1 Wednesday, 13 November 2024 2 (9.35 am) 3 DAME SANDRA JUNE NOBLE DAWSON (continued) 4 DR KATY MARY STEWARD (continued) 5 SIR WYN WILLIAMS: Mr Beer, I'm sorry about the delay this 6 morning. I understand there are problems with the 7 Internet. I won't try and explain what they are. 8 The effect, I think, is this: that we can all 9 continue as normal here, but those who watch on live 10 feed will not be able to do so at the moment. However, 11 what is occurring now and henceforth will be recorded so 12 they won't actually miss anything, and we're hoping that 13 the Internet problem will be solved during the course of 14 this morning, and then they can rejoin as normal. 15 MR BEER: Thank you, sir. I think that has been announced 16 to the public by Tweets and other messages so those 17 outside the room can understand what's happening. 18 I think it also afflicts the transcript, but the 19 transcript is being made, and will be available when the 20 IT problem has been sorted out. 21 SIR WYN WILLIAMS: Yes. I think we can all do without the 22 instantaneous facility that we've been enjoying and 23 I think we're also okay with documents, which would be 24 a problem, if it was a problem, but I understand it not 25 to be a problem. 1 1 MR BEER: Yes. 2 SIR WYN WILLIAMS: So we'll see how we get along. Thank 3 you. 4 MR BEER: It's a fire alarm day today as well. 5 SIR WYN WILLIAMS: It's a fire alarm day. Everything is 6 happening today. 7 MR BEER: The order of events, sir, just so that you know, 8 firstly Mr Henry, on behalf of the HJA Core Participants 9 for up to 45 minutes, then Mr Stein on behalf of the 10 Howe+Co Core Participants for up to 45 minutes, an hour 11 and a half, therefore, then the morning break. Then the 12 Hudgell Core Participants represented by Mr Moloney for 13 up to 30 minutes, the NFSP for up to 15 minutes, and 14 then Ms Vennells' representatives for up to 30 minutes 15 which should take us to 12.30. 16 SIR WYN WILLIAMS: I'm sorry that a longstanding engagement 17 of mine means that we are having a half day but I don't 18 suppose any of you will mind, really. 19 Right. 20 MR BEER: Thank you, sir. Mr Henry. 21 Questioned by MR HENRY 22 MR HENRY: Thank you, sir. 23 Dame Sandra and Dr Steward, you make it very clear 24 that you are not arrogating the role of the Chair in 25 reaching any verdict on people's motivations. 2 1 DAME SANDRA: That is correct. 2 MR HENRY: But interestingly, at the close of your evidence 3 yesterday, you were dealing with the fact that 4 motivations, of course, can be either driven by, let's 5 say, altruism or ethics, or self-interest, and it's 6 perfectly acceptable if the selfish reason leads to the 7 right result. For example, from a risk management 8 perspective, best practice would dictate that threats, 9 particularly existential, or potentially existential 10 threats, are clearly identified and resolved. You'd 11 agree, obviously, with that? 12 DAME SANDRA: We agree that it is vitally important that 13 organisations identify the key risks to their business. 14 MR HENRY: Exactly. So it would be entirely understandable 15 for a board, motivated by an ethical sense, to deal with 16 the core problem, in this case the failings of Horizon 17 and its impact on the risk of wrongful prosecutions, 18 because they were driven by a moral imperative that the 19 very idea that somebody had been wrongly imprisoned was 20 intolerable and so, therefore, they had to get a grip on 21 the issue, and perform a searching and fearless moral 22 inventory, as it were, of the risk. 23 So that would be one motivation but, aside from that 24 motivation, wherever the consequences lay for the 25 organisation, a board doesn't need to have such Olympian 3 1 standards, does it, because a board might act selfishly 2 by thinking, "Oh, my God, what does that mean for our 3 organisation's reputation? We'd better get to the 4 bottom of this and sort it out". So that would be 5 another perfectly acceptable motivation but it's not 6 driven by the moral imperative: it's driven more by the 7 self-interest, "How are we going to, as it were, look"; 8 do you agree with that? 9 DAME SANDRA: I would agree that there is a duty under the 10 Code for boards to look at the risk of their 11 organisation. 12 MR HENRY: Yes, but what a board and an executive, a senior 13 executive group, cannot do is cover things up or 14 wilfully ignore them to protect the reputation of the 15 organisation. I mean, that would be an infamous course 16 of action. 17 DAME SANDRA: We're dealing in hypotheses, as far as we're 18 concerned, because, as I say, we're not adducing motive. 19 MR HENRY: But dealing with that hypothesis, I suppose the 20 answer is obvious. 21 DAME SANDRA: The hypothesis that, if people were to cover 22 things up seriously, if they were, then that would be 23 against the Governance Code. 24 MR HENRY: Absolutely, I know we are continuing on this 25 hypothesis, but to take that high risk strategy, it 4 1 would be extremely unlikely that a senior executive 2 group would do that off their own bat. Dealing with the 3 hypothesis, it is more likely, is it not, that they 4 would have positioned or obtained the acquiescence of 5 the board or the chair? 6 DAME SANDRA: I don't have experience of that and 7 therefore -- well, we can hypothesise -- indeed we can 8 hypothesise -- and the hypothesis may be correct. 9 MR HENRY: Can I just deal, please, with one paragraph in 10 your second report, your paragraph 106, and I'm afraid 11 I don't have the page reference, but I'm going to read 12 out the part that I wish verbatim, but it's 13 paragraph 106, I'll wait until it gets up on the screen. 14 DAME SANDRA: Thank you. 15 SIR WYN WILLIAMS: If anybody is following the hard copy, 16 it's page 31. 17 MR HENRY: Thank you very much, sir. 18 "In the event, notwithstanding Brian Altman King's 19 Counsel's knowledge and agreement that Gareth Jenkins 20 was a tainted witness, and his knowledge therefore that 21 prosecutions had in the past been unsafe, it seems 22 neither he nor the [General Counsel] brought this matter 23 of the tainted witness to the attention of the Board in 24 a way which they fully understood its importance." 25 What I want to explore with you is whether that is 5 1 right because, of course, you are familiar with the 2 unsafe witness email that Paula Vennells sent to Alice 3 Perkins -- 4 DAME SANDRA: Indeed. 5 MR HENRY: -- and who is to say whether their accepted 6 beliefs or bias meant that the issue was not pursued? 7 DAME SANDRA: I'm sorry, can you just repeat the question? 8 MR HENRY: Yes, who is to say that, rather than Mr Altman 9 and General Counsel being at fault for not drawing the 10 full ramifications of this to the Board in a way in 11 which they fully understood its importance, what I'm 12 trying to suggest is that the fault lies with Paula 13 Vennells and Alice Perkins. 14 DAME SANDRA: I mean, I think this is correct. It seems 15 neither he nor the General Counsel brought this matter 16 to the attention of the Board. That is correct. But 17 your question is then: but did other people know and 18 should they have brought that to the attention? 19 MR HENRY: Absolutely, well, to some extent of course, 20 General Counsel would appear to have wanted to draw it 21 to the attention of the Board but was physically siloed 22 and not allowed to present to the Board at the July 23 meeting, 16 July. 24 DAME SANDRA: Indeed. That was the case: she wasn't there, 25 yes. 6 1 MR HENRY: Now, you wouldn't have seen this document and we 2 will provide a reference to the purposes of argument in 3 due course, but on 12 December 2020, there is a record 4 of a conversation between a Mr Rodric Williams and 5 Mr Altman where Mr Rodric Williams was saying to 6 Mr Altman, apparently without demur from Mr Altman, that 7 Mr Altman's 2013 report was "an optic piece" for the 8 Board. Would your evidence be that the Altman Review 9 was a major piece of work that the Board ought to have 10 been made explicitly aware of? 11 DAME SANDRA: I will ask Dr Steward in a minute about that. 12 As I recall -- and of course it's quite difficult not 13 having documents in front of one to be able to comment. 14 As I recall, there is reference to it at the ARC 15 meeting, in which that -- one of those reports is 16 referenced. 17 Do you have anything to add? 18 DR STEWARD: I think you're correct in saying that the 19 15 October Brian Altman general advice is referenced in 20 the paper by Chris Aujard to the ARC in November 2013. 21 So to that extent, there was references to the Board, 22 there was the -- there were some of the references from 23 the paper to the Board. 24 MR HENRY: But nothing about the Gareth Jenkins issue 25 appears to have been pursued? 7 1 DR STEWARD: In that incidence, yes. I mean, as far as our 2 frame of reference in looking at the general advice in 3 the ARC, that's what we observed. We, of course, don't 4 know what happened, the entirety of what else the Board 5 was told. 6 MR HENRY: Well, I want to now try to work out why the Board 7 was not properly seized of the unsafe witness issue and 8 to test the assumption that that was because neither 9 Alice Perkins or Paula Vennells were inclined to develop 10 it or share it with the Board or apprise the Board of 11 the serious and obvious risk it presented. So could 12 I ask you to reflect on this document, which I think you 13 have seen overnight. It is POL00108065, and it's dated 14 27 August 2013. Could we scroll down, and you see: 15 "Paula your queries answered in red. 16 "Susan, Thanks a really clear note. Noted below 17 some queries (IN CAPS)." 18 Then if we could scroll, please, "Legal and 19 adjudication of future case". These words: 20 "I am waiting for a meeting (either last week of 21 August or first week of September) with Brian Altman QC. 22 The QC will provide an initial steer on the process for 23 existing cases. This session will be the first step in 24 helping us define a process for future cases. We will 25 need to review the current plan once we have this steer. 8 1 IS THIS REF PROSECUTING AUTHORITY? Yes, 2 a recommendation on that will be one of the outputs from 3 this work, also important to have oversight over the 4 process with regard to the review of our criminal 5 prosecutions." 6 Then this: 7 "We are urgently working with our external firms to 8 identify an independent expert to provide evidence on 9 the Horizon system. PREVIOUSLY THIS WAS PROVIDED BY 10 FUJITSU? [THESE ARE IN CAPS, MS VENNELLS] WHY MOVE FROM 11 THIS? DO WE HAVE TO VALIDATE FUJITSU?" 12 Then in red, although it doesn't appear so: 13 "We are concerned that this needs to be independent 14 rather than [Fujitsu] verifying its own system. Happy 15 to explain rationale further at our steering board 16 meeting this week." 17 That steering board meeting we know took place on 18 29 August 2013. So there's clear discussion here 19 between General Counsel and the CEO about the issue, 20 particularly the need now to find an independent expert 21 witness. 22 Could I now ask you to go, please, to POL00108087. 