business, then the GC should have escalated to the Chair quickly.

She should have done this following the 3 July 2013 meeting with Cartwright King and followed up with a summary of the oral Advice, before the 16 July 2013 Board meeting. Instead, they say, she did neither and did not see it as a priority for the Board.(para. 431)

They point out the apparent absence of “agreed escalation procedures for the GC in a crisis” (Para. 432). And that the Advice received by GC on 3 July 2013 “should have been a matter for urgent discussion between the GC and CEO,” with “all the conclusions of the Simon Clarke Advice” being shared with the CEO, “in a way which the CEO understood.” A copy of the Simon Clarke’s written advice or a clear summary should have bene sent to her when POL received it on 17 July. (para. 433).

Their look at the GC-CEO-Chair relationship

By way of conclusion on this matter (para. 438-44) they say:

438. If it is found that neither Susan Crichton, GC from July 2013 to November 2013, nor her successor until 2015 Chris Aujard, informed the Board of the Simon Clarke Advice, specifically that criminal prosecutions may have been undermined by the failure of Gareth Jenkins to disclose evidence of bugs in the Horizon system, then this is a failure of governance, in so much as governance is a combination of formal roles, competence, formal and informal relationships.

439. However, it is not in our view a failure which can be laid simply on the GCs.

440. The GC must be able to speak their mind, represent their professional responsibilities in the sure confidence they will be listened to.

441.The expectation that the GC will provide objective legal advice to the Business and to the Board, means they need the opportunity, if they consider it necessary, to report to the Board independently of the CEO. This is arguably more difficult to achieve in situations where the GC does not sit on the Board.

442. The Chair, CEO and GC, share a responsibility for facilitating a relationship between the GC and the Board based on mutual trust, respect and capability.

443. The Board, normally through the Chair, should be able to seek the GC's advice directly. Effective governance in this respect depends on a strong relationship between the Chair and the GC, also based on mutual trust, respect and capability.

444. In our experience, these GC, CEO, Chair relationships are always complex and nuanced especially when tensions arise. This reflects the structure in which the GC reports to the CEO as a line manager; and the GC is a member of the CEO's senior leadership team; and the GC has a 'dotted line' to the Board, normally through the Chair; and the GC has a duty to offer independent legal advice to the Executive and the Board. In situations where the GC is neither a member of the Board, nor normally in attendance, it is the Chair's ultimate responsibility to ensure that the GC is confident she is able to offer such advice.

And:

448. In this case 'legal' seems to us to be almost semi-detached from the business and the CEO to be happy for issues of a legal nature to remain the responsibility wholly of the GC and the legal advisors.

It is interesting that they turn their attention to Chris Aujard, Crichton’s successor. As we have seen, they are critical of the ARC and Aujard not having a shared view of the risk associated with prosecutions (para. 453).

457. Had the CEO and ExCo known and understood the Simon Clarke Advice, good governance in our view would have seen the Executives bringing all relevant information openly to the ARC, avoiding weak signals or contradictory messages, recommending that POL cease prosecutions (Option D) and the NEDs leaning in, being curious, and challenging the case for future prosecutions within a wholistic risk framework.

They also mention their view that the GC may have decided the working party (which Sir Anthony Hooper chaired) should be reactive rather than proactive in its approach without involvement of CEO (para. 459).

During this period, Vennells was not, they say, determined enough to understand legal risk around the CCRC letter that was received (given it alerted them to an investigation and potentially appeals). She should have worked with the GC to ensure it was understood by the Board (para. 461) but it was treated as a mere legal matter (para. 462). She also needed to be fully aware of, understand, and agree the response to the CCRC (463). The Board was not fully apprised of why Cartwright King’s sift was necessary or able to discuss the rationale for the parameters (why it only went back to 2010) and the reactivity of the review (para. 466).

The Clarke advice should have triggered an urgent review of prosecutions policy (para. 469). The ARC paper (Aujard’s) was defective (no executive summary again) but also various significant information might have been included but was not, including emphasising the importance and far-reaching nature of the problems Post Office faced, as Clarke’s advice had (para. 475). Without saying it, the point appears to be Aujard comes with fresh eyes and yet repeats the errors of Crichton.