23 We can see it was sent on 20 August 2013 and then resent 24 on 3 September 2013 at 21.25. Could I ask, please, to 25 scroll down to the issues concerning Mr Altman so it 9 1 will be towards the end of the document. Yes, thank you 2 very much. "Legal and adjudication of future case", 3 first bullet point: 4 "Meeting was held with our external law firm who 5 have been completing the criminal case review on 6 Friday." 7 Then this: 8 "The issues that we want Brian Altman QC to advice 9 on were agreed, final sign off of review process; and 10 advice on prosecutions going forward. 11 "Conference agreed for 9 September where the focus 12 will be on our prosecutorial obligations of disclosure 13 of any information which may be of assistance to the 14 defence. After this conference we will finalise the 15 terms of reference for Brian Altman's review; this will 16 include, amongst other things, a consideration of POL's 17 position re criminal prosecutions." 18 Dame Sandra and Dr Steward, I don't know how 19 familiar you are with the Seema Misra case, so depending 20 on your answer to that, will dictate whether I ask you 21 further questions arising from this. 22 DAME SANDRA: Before I answer that question, which I'm very 23 happy to do, can you tell me the bold which begins 24 "Conference agreed for 9 September", who is speaking 25 there? 10 1 MR HENRY: That would appear to be a note arising from the 2 steering group meeting, which took place on 29 August 3 2013, so I'm afraid I can't answer definitively but it 4 may be that that was drafted by General Counsel. 5 DAME SANDRA: Okay. But we don't know. It's quite 6 difficult because, obviously, this is a -- you might 7 call it, a multi-layered communication where it starts 8 and then other people comment. But as far as you can 9 imagine, that might be from the General Counsel. 10 With regard to the Seema Misra case, we have not 11 looked at that in any detail, we -- 12 MR HENRY: Well, then I will move on to the next document, 13 then. 14 Could I now ask you, please, to go to POL00381633. 15 I'm going to start at the top but we have an email from 16 Paula Vennells to Ms Crichton dated Tuesday, 3 September 17 at 7.51 in the evening, so it's about an hour before the 18 last email that we have considered, which of course was 19 re-sent 3 September at around 9.00 in the evening. 20 Just dealing then with the discussions we know that 21 there has been an email on 27 August, which I've taken 22 you to, setting things up for the 29 August steering 23 group meeting. Then the 30 August email, which was 24 re-sent on 3 September and, about an hour before it was 25 resent, we have this: 11 1 "Thanks Susan." 2 Then I omit words: 3 "Re the update -- could you add a para regarding 4 costs and timing on [Second Sight]?" 5 Then I omit words: 6 "My ambition is to reassure Alice that we are on the 7 detail." 8 But if we could scroll down, please, and it's the 9 second page of the document, "Legal and adjudication of 10 future case": 11 "Meeting was held with our external law firm. The 12 issues that we want Brian Altman QC to advise on were 13 agreed, final sign off of review process; options 14 regarding the appointment of independent expert witness 15 (paper to follow); advice on prosecutions going forward. 16 "Following this discussion, terms of reference for 17 his review to be finalised." 18 Can I ask you, please, Dame Sandra and Dr Steward, 19 did you actually see any paper regarding the appointment 20 of an independent expert witness? 21 DAME SANDRA: I don't believe we did. We did see a paper in 22 January -- 23 Was it January? 24 DR STEWARD: January 2014. 25 DAME SANDRA: Yes, January 2014, which suggested that there 12 1 were two independent witnesses from Imperial College 2 that had been identified. That is, I believe, the only 3 subsequent things that we have seen. 4 DR STEWARD: Yes. 5 DAME SANDRA: Of course, there may be other evidence but we 6 have not seen them. 7 MR HENRY: But here we can see that the CEO is clearly 8 sighted on the issues that they want Brian Altman to 9 advise upon, a final sign-off of the review process, and 10 terms of reference for his review to be finalised. 11 DAME SANDRA: Indeed. 12 MR HENRY: Right. Could I now ask you to go, please, to 13 POL00368926. This is 11 September. Susan Crichton to 14 Rodric Williams and Hugh Flemington but, if we could 15 scroll up, because this is dealing with who Brian Altman 16 should report to. We can see Susan Crichton, 17 10 September 2013, in response to Gavin Matthews. 18 "Gavin -- could you sent me the terms of reference 19 so I can take a look at it. 20 "Re reporting to POL I will check with Paula -- 21 maybe Chair of Audit Committee but I will confirm 22 [I think it is 'now'] he is not needed for Thurs." 23 That was an Audit and Risk Committee meeting, as far 24 as I'm aware: 25 "I have copied Andy Holt our project manager ..." 13 1 So here we are. Who should Brian Altman report to? 2 Susan Crichton was going to check with Paula Vennells 3 and, as far as one knows, who did Brian Altman report to 4 in the end? There's a gap, isn't there? 5 (Pause for fire alarm test) 6 MR HENRY: I think I'm safe to speak now. I mean, he did 7 not report in person to the ARC or the Board? 8 DAME SANDRA: We would need to look at the relevant 9 documents in order for us to give you an opinion on 10 that. 11 MR HENRY: I think I'm safe on that basis. Assuming I'm 12 right that he did not report in person to the Audit and 13 Risk Committee or the Board, whose decision would that 14 have been? 15 DAME SANDRA: By in person, may I -- he didn't appear 16 before -- 17 MR HENRY: Yes. 18 DAME SANDRA: -- or are you saying his report didn't go to? 19 MR HENRY: We know for a fact for the former that he did not 20 appear in person. 21 DAME SANDRA: Yes. 22 MR HENRY: But there is also -- can you help us, how clear 23 is it about the process of conveying what was obviously 24 a very important piece of work, how clear is the audit 25 trail, the paper trail, to establish the Board's 14 1 knowledge and accountability of the issues raised by 2 Mr Altman? 3 DAME SANDRA: I don't believe that we can comment on that. 4 SIR WYN WILLIAMS: I don't think you can but perhaps you can 5 help me with this: clearly, a great deal of -- let's 6 take out the "great deal" -- clearly, there was some 7 work done to formulate and finalise Mr Altman's terms of 8 reference. 9 DAME SANDRA: Evidently. 10 SIR WYN WILLIAMS: Should his terms of reference -- should 11 it have gone for information and/or approval either to 12 the Audit and Risk Committee or the Board before it was 13 concluded, in your opinion? 14 DAME SANDRA: My opinion is that it would have been good 15 practice, had it gone to the Audit and Risk Committee, 16 had there been an appropriate meeting quickly. One 17 wouldn't wish to delay doing it. And that it would be, 18 again, good practice for the Chair of that committee, if 19 it couldn't come before the committee meeting, to be 20 aware of what those were and then he could report at the 21 next committee that he had seen the terms of reference 22 and that he approved them. 23 SIR WYN WILLIAMS: Yes. Subject to your point about 24 independent Executive Directors being there to 25 challenge, if a report is prepared for such a committee, 15 1 coming from very senior lawyers who have agreed the 2 terms of reference, to what extent, in practice, is it 3 expected that that would be challenged? 4 DAME SANDRA: Oh, the terms of reference, Sir Wyn? 5 SIR WYN WILLIAMS: Yes. 6 DAME SANDRA: It might be -- in fact, I can think of 7 instances where I would look at terms of reference, and 8 they'd been agreed and I might say "Are we sure that 9 we're doing enough on that?", which would then inform 10 the nature of the work. 11 SIR WYN WILLIAMS: So, in other words, there's a practical, 12 useful purpose in it happening? 13 DAME SANDRA: Indeed. 14 SIR WYN WILLIAMS: Right, fine. 15 Sorry Mr Henry, then I'll stop. 16 Can I ask you the same question about the actual 17 written advice, if that's what we'll call it, of 18 Mr Altman, over the next time period. What is your 19 opinion about whether the actual piece of writing or the 20 substance of it, should that have been transmitted 21 either to the Risk Committee or the Board? 22 DAME SANDRA: With regard to the substance, then I'm sure 23 that it should have been understood and -- to the 24 Committee and, in the report from the committee to the 25 Board, which should happen each time, the Committee, the 16 1 Chair, who would give that report, should summarise what 2 the Committee looked at and give it to the Board. 3 I wouldn't necessarily expect, either at the Committee 4 or at the Board, the actual piece of paper to come 5 forward, but I would expect the process that I've 6 described to happen. 7 SIR WYN WILLIAMS: Then, without wishing to steal Mr Henry's 8 thunder, but I will, should a reasonable chief executive 9 and/or should a reasonable general counsel ensure that 10 those things happened? 11 DAME SANDRA: Yes. 12 SIR WYN WILLIAMS: Right. 13 MR HENRY: Steal right away, sir! 14 SIR WYN WILLIAMS: No, no, back to you, now, Mr Henry. 15 MR HENRY: No, no, thank you. 16 I'm now going to deal with the concept of critical 17 friends, and the role of non-executives on boards. Now, 18 you have actually cited a work of scholarship by Robert 19 Hazel, Alan Cogbill, David Owen, Howard Webber and Lucas 20 Chebib, Critical Friends? The Role of Non-Executives on 21 Whitehall Boards. 22 DAME SANDRA: Mm. 23 MR HENRY: You reference it at page 129 of 133 of your first 24 report. Can you expand upon the term "critical friend", 25 please? 17 1 DAME SANDRA: I mean this, as you say, is in the context of 2 Whitehall departments and Whitehall departments are, to 3 an extent, different to that of -- 4 MR HENRY: Absolutely -- 5 DAME SANDRA: -- other matters. 6 MR HENRY: -- and I was going to come to that because 7 I wanted to know what would be the most useful track, to 8 part from your expert report, to enable the Chair, 9 should he wish to go further into this subject, to 10 understand how the NED model of corporate governance 11 could be strengthened and improved, given what we've 12 seen in this saga? 13 DAME SANDRA: I mean, that's a huge question for me to take 14 from you from the Chair, and I would be happy to give it 15 considerable reflection. The role of the Non-Executive 16 Director is described in -- both in governance terms, 17 but also in terms of nearly every board review that one 18 looks at, and the essence is: independent, absolutely 19 not part of the executive in any way, not responsible 20 for running the company, responsible for bringing their 21 specialist advice, responsible for being questioning, 22 challenging, curious, and giving that independent pair 23 of eyes to the -- to what the board is attending to. 24 The idea of critical friend, I think, goes to the 25 balance between support, which is the friend, that their 18 1 role is to support the executive, but it is also to be 2 critical, to challenge what is going on, if it's seen 3 not to be in the best interests of the company, which is 4 what, as it were, motivates their appointment. So it's 5 that balance which I think we talk a lot about between 6 support and challenge. And, as an independent 7 non-executive, your responsibility is to do both. 8 MR HENRY: Now, would you agree that, throughout this entire 9 saga, there has been a pitiful evidence base, so far as 10 the NEDs acting decisively to reframe the way in which 11 the executive group was dealing with this matter, and to 12 ensure the swift and decisive resolution of the matter, 13 namely Horizon failings and its impact on prosecutorial 14 risk? 15 DAME SANDRA: I think yesterday we dealt in some detail 16 about the fact that, in our view, the Second Sight 17 Report contained enough information, although not 18 necessarily coherently brought together, to show that 19 there should be challenge on those points. 20 MR HENRY: In fact, what you had instead was, rather than 21 selflessness, integrity, objectivity and, you know, 22 a determination for proper accountability you had, did 23 you not, the spectacle of the NEDs being outraged about 24 the way it had been handled by Susan Crichton, and we 25 have seen and heard evidence that they were concerned 19 1 about their own personal position and the notification 2 to the Post Office's insurers. 3 DAME SANDRA: Mm. 4 MR HENRY: I mean, that does not strike one, does it, as 5 a sort of courageous and independent voice saying, "We 6 must deal with this; though the heavens fall, we must 7 ensure that justice is done"? That indicates a somewhat 8 craven approach by the NEDs. 9 DAME SANDRA: As we discussed yesterday, we do think this 10 was a missed opportunity, and the other piece in our 11 evidence does draw a distinction: this word "challenge" 12 which is both critical challenge and constructive 13 challenge. And I think we did see evidence of what one 14 might call critical challenge on the way in which, in 15 their view, the report had been produced, and the 16 process by which it had been produced, but we did not 17 see the challenge into the basic assumptions, as you 18 indicate. 19 MR HENRY: The challenges, really, were more to do with the 20 amour propre of the NEDs being exposed and the fact that 21 this looked messy optically, that the Post Office had 22 lost control of the narrative, as it were? 23 DAME SANDRA: I think there is that theme. There is also, 24 as I understand it, their annoyance at them being 25 surprised by, for example, bugs, and they were -- as 20 1 I understand it, they were annoyed by that. They also, 2 as you indicate, asked questions about liability. 3 MR HENRY: Did you, in all of your researches, did you ever 4 get the impression that Paula Vennells, in particular, 5 did not want an optimal NED culture? Do you remember 6 the document where she said that she did not want the 7 NEDs to, as it were, have a bonding exercise? 8 DAME SANDRA: I do recall, I recall that phase -- that 9 phrase. 10 MR HENRY: I may have misquoted it, but let's have a look at 11 POL00411940. 12 DAME SANDRA: This is 2018? 13 MR HENRY: Yes, 2018. Do you see the paragraph beginning: 14 "I would remove entirely the NEDs as they will meet 15 them at dinner, and at the Board, and will arrange 121s 16 if they want to. We're not trying to create a team of 17 NEDs, the opposite in fact." 18 What's your view on that approach? 19 DAME SANDRA: I cannot say what was in the mind of 20 Ms Vennells when she wrote that. One construction would 21 be: we don't want a team of NEDs because we want their 22 independent challenge. We want really good independent 23 people who will speak their mind and their 24 responsibility isn't to form a team; their 25 responsibility is to be part of the unitary board, as 21 1 I explained, with the best interests of the company, and 2 to bring their independent expertise to bear. So that 3 would be one construction, which would be in a way 4 a completely legitimate and positive construction. 5 Another construction would be -- is we don't want 6 a close amalgam of NEDs as in this situation. 7 MR HENRY: Divide and rule? 8 DAME SANDRA: It could be that but I can't say. As I say, 9 there are two constructions. 10 Have you got any view on that? 11 DR STEWARD: I mean, I wouldn't call it "divide and rule", 12 I think there is quite often the case -- it can be very 13 problematic for executives if you have a team of NEDs 14 who refer to each other without referring to the 15 collective, and that the ambition of every board should 16 be for it to be as collective as possible. So I -- in 17 a sense, "We're not trying to create a team of NEDs" can 18 be interpreted as "We're not trying to create a two-tier 19 board". 20 MR HENRY: Could I now in conclusion, because I know quite 21 a lot of my time was eaten up but I want to stick to 22 10.15 as close as possible, but -- 23 SIR WYN WILLIAMS: I can't help it, I love it when Mr Henry 24 and Mr Stein edge themselves over the limit, with 25 ever-increasing ingenuity. 22 1 MR HENRY: Actually, sir, I think, in deference to you, and 2 particularly since we're under pressure of time, I shall 3 stop there. 4 SIR WYN WILLIAMS: Thank you. 5 Mr Stein? 6 Questioned by MR STEIN 7 MR STEIN: Thank you, Sir Wyn, for the introduction. 8 My name is Sam Stein and I represent a large number 9 of subpostmasters and also currently serving 10 subpostmasters. 11 Dame Sandra and Dr Steward, thank you for your work 12 on this matter, producing two reports, going through 13 a considerable body of material, we're grateful. 14 Governance and regulatory oversight. Now, what 15 regulations and governance can do is it can provide 16 a framework, is that correct, that -- 17 DAME SANDRA: That's true. 18 MR STEIN: -- supports hopefully good behaviour, moral 19 behaviour; do you agree with that? 20 DAME SANDRA: It provides a framework certainly, yes. 21 MR STEIN: The reason I think you may be hesitating, Dame 22 Sandra, is a framework doesn't necessarily dictate 23 an outcome, so if someone wants to be immoral, someone 24 wants to be dishonest, someone wants to work against the 25 interests of subpostmasters they can do, no matter what 23 1 the framework is: it's a choice? 2 DAME SANDRA: Again, human behaviour can be guided by 3 a whole range of different things, as well as the 4 framework in which they sit. 5 MR STEIN: So if individuals within what's happened in the 6 scandal, Ms Vennells, Ms van den Bogerd, the 7 Investigators, Mr Bradshaw and others, Jarnail Singh, if 8 they want to make choices that are either, I suppose, 9 immoral or dishonest or downright criminal, then it's up 10 to them, when it comes down to it. 11 DAME SANDRA: Yes, a framework cannot control behaviour. It 12 sets the boundaries and sets the expectations. 13 MR STEIN: You may be aware that, in the same amount of 14 time, the same period of time that we're talking about 15 for Second Sight, around 2013, where they're conducting 16 their investigations and making their report and they're 17 dealing and setting out the bugs, errors, defects that 18 they're finding, around that same time, the Post Office 19 was also seeking to try and achieve further financial 20 support from Government in -- to the tune of, I think -- 21 I think the figures are 1.34 billion. It's almost worth 22 repeating: 1.34 billion. 23 So you have these pressures upon the Post Office, 24 which are, you know, will it survive? Will it get the 25 money, into the future? Also, at the same time you've 24 1 got this bugs, errors and defects in its course systems 2 that are coming along. Those drivers, those attacks 3 upon the survival of the Post Office, it's not going to 4 necessarily going to be helpful to ensure good 5 behaviour; do you agree? 6 DAME SANDRA: You mean the -- if I just play back, you're 7 asking the question of does the pressure from getting 8 approval for Government of a large amount of money 9 impact people's behaviour in the organisation? 10 MR STEIN: Yes. 11 DAME SANDRA: It may do. It may not. 12 MR STEIN: It goes back to the question of choice, doesn't 13 it? 14 DAME SANDRA: Yes. 15 MR STEIN: Okay, so let's have a quick look, if we can, 16 please, at perhaps some of the governance principles and 17 what exists. We've not heard much about the Nolan 18 Principles as yet, so can I take you, please, to the 19 updated report, which is EXPG0000006_R. I'll be going 20 to page 95 of that report and, if we can go to 95 on our 21 screens, I'd be very grateful. What I'm going to be 22 asking you questions about Dame Sandra, Dr Steward, is 23 Nolan Principles and who they applied to within this 24 complex situation. 25 DAME SANDRA: Yes, yes. 25 1 MR STEIN: Is that page 95? 2 DAME SANDRA: It's the bottom of 95, yes. 3 MR STEIN: Bottom of 95, thank you. 4 So there we've got -- and we've got the two sides. 5 Now, the left-hand side, I'll put it crudely is 6 corporate commercial. 7 DAME SANDRA: That's right, yes. 8 MR STEIN: Right-hand side, if you like, more government. 9 Those are the two sides, so that's what we've got by way 10 of this schedule. We see there the Nolan Principles and 11 they're familiar to I think, us all, 1 to 7, they set 12 out basic standards of selflessness, integrity, 13 openness, accountability, honesty, leadership. These 14 are basic important principles. 15 DAME SANDRA: They are. 16 MR STEIN: Now, these Nolan Principles would apply, looking 17 at the sort of dates we're considering here, they were 18 in place from that period of time, 1995, and they apply, 19 therefore, when we think about the structure applicable 20 to the Post Office. At that time would they have 21 applied throughout the organisation -- this is 22 pre-split -- do you think? 23 DAME SANDRA: Yeah, I think -- I mean, it's a very technical 24 response I'm going to give. They would have applied to 25 those people who were told they applied to them. So 26 1 when one is appointed to public office, I believe from 2 1995 onwards you're quite clearly given these 3 principles, and -- but with regard to people employing 4 in the Post Office, without looking at their contracts 5 of employment, I'm afraid I cannot say whether they were 6 specifically required to note and to be told that they 7 should adopt them. I can't tell you that. 8 MR STEIN: So even pre-split, it's pretty complex because, 9 despite the fact it's a Government organisation, you've 10 got layers of different employees, Executive Directors, 11 and the question of whether this would apply might 12 depend on what's in their contract? 13 DAME SANDRA: Exactly. That's what I'm saying. That where 14 it's very clear that they apply, it's usually appended 15 to the contract. I can't say -- 16 MR STEIN: Okay. 17 Let's move onto the split so the Post Office becomes 18 a private company -- 19 DAME SANDRA: Mm-hm. 20 MR STEIN: -- owned by a single shareholder, as Ms Badenoch 21 said the other day, herself as Secretary of State, and 22 other Secretaries of State in their time. 23 DAME SANDRA: Yes. 24 MR STEIN: Now, this is where I almost have to crack my 25 knuckles with trying to work out the complexity. We've 27 1 got a very odd situation. We've got obviously 2 Government officials, to whom the Nolan Principles 3 apply. 4 DAME SANDRA: Indeed. 5 MR STEIN: Let's work our way down from top level 6 Government. We then have ShEx, that became UKGI. Now, 7 they are essentially the controlling body or arm of 8 state that is involved in the oversight of the Post 9 Office. Now, it applied to them as well. So those ShEx 10 and UKGI members on the Board, Nolan Principles should 11 apply; do we agree? 