On Vennells’ agreeing with the ARC and not him on ceasing prosecutions they say:

478. When there is a difference of opinion between GC and CEO, expected standards of good governance would require that GC and CEO discuss differences, the GC would fully explain the basis of his views, and if their differences persisted (which would be a reasonable outcome in many situations in which decisions are finely balanced) they would consider how to brief the Board to help the Board see all the issues and make a final decision.

And at para. 483:

e. The GC generally, has a duty fully to inform the ARC and the Board, in order to protect the business in situations where the CEO may not be doing this. Although not a member of the POL Board, the GC had a direct duty to the Board. If the GC felt at any time when the Board was making important decisions of Policy, the Board was being given incomplete or inaccurate information, whilst obviously in a difficult situation, they must inform the Chair of their concerns and express their opinion at ARC even when it differs with that of the CEO. At the same time, the GC should continue to discuss with the CEO any differences of opinion.

In other words, Aujard should have spoken up, possibly in various places, but did not. The point here is that his client is the organisation, not Paula Vennells, and the ARC should hear all important material information relevant to their decision and do not.

Conflicts of interest

A final point is conflicts of interest.

On Cartwright King having a potential (as it turns out an actual) conflict of interest they point out Brian Altman KC raised a conflict but there was no evidence the executive, legal or CEO discussed his view (para. 487).

In some ways, I would it is worse than that, to my mind the evidence suggests a Bond Dickinson lawyer raised the possibility of a significant conflict with Crichton and she chose to deal with it through instructing Altman as a kind of oversight. Altman, in my view, gets the conflict issue wrong: but it may help out Crichton and Aujard as he essentially rejects the concern about conflict in his advice. He treats it as a commercial conflict when the potential, and as it turns out actual, conflict was a solicitor own client conflict that should, in my view, have meant Cartwright King should not have been marking their own homework.

Dawson and Steward say, “This external conflict of interest built into the work plan would normally in our experience be a cause for concern and considered action by the GC and, given the CEO's responsibility for the business, the CEO herself.” (para. 489). They think the conflicts should have been raised in address with the CEO and Board (para. 492).

The final section

Their report ends with some brief points about Vennells sending weak signals of risk and the GCs positioning the need to review prosecutions in ways that, “did not reflect the concerns of the Simon Clarke advice, nor the evidence at the Altman advice for why Gareth Jenkins was not suitable as a witness” (para. 499). As well as the need to avoid, “weak signals or contradictory messages” when dealing with the NEDs who had failed to be curious and challenging on prosecutions (para. 502).

503. It also requires people to take responsibility and accountability and yet in these communications, it is as if the people who sent these messages almost do not want to take responsibility for making their views unambiguously clear. Status and hierarchy can have the effect of making people believe their views are not as important as other peoples. Diffusion of responsibility when people assume that responsibility will be shouldered by others who are involved in a situation requiring action, can be extremely dangerous especially in a crisis.

…

524. The Executive view linked the Sift Review to the Second Sight Interim Report and not to Gareth Jenkins as an unsafe witness. In doing so, they linked the findings of the review to technology which they 'knew' was 'robust'. Furthermore, in not bringing a discussion of the Simon Clarke Advice to the Board, members of the executive encouraged the NEDs to continue on a path which did not focus on the much rehearsed concerns of MPs and SPMs.

I gently encourage the reader to ponder those two words; as if.

On Chris Aujard who replaced GC Susan Crichton as acting GC:

528. The new GC was potentially a 'fresh pair of eyes' on prosecutions, particularly as prior to the November ARC meeting, he had received an induction briefing note from Cartwright King which covered POL's history and approach to prosecutions including the Simon Clarke Advice on the failure of Gareth Jenkins as an expert witness (POL00108136, paragraph 10). The note described the failure as 'an important and far-reaching failure the consequences of which are only now beginning to crystallize'. When questioned about his receipt of this briefing in his oral evidence (Oral evidence of Chris Aujard, INQ00001135, p 79 - 80), Chris Aujard says he believes that he saw the Gareth Jenkins issue as 'an historic issue - recently discovered but nonetheless historic issue and that was being dealt with as part of an overall process... to review cases by Cartwright King... ' The GC was well placed to challenge the prevailing view of the CEO and ExCo on POL's policy and practices on prosecutions. It seems to us he was clear in his preference to cease prosecutions, but he was not clear to his colleagues or the Board about POL failures in their prosecutions.