12 DAME SANDRA: Certainly ShEx. I would have to look and see 13 exactly what UKGI, again, contracts would have said. So 14 I could only speculate whether or not they would. 15 I perhaps should say that I'm very pleased you've 16 brought these Nolan Principles up because, reflecting 17 our side, I thought, "Oh, we hadn't discussed them". 18 And I think that, in terms of public life, in my 19 personal experience, they are very well known. 20 MR STEIN: It is, one would have thought and one would hope 21 frankly likely that the Nolan Principles would be 22 applied through UKGI, it being the body carrying on, if 23 you like, from ShEx? 24 DAME SANDRA: As I say, the specifics. I can't give you 25 an answer on the fact because I don't know the fact. 28 1 MR STEIN: Fingers crossed. Now, then if we move on 2 through, if you like, the structure that exists at that 3 time, the complexity then is that, at that stage when 4 the Post Office is split into its private role, it is 5 still, though, a body with a clear governmental social 6 purpose. We know the requirements and directives to the 7 Post Office is that they should provide a public 8 service, that they've got to keep open post offices up 9 and down the land, and they provide particular services, 10 even though that might be for that particular branch not 11 sustainable as a small business. Okay? 12 DAME SANDRA: Yes. 13 MR STEIN: So we've got this complex picture. It's 14 a private company that is carrying out a social purpose 15 on behalf of the State. But it doesn't seem to have, 16 buried within its ethos, the Nolan principles as 17 a private body. Is that a fair or a bad description? 18 DAME SANDRA: In the documents that I have seen of the Post 19 Office of 2013, in those that I have seen, I haven't 20 seen reference to the Nolan Principles. However, as the 21 appointments, particularly at the Board, had to be 22 approved by the Secretary of State, it's possible that 23 in those appointments there was direction to the Nolan 24 Principles because the appointments were made by the 25 Secretary of State. They weren't -- well, they were 29 1 approved by the Secretary of State on the recommendation 2 of the -- on the recommendation of the Board. 3 MR STEIN: Dame Sandra, I agree and I'm not convinced, and 4 no doubt I'll be corrected by voices around me, but I'm 5 not convinced we actually know the answer to: do the 6 Directors, Chair, and so on, at particular times have 7 these Nolan Principles drawn to their attention on their 8 appointment. So we may learn that at a later stage. 9 DAME SANDRA: Mm, mm. 10 MR STEIN: Can I take you to page 88 of the same document, 11 please. It's a reference to the culture of 12 organisations within, and your questions. 13 DAME SANDRA: Yeah. 14 MR STEIN: So what we've been discussing is on the culture 15 of their organisations, when, if at all, did the 16 executives or boards have written statements on values, 17 codes of conducts and behaviour, which are available to 18 all employees. Our discussion has been about this, 19 hasn't it? It's been about whether you've been able to 20 find, whether it is available, the types of guides and 21 protocols or codes of conduct that may have provided 22 some support for a positive culture. Have you found 23 documents that answered these questions? 24 DAME SANDRA: We didn't -- when we wrote report number 1 and 25 we were trying to assist the Inquiry by showing the 30 1 frameworks of governance and expected standards, we 2 identified a number of questions. When we came to write 3 report number 2, we simply -- we could have spent five 4 years seeking through your evidence to answer these 5 questions. We didn't have five years -- five years full 6 time. So we didn't take these as questions for us, when 7 we sought to answer them. 8 With regard to the specific question about written 9 statements of values, codes of conducts and behaviours, 10 certainly in the -- I think it's the 2015 job 11 description of the General Counsel, which happened -- 12 which was one of pieces we looked at, there is 13 a statement of behaviours and there are -- there is 14 a statement of values. It's an empirical question. 15 Do you want to add? 16 MR STEIN: You've turned neatly -- 17 I'm sorry, Dr Steward. 18 DAME SANDRA: I just wanted to check. 19 DR STEWARD: I was just going to say that the process is 20 exactly as Sandra described it, these questions for the 21 Inquiry. 22 MR STEIN: Dame Sandra, you helpfully mentioned general 23 counsel, which is my next topic. 24 From your evidence there is no actual requirement 25 within the Post Office for general counsel to attend 31 1 board meetings. They don't have to and they're not 2 required to. 3 DAME SANDRA: As I tried to explain, it is really a matter 4 for the board to decide how they want to relate to their 5 general counsel. Sometimes, occasionally, I think it's 6 about 20 per cent now, might be actually members of the 7 board. A larger proportion would have the general 8 counsel in attendance, and some of them would have the 9 general counsel coming in just for specific matters. 10 MR STEIN: Focusing on POL as an arm's-length body to start 11 with, and then I'll move on to then the general question 12 about arm's-length bodies, so POL to start off with, 13 should general counsel, within the Post Office, be 14 a Board appointment? 15 DAME SANDRA: There is no "should" about that. It's 16 a matter for choice. 17 MR STEIN: Would you recommend? 18 DAME SANDRA: I would recommend that the General Counsel was 19 present. I would not recommend or not recommend -- 20 I would neither recommend nor not recommendation that 21 they stood be a member of the Board because I think 22 that's a question for the Board. 23 MR STEIN: So the key recommendation is -- 24 DAME SANDRA: For me, my personal view is that I would like 25 to have the General Counsel normally present in Board 32 1 meetings. 2 MR STEIN: Dr Steward, I understand the way this works. You 3 agree by silence. Further silence. 4 DAME SANDRA: I think I've said what I -- I think I've made 5 clear what I think. I hope I've made clear what 6 I think. 7 MR STEIN: You were asked a question by Mr Beer yesterday, 8 and I think your answer was it's outside of your 9 knowledge. You don't have knowledge of, if you like, 10 the status of general counsel, whether they actually 11 have to be a practising lawyer -- 12 DAME SANDRA: No, all I can say is that, in all my 13 experience, all the general counsels I've known have 14 been practising lawyers. 15 MR STEIN: Are you surprised to learn, therefore, that there 16 is no requirement for general counsel across 17 companies -- 18 DAME SANDRA: And they are called -- I beg your pardon -- 19 they are called general counsel? 20 MR STEIN: Yes. 21 DAME SANDRA: I'm surprised. 22 MR STEIN: The answer to this is that there are people that 23 are capable of describing themselves as lawyers who are 24 actually outside of the regulatory requirements by the 25 different regulatory bodies, the Bar Standards Board, 33 1 the SRA and others. 2 DAME SANDRA: I am unfamiliar with that. 3 MR STEIN: The other types of lawyers that can be appointed 4 as general counsel generally, could be a lawyer with 5 a qualification or practising certificate abroad, in 6 other words not applicable here. 7 DAME SANDRA: I think that would be a special case which 8 would be considered but, as I say, this not my area of 9 expertise. 10 MR STEIN: No, and in relation to the practice of a general 11 counsel, as a lawyer, do you know whether what they do 12 when they are working as general counsel, whether that 13 is governed in the same way as my practice, as 14 a barrister is; do you know about the regulatory 15 requirements in relation to their types of practice? 16 DAME SANDRA: I know in principle and in general. 17 MR STEIN: So you're aware that I operate and all practising 18 barristers and solicitors with practising certificates, 19 we operate under a code of conduct essentially which 20 governs our work on reserved activities, in other words 21 going to courts, addressing courts, giving legal advice. 22 But the work of general counsel is not covered within 23 reserved activities. Are you aware of that distinction, 24 that they essentially occupy this oddity, as general 25 counsel, don't have to be lawyers, doing work that is 34 1 not directly referenced by their regulators? 2 DAME SANDRA: As I say, not my area of expertise. Does any 3 of this apply to the Post Office? 4 MR STEIN: Well, it would apply in terms of the practice of 5 general counsel, generally, yes. 6 DAME SANDRA: I understand it would apply -- well, anyway 7 it's not for me to ask the questions. 8 MR STEIN: Right. 9 SIR WYN WILLIAMS: As a matter of fact, just in case I'm 10 missing something, all the relevant general counsel were 11 practising lawyers, were they not? 12 MR STEIN: We believe that's right but the question, 13 actually -- 14 SIR WYN WILLIAMS: No, I -- 15 MR STEIN: -- to their work as general counsel and whether 16 that itself is governed by reserved -- 17 SIR WYN WILLIAMS: No, I follow what you're saying but 18 I just didn't want to widen my area of investigation to 19 even discover whether there was a general counsel who 20 wasn't a practising lawyer. I don't think there is. 21 MR STEIN: Now, you've discussed with me and indeed 22 yesterday with Mr Beer, and your evidence was that the 23 normal expectation is that General Counsel would at 24 least have an informal dotted line to the Chair, and 25 we've discussed that. You also discussed how these 35 1 relationships actually work, work of General Counsel 2 actually work, it's going to depend upon the body in 3 which the organisation works and how that develops. 4 When considering the questions such as General 5 Counsel and bringing to the attention of the Board 6 something like the Simon Clarke Advice, is there, in 7 general corporate practice, a reason to think that 8 privileged documents, documents subject to legal 9 privilege, are not brought to the attention of boards? 10 Now, I note, Dame Sandra and, I think, Dr Steward, you 11 both have very strong experience of working on boards. 12 DAME SANDRA: Yes. 13 MR STEIN: Dame Sandra, I think I saw quite a long list of 14 boards that you've been a member of. So privileged 15 documents such as the Simon Clarke Advice, any reason 16 why it can't go to Board? 17 DAME SANDRA: In my experience, I have seen quite a number 18 of privileged documents which come to the board and 19 which the board is taken within the circle of privilege. 20 And so that has been my experience. I have never, in my 21 experience, not seen a document, as far as I know. Of 22 course it's difficult to know what you've not seen, but 23 I've not seen a document where I have been unable, or 24 I've not known of a document, where, as a board member, 25 I've not been able to access it. 36 1 MR STEIN: Perhaps emphasising what happened within the Post 2 Office scandal, some legal advices, such as the Simon 3 Clarke Advices may be more important than others. 4 DAME SANDRA: Mm-hm. 5 MR STEIN: Mr Clarke's Advices, in relation to what had been 6 discovered by Mr Clarke and his colleagues regarding 7 what they thought was the activities of Mr Jenkins, this 8 seems to be at the higher end of importance. 9 DAME SANDRA: Mm, mm. 10 MR STEIN: So, even if there had been any sort of hesitation 11 regarding privilege, this should have gone to the Board? 12 DAME SANDRA: In regard to that -- the Simon Clarke Advice 13 that we looked at, that was never said to be privileged, 14 was it, I don't believe. So the reason, if you see what 15 I mean -- you're asking me a question -- 16 MR STEIN: I do agree. 17 DAME SANDRA: -- which is not directly relevant to that. 18 MR STEIN: I understand. Essentially, that doesn't seem to 19 have been expressed to be the barrier. 20 DAME SANDRA: Exactly. 21 MR STEIN: Now, as a body, the Post Office has, as I think 22 you commented briefly yesterday, it's one of the oldest, 23 if not the oldest, country-wide bodies in existence. It 24 was, before separation, a Government body. We've got 25 also another peculiarity about the Post Office, which is 37 1 that the dependence of the working on the Horizon system 2 is run by a third party, Fujitsu. 3 We seem to have a structure which is peculiar, in 4 other words that you've got, first of all, a body that, 5 in the matters that we're often referring to, 6 prosecutions, as an example, it prosecuted -- it was 7 a prosecuting authority; its systems that related to 8 data that were to be used within prosecution system was 9 run by a third party, Fujitsu; it was a body that's 10 a private body from the time of separation, using 11 corporate jargon, you'll forgive me, with some type of 12 dotted line towards Government. 13 DAME SANDRA: Mm. 14 MR STEIN: It seemed to be operating in a -- is it a unique 15 organisation in your experiences? 16 DAME SANDRA: The relationship between the corporation and 17 Fujitsu, as far as I'm aware is not unusual. I mean, 18 PFIs and other forms, other -- there may be a dependence 19 upon the supplier and the maintainer of the system 20 through contractual relationships. As we've seen, 21 arm's-length bodies, and I think you've heard evidence, 22 the length of the arm can vary from inches to yards. So 23 I think, I couldn't say is this absolutely unique? It's 24 certainly complex and it's certainly, with a long and 25 complex history. 38 1 MR STEIN: Can we go, please, to your second report, 2 EXPG0000010, Dame Sandra, Dr Steward, page 40, please, 3 within the hard copy, and indeed on screen hopefully. 4 So I'll be looking at paragraph 140 as well. So 5 page 40, 140. 6 So I've asked you a question about the peculiarities 7 of the operating system and the way that it appears, 8 then your view, from looking at the evidence, it seemed 9 to you that the culture of POL did not encouraging 10 listening or learning from subpostmasters. 11 Now, we've got example of that, a helpline that has 12 been described as the "unhelpful line", being told to 13 pay up rather than answer people's queries about 14 problems within the system, so that appears to be the 15 evidence that appears to be behind at least part of this 16 thinking. 17 Paragraph 145, page 41, this was referred to 18 yesterday, that: 19 "So deep were the assumptions embedded in the 20 culture of the organisation, so corrosive was the 21 company ethos that the Board did not call the Executive 22 to account to face up to POL's role in perpetuating the 23 miscarriages of justice which were increasingly evident 24 to others." 25 Now, the miscarriages of justice that you're 39 1 referring to, we need to be careful, don't we, because 2 we are aware of the miscarriages of justice that went 3 through the courts, that were looked at in the criminal 4 courts of appeal and convictions overturned, but there's 5 also the miscarriages of justice that went through the 6 civil courts -- 7 DAME SANDRA: Mm-hm. 8 MR STEIN: -- that were referred to in the High Court. Then 9 there's the miscarriages of justice that also occurred 10 as a result of audits, audits carried out by the Post 11 Office, which would close people's branches down without 12 the intervention of the courts, either civil or criminal 13 courts. 14 So these injustices, that you're referring to, the 15 miscarriages of justice, are not just about court 16 results and behaviour in prosecution, either civil or 17 criminal; do you agree with that? 18 DAME SANDRA: We agree. 19 Do you agree? 20 DR STEWARD: Yes. 21 MR STEIN: So hopefully you will agree that, in order, in 22 fact, to try and ensure that an organisation holds true 23 to values of honesty, trust and duty, this needs to 24 be -- these values, this culture, change that clearly 25 has to go from a corrosive culture to something that is 40 1 the opposite, there has to be significant organisational 2 change? 3 DAME SANDRA: We feel strongly, I think, that significant 4 cultural change, certainly from this, is required. 5 MR STEIN: Now, one of the aspects of cultural change and 6 about people finding a voice is whistleblowing. Okay. 7 DAME SANDRA: Mm-hm. 8 MR STEIN: Whistleblowing is not new, it's been discussed. 9 I noted in your chart, it's, in fact, going back to 10 pre-2000, the -- 11 DAME SANDRA: Yes, the 1996 Public Interest Disclosure Act, 12 as we talked about, which gives employment rights for 13 whistleblowing. 14 MR STEIN: I'm going to quote from a footnote in Christopher 15 Hodges book, Law and Corporate Behaviour, which is the 16 2015 edition, which is important for context of these 17 matters. 18 DAME SANDRA: Yes. 19 MR STEIN: For anybody that wished to look at it, it's 20 page 527 of that work, it's a quote from a quote. So 21 it's from "Whistleblowing and Corporate Governance: the 22 Role of Internal Audit in Whistleblowing". It says 23 this: 24 "There is a symbiotic relationship between 25 whistleblowing and an organisation's culture. Effective 41 1 internal whistleblowing arrangements are an important 2 part of a healthy corporate culture, but it is also 3 crucial to have the right organisational culture, which 4 encourages people to speak out without fear." 5 Now, I've chosen that quote because it emphasises 6 the importance of whistleblowing. I can take you, if 7 you wish, to where you deal with this within I think 8 it's your first report, but perhaps I don't need to go 9 to the page. Why is whistleblowing so important? What 10 does it do to an organisation to actually change 11 culture? 12 DAME SANDRA: If it works well, people don't fear for their 13 livelihood or their job or their prospects, if they see 14 something which they believe is in the public interest 15 for them to reveal. It mustn't be a personal grievance, 16 if I feel very aggrieved by something I must take that 17 through a grievance procedure, as an individual, but if 18 I feel there is a wider public interest and people 19 should know about any element of wrongdoing or behaviour 20 or, even nowadays, spoken harassment, which of course is 21 against the law, that there should be a right to do 22 that. And, increasingly, although it's been there since 23 1996, that right to protection, of course, anyone could 24 speak up since the year dot but they might not have had 25 that protection, so the protection of the Public 42 1 Interest Act is important. 2 And I think that, in my experience, both in terms of 3 codes of guidance and in terms of board's attention, 4 there has been a greater attempt to try to make sure 5 that one has systems in place to ensure that there is 6 strength behind the possibility that people could speak 7 up, so the requirement for whistleblowing champions, for 8 example. 9 But it's fundamental to hear the voices without 10 fear, to a healthy culture. 11 Do you want to -- 12 DR STEWARD: I think -- I mean, your quote from the book, 13 I think it shows two sides of the coin and that 14 whistleblowing is, if you like, that is the legal 15 process, that is the route by which, if I have a genuine 16 concern about something which is against the public 17 interest, a poorly performing surgeon, or a genuine 18 occlusion of facts, then I have the route to be able to 19 take that without fear of losing my job or of being 20 bullied, or whatever. 21 The other side of the coin is a culture in which, at 22 every level, there is an expectation that people will be 23 able to talk about things which are going wrong. If you 24 like, there is an expectation of being able to speak up, 25 but those things are -- it is quite important, I think, 43 1 for organisations to distinguish between the 2 whistleblowing and the talking about grievances which 3 are about things that happen in my team or things that 4 happen in the workplace, and that's a cultural and 5 leadership issue. 6 They join at the top because you want to have 7 an organisation in which speaking up is -- 8 MR STEIN: Dr Steward, I'm very grateful for that. I'm 9 going to just come back to that in one moment. 10 I'm just going to stay with, if you like, classic 11 whistleblowing and another quote, this time from 12 Professor Hodges himself: 13 "Whistleblowing has been said to involve 14 a triangular relationship between the reporting 15 individual, the detected organisational misconduct at 16 a particular institutional setting, and the regulatory 17 regime that defines the contours of legality." 18 I think what the good professor is saying is that 19 whistleblowing needs to involve someone's ability to be 20 able to report organisational misconduct but not 21 necessarily directly back to the very self-same 22 organisation that they distrust. Within the Post 23 Office, we know that there are whistleblowing champions. 24 Is there anything, given the background, to ensure that 25 there is an outside route? 44 1 DAME SANDRA: The point you're making is that, if you want 2 to report wrongdoing, then it's clearly inappropriate 3 you report that wrongdoing to the person who is doing 4 the wrong. And there have always been arrangements by 5 which you could circumvent that. 6 I think you're asking is there a need for an 7 extra organisational route -- 8 MR STEIN: Within the Post Office, it's about -- 9 DAME SANDRA: Within the Post Office itself because that 10 really comes to the Post Office of today, which we 11 haven't paid -- which, you know, is outside the scope of 12 our report. And it's, of course, a matter of opinion. 13 My personal view is that the more you outsource, the 14 less you absolutely require the board and the executive 15 to take responsibility themselves, and so I would be 16 cautious about having an external route. I would need 17 to understand really why it was necessary but I would, 18 above all, like the responsibilities for making sure 19 that whistleblowing is effective to be really held by 20 the Executive and the Board of the Post Office. 21 MR STEIN: Dame Sandra, we're in a situation whereby we are 22 learning today, and we will learn, it seems, next year, 23 more details about the organisational changes. But 24 these are matters that essentially we are asking Sir Wyn 25 to take into account to consider when we learn more 45 1 detail. 2 DAME SANDRA: Yes, but you take -- my point is clear. 3 I want strong whistleblowing in my view, but I do feel 4 the responsibility for that should be strongly felt by 5 those who are running the Post Office. 