They do not speculate on why but they do say this.

529. Structures or relationships frequently get in the way of challenge, in this case, it appears to us that the new GC was confused about his accountability to the Chief Executive to whom he reported, and his duty to escalate critical issues to the Board.

530. The Board Chair sat on the ARC and so there was a direct route for escalation but instead, the GC's November paper to ARC seems to send mixed messages. He repeats the positive claims made in the CEO's update report to the October Board about the small number of disclosures and POL's processes for reviewing prosecutions, while recommending Option D which sees POL ceasing prosecutions altogether, commenting that Brian Altman KC says POL's role in prosecutions is an anachronism. Throughout he makes no mention of the Simon Clarke Advice.

There are a number of points where the authors draw attention to the GC not being on the Board (para. 124):

In our view the problems and dysfunctions in the way the CEO operated with some of their Senior Executive colleagues, and the apparent lack of an effective executive team taking collective responsibility, which were revealed in the Second Sight 2013 and Simon Clarke Advice 2013 cases are a reflection of the compound impact of strained relationships, structural silos, a CEO who did not see her role as needing to be closely in touch with all areas of the business and the fact that the GC was not a member of the Board. Neither the structures nor the relationships served POL well.

And at para. 418:

We do this by looking at the formal structures, roles and relationships specifically between the Chair, CEO and GC. These relationships tend to be highly complex and nuanced, especially when tensions arise, because the GC reports to the CEO but has a dotted line through the Chair to the Board. If the GC is not a member of the Board, and not normally in attendance at the Board, the importance of the GC, CEO, Chair relationships are magnified.

Fairly or unfairly, the nuance comment reminds me of Richard Morgan’s comment about sophisticated evidence management when he discusses the Castleton case. What is worth dwelling on is the as if. It is as if the people in this story wanted to avoid responsibility. It is as if they were told, or could see, that the risks were there, but chose to blame Second Sight or Susan Crichton.

When everyone involved: the NEDs, the CEO, the Chair, GCs and others make such significant errors in the same pattern one is entitled to ask whether it is as if the pattern was intended.

It seems to me there are two main ways of thinking about this. One is there may have been a very deliberate approach, intentionally covering up known wrongs, and the other is a more natural leaning away from trouble by all involved. The latter can cover a range of sins: naively deluding themselves and others or recklessly covering up things they know they should not. Even if they do not appreciate the full scale of the problem they are in fact grappling with.

Just as Paula Vennells earned her corn by keeping a description of Horizon risks out of the Royal Mail Group’s flotation prospectus, so to keeping a lid on Horizon and prosecution risks helped the Board focus on what it wanted to focus on survival, commercial growth, the brand.

This is how Dame Sandra Dawson put the conundrum of what the Board and the Executive were doing in their oral evidence to Jason Beer:

Dame Sandra: It’s about, yes, where the gaze of the Board was falling. It was falling on brand and reputation, it was falling on securing Government agreement for ongoing funding, it was securing on – it was focused on getting Government support for the strategic plan, which was connected to funding. It was helping RMG prepare for privatisation, and it was continuing to create the Post Office, an independent business, separate from RMG, in which they had to build their own standalone governance structures and central functions. All good priorities.

But, at the same time, there was the, as we’ve indicated, media, ministerial, Parliamentary interest and identity of what, on the face of it, appeared to be serious problems in the use of Horizon data in prosecutions. This, as far as we could see, was not a priority for the Board at all.

Put like that, the gaze makes no sense. It’s as if it was a conscious turning away.

_________

*Academics do not agree on much, but on one thing we do agree with deserved emphasis: Librarians are great.

** Lorrie Moore, who’s phrase this is, is also great.

*** My working assumption is they mean Catherine Churchard, who was then Legal Services Director and the closest thing I can see to a GC, and reported into Company Secretary Jonathan Evans.