6 MR STEIN: Dr Steward, addressing the point you made before 7 I went to, if you like, the classic routes for 8 whistleblowing: essentially whistleblowing provides 9 a route for individuals to be able to make complaints, 10 hopefully without fear, there are issues regarding the 11 statutory regulation as apply, I think, to employees, 12 not necessarily to contractors or individuals that are 13 self-employed. So there are issues regarding the law at 14 the moment. 15 But Dr Steward, you were talking about that 16 whistleblowing is one aspect of matters. What is 17 required? Again, I'll quote from Professor Hodges: 18 "Accordingly, official recommendations stress the 19 need for best practice in policies, accountability, 20 governance, multiple routes for information, including 21 the line management, leapfrogging Human Resources audit, 22 audit committees, directors, external routes, feedback 23 on publication after reporting, providing reassurance, 24 briefing managers, checking awareness of staff." 25 Unless I misunderstand what Professor Hodges is 46 1 saying, that whistleblowing, yes, strong and important 2 for any organisation and its culture, but also there 3 must be the ability in a strong moral company for people 4 to be able to speak up and speak to other people and 5 find others that will listen to them. 6 DR STEWARD: I mean, nobody would contest with that, I don't 7 think at all. I think the difficulty is that you can 8 have a formal process, but people will not use it, 9 unless they believe that there is -- that it will work 10 for them. So of the two words that come to mind when 11 people talk about whistleblowing is "fear" and 12 "futility"; "If I speak up, will I be penalised? If 13 I speak up, will anything happen?" 14 So just having the process and just having 15 an external body wouldn't, I don't think, provide the 16 full assurance that the organisation itself had owned 17 what it was going to take to make whistleblowing work. 18 And I think that's Sandra's point, that it would need to 19 be discussed by the Executive and the Board that this is 20 something that we want to make happen in our 21 organisation and make work, make real. 22 MR STEIN: My last topic is duty of candour. Now, this is 23 discussed variously, Hillsborough Law, this has been 24 discussed in other reports from other inquiries this 25 year, Grenfell Inquiry report, the Blood Inquiry report, 47 1 the duty of candour and its applicability. 2 Do you see that the duty of candour, which is a duty 3 to not just tell the truth, which is not a bad idea, but 4 also a wider duty to actually investigate, look at 5 things in more detail -- you know, instead of just 6 giving a standard answer, actually look at what there is 7 by way of evidence and information -- do you see that 8 that duty of candour should apply to a body such as the 9 Post Office which is a hybrid, private/Government body? 10 DAME SANDRA: Do you want to go? 11 DR STEWARD: I'm going to go back a step to the conversation 12 that you had before you got into the specifics of the 13 General Counsel role, and, at that point, I think we 14 were debating the Nolan Principles versus the commercial 15 governance model. Yesterday we drew attention to 16 a paragraph in our report which said that we felt that 17 the governance was underdeveloped or we had heard from 18 numerous Non-Executives that the governance of the Post 19 Office was underdeveloped at the point. If it is 20 underdeveloped, then all of the frameworks, the risk 21 frameworks, the values frameworks, what sort of 22 leadership we want, Nolan Principles or a code of 23 ethics, those will be underdeveloped. 24 So in a sense, irrespective of which framework, it 25 wasn't yet at a stage, it felt to me, where those 48 1 frameworks were really driving behaviours. And that 2 could apply as much to the risk management as to the 3 Nolan Principles. 4 So this question, which you were going to answer ... 5 DAME SANDRA: Well, I think on the duty of candour, the 6 question of "legally, should it apply" is a matter for 7 those who make the law. With regard to the duty of 8 candour, as I understand it, and of course it does apply 9 in health and social work as well -- 10 MR STEIN: The NHS, yes. 11 DAME SANDRA: Yes -- 12 MR STEIN: Ministerial departments rather more complex. 13 DAME SANDRA: Yes. 14 MR STEIN: In other words, the answer is no. 15 DAME SANDRA: Sorry -- 16 MR STEIN: At a ministerial level and departments the 17 question of the duty of candour's application is 18 a little bit more debatable. There are other governance 19 structures that arguably support better behaviour. 20 DAME SANDRA: If I could rephrase the question, which I'll 21 answer, should the meaning of candour apply to the 22 values within the Post Office? Yes, in my view it 23 should. Whether or not that is a duty of candour and 24 how that would be applied, I cannot say. But the 25 candour, in the terms as you say, not simply answering 49 1 the face value question, as far as boards are concerned 2 is a requirement to delve deeper. 3 MR STEIN: Excuse me one moment -- sorry? 4 DR STEWARD: The duty of candour needs to be matched with 5 a duty to listen. I mean, the candour puts 6 an obligation duty on me to speak up if I see something 7 wrong; there needs to be an obligation, corresponding 8 duty. 9 MR STEIN: One moment, please. Thank you very much. 10 SIR WYN WILLIAMS: Thank you, Mr Stein. 11 I just want to ask you to go back, if you would, to 12 the Nolan Principles. Not in the context of whether, 13 almost as a matter of process, they would apply, but how 14 they relate to what you would expect of the behaviour of 15 a director. 16 DAME SANDRA: Yes, they well describe it. I mean, I would 17 expect exactly -- 18 SIR WYN WILLIAMS: Well, it was striking me -- I'm not 19 a company lawyer but I've got a reasonable grasp of 20 what's involved. Effectively, those seven principles 21 are summing-up how a director of a company should 22 behave, are they not? 23 DAME SANDRA: Whether they're exhaustive, I can't say -- 24 SIR WYN WILLIAMS: No, sure. 25 DAME SANDRA: -- but one could not argue that those 50 1 principles should not apply. One would argue that they 2 should apply. 3 SIR WYN WILLIAMS: Fine, thank you. 4 DAME SANDRA: In the spirit of being a director. 5 SIR WYN WILLIAMS: Fine, thanks very much. 6 Well, we're on our best behaviour, Mr Beer, in terms 7 of timing, so we'll take our morning break, I take it 8 now. 9 MR BEER: 11.10, please. 10 MR STEIN: Sir, I'm sorry for letting you down on that. 11 SIR WYN WILLIAMS: You never cease to amaze me, Mr Stein. 12 (10.55 am) 13 (A short break) 14 (11.11 am) 15 MR BEER: Have you got a proper line of sight to everyone 16 you need to see there, Mr Moloney? 17 Questioned by MR MOLONEY 18 MR MOLONEY: (Microphone muted) and I promise to take much 19 longer than I said I will, sir, just to ... 20 SIR WYN WILLIAMS: There's been a running joke: Mr Moloney 21 on the whole keeps to time. Now he's defying me. 22 That's all. 23 MR MOLONEY: Dame Sandra and Dr Steward, I've three matters 24 to ask you about, if I may. Firstly, institutional 25 memory; secondly, a specific aspect of the role of the 51 1 company's secretary; and, thirdly and finally, 2 overboarding. 3 So taking them in turn, if I may, institutional 4 memory first. The Inquiry has heard evidence from 5 a number of individuals who were both involved in the 6 development and rollout of Horizon, and then in the 7 later operation of the business. So for example, you 8 identified the role of Mr Miller, then the Chief 9 Operating Officer in the Cleveleys case that you looked 10 at. 11 I'd like to ask you about institutional memory, and 12 how that should function within a business where you 13 have people who work through a considerable time. 14 Generally, is there a responsibility to ensure that, 15 within any effective governance model, institutional 16 memory concerning risk is preserved? 17 DAME SANDRA: In principle, there is undoubtedly good 18 practice that institutional memory with regard to risk 19 should be maintained and should be built on. In 20 practice, it's often difficult in organisations. So 21 one -- I can't say that there are many ideal examples 22 where things are not forgotten, and the question is: how 23 do you reduce the possibility of them being forgotten? 24 And systematic induction and training, which is informed 25 from the past, can be one way, and policies which -- by 52 1 which I mean not policies which sit on a shelf, are 2 ticked off every year and not regarded, but policies 3 which really are made real in the organisation are 4 another way because those policies, which now, in good 5 practice, should be renewed -- reviewed at certain 6 periods, maybe annually, maybe twice, every two years, 7 maybe every three years. That very process of policy 8 enunciation, review and implementation can help with 9 maintaining institutional memory. 10 On the other hand, I think there probably is no 11 organisation in the land where something is done and 12 someone says, "Oh, we did that 10 years ago and we 13 didn't learn the lessons", or "we did learn the 14 lessons". So it's a very difficult thing to maintain 15 but it is vitally important to try to do so. 16 MR MOLONEY: I suppose the nature of that risk would inform 17 the absolute necessity to ensure that that risk was 18 monitored? 19 DAME SANDRA: The build of risk registers, the build of 20 understanding of where the risks are, and if -- you 21 can't just forget risks, they're on a register, and you 22 should then be able to see what's happened to them. You 23 may decide to take them off because you may decide 24 they're no longer relevant, but forgetting major risks 25 is a major problem. 53 1 MR MOLONEY: So the types of processes, Dame Sandra and 2 Dr Steward, would be risk registers, as you've already 3 mentioned, that's one way of ensuring that an important 4 risk is not forgotten, also perhaps operational 5 management and monitoring of those risk registers, 6 making sure that there are proper structures in place to 7 ensure that those risk registers are effectively 8 monitored. 9 DAME SANDRA: The risk management, identification, 10 mitigation process, the risk management framework, is 11 very important in that regard. 12 Do you want add to anything? 13 DR STEWARD: No, I mean, I was going to simply make the 14 point that stories -- stories and the stories which 15 people tell in organisations tend to become the 16 institutional memory as much as the hardwired risk 17 management processes, which is why you need the risk 18 processes. 19 MR MOLONEY: Of course and, essentially, a management of 20 risk flow, as you describe in your report. 21 But, in terms of stories, we know that there was 22 a history of problems, of bugs, errors and defects in 23 the development of Horizon. This is why I asked you 24 about the nature of the risk and the extent to which the 25 nature of the risk would inform the necessity to monitor 54 1 that risk. With that history of bugs, errors and 2 defects in the development of Horizon, would you have 3 expected that kind of information to have been brought 4 to the attention of the Executive, and/or the Board when 5 apparently similar problems appeared after the rollout 6 of Horizon, when Horizon was being operated in 10,000 or 7 so branches across the country? 8 DAME SANDRA: We would certainly have expected that there 9 was discussion, that there was sharing and that, 10 particularly once we got to Second Sight in 2013, which 11 was, as you know, a case that we've looked at, that 12 there was sufficient there for it to be collectively 13 looked at. 14 DR STEWARD: Yes. 15 MR MOLONEY: Are you aware that many witnesses in the 16 Inquiry have said that they knew nothing about the 17 problems and developments in the rollout of Horizon 18 identified in Phase 2 of this Inquiry? 19 DAME SANDRA: In general terms, yes. 20 MR MOLONEY: Are you surprised about that institutional 21 amnesia within an organisation like Post Office? 22 DAME SANDRA: I am surprised. 23 MR MOLONEY: In that case, can I take it one further: does 24 it beggar belief? 25 DAME SANDRA: I think I'll stick at "surprised". 55 1 MR MOLONEY: Stick at surprised, thank you. Okay. 2 Can I ask you about the Company Secretary and you 3 were asked by Mr Beer yesterday about the role of the 4 Company Secretary in relation to the Board, including as 5 regards responsibility for governance and compliance 6 with legal obligations. You dealt with the division of 7 responsibility between the General Counsel and the 8 Company Secretary. 9 DAME SANDRA: I did, within the context that the Company 10 Secretary has duties within the Code and the General 11 Counsel does not. 12 MR MOLONEY: Of course, of course. The Inquiry heard 13 evidence from a Mr Jonathan Evans, who was the Company 14 Secretary at Royal Mail Group. I don't know if you've 15 come across his name during the course of your 16 researches. 17 DAME SANDRA: We haven't looked at his evidence. 18 MR MOLONEY: You have? 19 DAME SANDRA: We haven't looked at his evidence. 20 MR MOLONEY: I don't need to take you to his evidence, 21 really. I don't need to take you to his evidence, I'll 22 just give you a very brief summary though of what he 23 said. Prior to his appointment as Company Secretary, 24 he'd been Network Director at POCL, Post Office Counters 25 Limited, during the development of Horizon and, after 56 1 taking up the Company Secretary role, he remained in 2 post at POL and RMG as Company Secretary until 2010. So 3 that's -- 4 DAME SANDRA: Until 2010? 5 MR MOLONEY: Yes. So, as it were, he's there as the Network 6 Director at POCL, during the development of Horizon, and 7 he stays in post until 2010, where he's Company 8 Secretary at POL and RMG. He gave evidence that lawyers 9 reported to him at times during that time in post. 10 You've observed that, before separation, there was 11 a dual accountability for prosecutions shared by RMG and 12 POL. 13 DAME SANDRA: Mm-hm. 14 MR MOLONEY: Would there have been any responsibility on the 15 Company Secretary, or anybody else, to ensure that both 16 Boards, that's RMG and POL, were adequately informed of 17 the duties of POL, the duties that POL owed as 18 a prosecutor, and the steps being taken within the 19 business to discharge those duties and protect the 20 reputation of the business? 21 DAME SANDRA: As I say, we've not looked in detail at this, 22 or even really in no detail. But with regard to the 23 specifics of the duties of the POL Board versus that of 24 RMG, POL was a subsidiary of the Royal Mail Holdings 25 Group and, as such, the nature of the board that it had 57 1 was a matter for decision by RMG. I mean, there was no 2 requirement, as we saw, that they should have 3 independent non-executive directors, they could have 4 chosen to have an executive board. So the structure was 5 within the holding company, within their thing. POL 6 couldn't say, "We must have X" because that was not 7 their accountability. 8 Having said that, then the role of the Company 9 Secretary is very much in terms of the administration 10 and the running of the Board and the maintaining of 11 account of the frameworks and codes and laws in 12 practice. 13 Where an individual has knowledge about -- not about 14 the governance framework but about whether or not X has 15 happened in the business, one would normally expect what 16 X knew about the business to inform his or her 17 discussion about matters in the Board, but I don't think 18 you can say there is the direct requirement. You might 19 say there is an expectation. 20 MR MOLONEY: Around prosecutions, obviously, prosecutions by 21 a private body, private/public body -- 22 DAME SANDRA: Yes. 23 MR MOLONEY: -- as private prosecutions, not simply 24 reporting to a public prosecutor -- 25 DAME SANDRA: Yes. 58 1 MR MOLONEY: -- with the central involvement of POL in those 2 prosecutions -- it's subpostmasters or postmasters who 3 work for POL who were being prosecuted -- would you have 4 expected, essentially, the POL Board to have been 5 properly informed about the nature of those prosecutions 6 going forward, prior to separation? 7 DAME SANDRA: We have said, I believe, and I think we said 8 or implied this yesterday, that in our view there was 9 a lack of clarity about that responsibility and what the 10 responsibility really entailed, with regard to being 11 a prosecuting authority in this is hybrid way, and we 12 remain surprised, and it appears to us to have been 13 a very important part of Post Office operations, which 14 we're surprised there wasn't clarity and there wasn't 15 quite clear and strong reporting. 16 MR MOLONEY: Thank you. Can I finally ask you about 17 overboarding and the individuals who were appointed to 18 the Chairmanship and the Board of RMG and POL, were 19 generally very experienced individuals, many of whom had 20 portfolio careers towards retirement. That isn't 21 an unusual practice, is it, Dame Sandra? 22 DAME SANDRA: Not unusual at all. 23 MR MOLONEY: Essentially, experience and the name, those are 24 attractive commodities, aren't they, for people being 25 recruited to boards? 59 1 DAME SANDRA: Sorry, I didn't catch that. 2 MR MOLONEY: Having experience, having a profile, attractive 3 commodities, as it were, for people being recruited. 4 DAME SANDRA: Apparently. 5 MR MOLONEY: People often develop a portfolio of such 6 appointments? 7 DAME SANDRA: They do. 8 MR MOLONEY: The Inquiry has seen, in Post Office's case, 9 an example of accountability: the approach taken to the 10 nuclear option of the removal of Mr Staunton. Aside 11 from that sort of nuclear option, what checks are there 12 on the performance of directors in role? 13 DAME SANDRA: Of course we're dealing with a large 20-year 14 period and that which we would expect now probably 15 wasn't current at the beginning and, in the middle, it 16 would be half and half. Now, there is very clear 17 requirement to report one's other directorships in the 18 annual report and, in the recruitment of non-executive 19 directors, the question is always asked about do you 20 have the time? And so there is an initial -- and 21 I think the question would have been asked definitely in 22 2013, "Do you have the time to fulfil this role?" 23 So there's an initial exchange between the 24 institution and the person about whether or not they 25 have the time. 60 1 MR MOLONEY: Can I stop you there, Dame Sandra, just for 2 a moment because the question I'm asking at the moment 3 is not about at the appointment stage: it's more 4 a question of when in role and about what checks there 5 are on directors when they are in role. So, for 6 example, whether or not there is any mandatory training 7 or continual professional development whilst in role, or 8 any appraisal system whilst in role. 9 DAME SANDRA: I began by talking about the appointment 10 because that is, if you like, the initial contract, 11 and -- the initial implicit contract between the 12 individual and the organisation. With regard to -- I've 13 talked already, I believe, about induction and training, 14 which is extremely important, and then with regard to 15 their performance of the role, it's normal to have board 16 evaluations every -- the periodicity changes but it may 17 be every one, every two or every three years, sometimes 18 involving external facilitation. And in that, a good 19 board effectiveness, you not only give your overall 20 views on the effectiveness of the board but one is 21 normally asked about the effectiveness of individuals, 22 anonymously. I mean, they don't -- Dr Steward will not 23 say, "I think Dame Sandra is" -- she won't name me but 24 she'll give her view on my performance. 25 And, again, in my experience, where it's felt that 61 1 someone really isn't given the time or isn't on top of 2 the role, then the chair would have a discussion with 3 them. But with regard to mandatory requirements, 4 I think it is left with the board. There have, from 5 time to time, been no chairman can be chairman of more 6 than one FTSE 350 company at a time, but that at the 7 moment is a bit more relaxed. 8 MR MOLONEY: But essentially, in terms of performance 9 management, if I can use that generic term, then it 10 essentially comes down to the observations of executive 11 directors and other non-executive directors as to the 12 performance of a director? 13 DAME SANDRA: Of board peers, yes. 14 MR MOLONEY: Yes, and perhaps somebody raising a red flag 15 about somebody? 16 DAME SANDRA: More likely at the beginning, a quiet 17 conversation, "we're worried you don't read the papers 18 we're worried you're not doing the work, do you have the 19 time?" 20 MR MOLONEY: You spoke about the development of, as it were, 21 the recruitment process and, of course, yesterday you 22 were asked about the development of thinking on 23 whistleblowing. So I'd like to take you back and that's 24 why I stopped you, because I wanted to ask you a few 25 more questions about the development of thinking on 62 1 recruitment to Boards and about how it was perhaps maybe 2 different in the '90s than it is now. 3 DAME SANDRA: Yes. 4 MR MOLONEY: So was the problem of overboarding as well 5 understood in the early part of the period covered by 6 this Inquiry, let's say the late '90s? 7 DAME SANDRA: I don't recall there being so much emphasis 8 upon how one was managing one's portfolio in the '90s as 9 there is now. 10 MR MOLONEY: There are developments now and we know there is 11 guidance, there is the Code, and so on. 12 DAME SANDRA: Yes. 13 MR MOLONEY: Are there any hard legal limits on 14 overboarding? 15 DAME SANDRA: As I say, legal limits -- legal, actually, 16 based in law -- I don't believe so, but I may be -- 17 someone may correct me. 18 MR MOLONEY: Right. 19 DAME SANDRA: I think, if I could say that, with regard to 20 the recruitment now, and in financial services there 21 is -- there are some specific requirements. I have been 22 well aware of a number of cases where someone has wanted 23 to take a role which they've been offered, but the 24 condition of their taking the role is that they will 25 give up something in their portfolio. So, to that 63 1 extent, there is a discussion at that recruitment stage, 2 and their acceptance of a role may be conditional upon 3 their giving up other aspects of their portfolio. 4 MR MOLONEY: Can we look at UKGI00044277, please. Thank 5 you. If we can just go to the bottom of this first 6 page, please, it's a guidance note. Have you seen this 7 guidance note at all before? 8 DAME SANDRA: I haven't seen this one. 9 MR MOLONEY: It's a UKGI document. 10 DAME SANDRA: It's 2020, I see. 11 MR MOLONEY: That's it. 2020 is important because there's 12 been a consultation, a relatively recent consultation on 13 overboarding and -- 14 DAME SANDRA: Yes. 15 MR MOLONEY: -- shall we come back to that once we've just 16 looked at this document? So the Institutional 17 Shareholders Service gives some guidance, and it reads 18 at the bottom: 19 "Where directors have multiple board appointments, 20 ISS may recommend a vote against directors who appear to 21 hold an excessive number of board rolls at 22 publicly-listed companies ..." 23 Right at the bottom where the yellow mark is. 24 DAME SANDRA: Okay. 25 MR MOLONEY: I'll just read it again but it's, essentially, 64 1 when people have got multiple board appointments, then 2 the ISS can recommend a vote against directors if it 3 appears to be excessive. 4 DAME SANDRA: Perhaps we could scroll up or down? 5 MR MOLONEY: We're going to because it gives further 6 guidance. You probably know, in fact, but onto the next 7 page, please, at the top. 8 "Any person who holds more than five mandates at 9 listed companies will be classified as overboarded. For 10 the purposes of calculating this limit, a non-executive 11 directorship counts as one mandate, a non-executive 12 chairmanship counts as two mandates, and a position as 13 executive director (or a comparable role) is counted as 14 three mandates. 15 "Also, any person who holds the position of 16 executive director (or a comparable role) at one company 17 and a non-executive chairman at a different company will 18 be classified as overboarded." 19 That guidance is 2020. In 2023, there has been 20 a consultation, hasn't there, to, as it were, develop 21 the Code. 22 DAME SANDRA: Yes, I think if we could just possibly look at 23 the previous page which begins, I think this is the 24 advice from ISS, isn't it? 25 MR MOLONEY: It is, yes. 65 1 DAME SANDRA: And ISS is an institutional shareholder proxy 2 body. It's not -- it represents, I believe -- perhaps 3 we could go down to the bottom of the page? Yes, 4 institution, ISS. That is not -- their statement and 5 their classification of mandate shows how they will vote 6 at annual general meetings about the appointment of 7 directors. 8 MR MOLONEY: Absolutely. 9 DAME SANDRA: So it shouldn't be confused as guidance, in 10 the way in which we've described guidance here. 11 MR MOLONEY: Indeed. But then we see the FRC Code 2018. 12 DAME SANDRA: That they should have sufficient time. 13 I mean, I think that FRC code is exactly the code that 14 I enunciated at the very beginning of our conversation 15 about the question of do non-executives have sufficient 16 time; are they going to provide constructive challenge 17 and strategic guidance, offer specialist advice and hold 18 management to account? That's exactly -- do they have 19 enough time to do that? 20 MR MOLONEY: Precisely, so we have the ISS with the five 21 mandates and -- 22 DAME SANDRA: But the ISS is very different to the FRC Code. 23 MR MOLONEY: I completely understand that, Dame Sandra, but 24 then the FRC code is set out there, it's Principle H and 25 paragraph 15, essentially, the board should take into 66 1 account other demands on the directors' time. 2 During the consultation, in relation to this FRC 3 Code, was it floated that there might be a maximum of 4 posts that a director could hold? 5 DAME SANDRA: There was a discussion, I believe, in various 6 places around board tables, informally, about whether 7 there was going to be a requirement. 8 MR MOLONEY: Yes, and, in the end, there was a conclusion 9 that there was not going to be. 10 DAME SANDRA: That is what my understanding is, unless you 11 tell me my understanding is misplaced. 12 MR MOLONEY: I'm not going to say that, Dame Sandra, but 13 should there be a statutory limit on the number of 14 mandates or appointments which can be taken at any one 15 time? 16 DAME SANDRA: As someone who has, in the past, had quite 17 a full portfolio, I would say that my personal guidance 18 has been: do I have the time to do the job properly? 19 And if I should choose to do that by working a week 20 which wouldn't be recognised by most people as a working 21 week, then in a way that's up to me and it's up to my 22 peers to decide whether or not I'm fulfilling my 23 obligations. 24 I understand ISS's point of view about counting the 25 mandates, and they want to have a basis on whether 67 1 they're going to vote for the reappointment of directors 2 or not. For me, that's a rather too formulaic approach, 3 just my personal view, but I'm passionately sure that 4 people need to have the time, and I do think that, when 5 boards have people who are not putting the time in, 6 there should be very clear ways of the discussions going 7 so that they either give up some of their portfolio or 8 they don't give up that particular job. 9 But I think that I would personally have that within 10 the realms of the discussion of the board. But that's 11 a very personal view. 12 MR MOLONEY: So you would keep the assessment of whether 13 a person is doing their job properly as it is? 14 DAME SANDRA: I would -- and I do think boards are the best 15 place for doing that, if they take responsibility for 16 doing so. 17 MR MOLONEY: Of course, that's then dependent on the board 18 taking responsibility in that sense, isn't it? 19 DAME SANDRA: It does. 20 MR MOLONEY: Is there a case for a different and more 21 directive approach in the public sector as opposed to 22 the private sector? 23 DAME SANDRA: I believe that the public sector needs and 24 deserves directors who will do their job properly, and 25 that requires them to give the time. I don't see why 68 1 the approach that I've adopted should be different for 2 the public sector to the private sector. But others may 3 disappear. But I think the fundamental thing is that 4 directors have got responsibilities, and those 5 responsibilities should be discharged. 6 MR MOLONEY: So precisely because you are, as it were, 7 determinant of the effectiveness of being a director 8 relies on whether or not they are able to give 9 sufficient time, then there should be no difference in 10 principle between public and private on that basis? 11 DAME SANDRA: They should give sufficient time. That, of 12 course, isn't sufficient. They should bring expertise, 13 they should be good at it, and so on but, at the level 14 of time, I don't see that there should be a difference 15 between the public and private. 16 MR MOLONEY: You believe that the assessment of whether or 17 not they are able to devote sufficient time with, of 18 course, their expertise and other factors being, as it 19 were, taken for granted anyway, on their appointment, 20 but whether or not the assessment of that should be as 21 it is now: that it's about feedback from other 22 directors? 23 DAME SANDRA: I wouldn't propose any further regulation but 24 I must find out from my colleague what she would say. 25 DR STEWARD: I think it's feedback from other directors, 69 1 including the executive, and the executive team will 2 have a strong sense in the public sector as to whether 3 they want to use non-executive directors in order to do 4 things which might be outside the bounds of a commercial 5 board non-executive director, like spending more time 6 visiting services, or -- but that -- I do think there's 7 a danger of blurring the boundaries between the 8 non-executives and the executives if you say that the 9 non-executives in the public sector should have more 10 time to give to the role. 11 I think that's -- 12 MR MOLONEY: Dr Steward, I was focusing, rather, at that 13 stage not on the distinction between the public and 14 private but whether or not, in general, assuming that 15 the acid test for whether or not a director is 16 discharging their duties properly will be, in essence, 17 the extent to which they can properly give time, that 18 the assessment of that is best left as it is, which is 19 through the review at the end of the year or at the end 20 of the three years or at the end of the two years, 21 whichever it is. 22 DR STEWARD: Yes. 23 MR MOLONEY: Thank you. That's all I ask, sir. 24 SIR WYN WILLIAMS: Thank you, Mr Moloney. 25 I think it's Ms Watt next, yes? 70 1 Questioned by MS WATT 2 MS WATT: Thank you, sir. 3 DAME SANDRA: I can't see where I'm looking. 4 SIR WYN WILLIAMS: Have we got a direct sight line? 5 DAME SANDRA: It's fine now, I know where I'm looking. 6 I can see. 7 MS WATT: Good afternoon -- not quite, still it's good 8 morning, sorry. 9 Good morning, Dame Sandra and Dr Steward. 10 I ask questions for the National Federation of 11 SubPostmasters, a Core Participant in the Inquiry, and 12 the NFSP has 6,500 postmaster members, across 8,500 post 13 offices in the UK. I'm going to look at your first and 14 second reports just in brief summary and then ask 15 a couple of questions. 16 In your first and second reports you highlight not 17 just cultural failings at the Post Office but you 18 identify the reasons for that. It seems to be embedded 19 in the way in which the senior leadership over the years 20 treated the employees and stakeholders, such as the 21 postmasters. You highlight a complete failure of the 22 Board across the years to identify risks, and a failure 23 to be transparent, properly induct incoming Board 24 members. You list a range of failings. 25 You say at section B3.3 of your second report -- I'm 71 1 not going to call it up, I'm just going to summarise 2 what you say there: 3 "In Report 1 we described the culture as the 4 attitudes, values and beliefs which are experienced in 5 the company, in other words the company ethos, which is 6 revealed in the way the company treats all its workforce 7 and stakeholders, it's hard to change. It is by no 8 means unusual for strong, damaging beliefs and 9 attitudes, a corrosive ethos, to persist unless 10 seriously and systematically changed. Determination to 11 effect cultural change requires that the culture is seen 12 by the board and one hopes, at least in time, following 13 direction by the board, the executive as seriously 14 damaging to the company. Only then can culture be 15 systematically addressed through changes and structures, 16 policies, practices, as well as in addressing apparent 17 indifference or even violations of core human values, 18 commonly used language, and exhibited behaviour in 19 everyday life in the organisation." 20 So taking that, based on what you say in your 21 reports, is it fair to say that it's going to take 22 a huge and consistent effort to effect the necessary 23 change at the Post Office and in the Board, given what 24 you describe? 25 DAME SANDRA: It is a huge job. It is not to be underrated. 72 1 The extent to which one can change culture has many, 2 many, many different aspects. They need to be 3 coordinated and, above all, there needs to be very 4 strong commitment to sustain the work in order to change 5 the culture. 6 Do you want add? 7 DR STEWARD: I would agree that culture changes is 8 protracted and people think it's easy or think it's 9 a quick fix; there isn't. Having said that, I think 10 there are ways of improving governance, which can be 11 done quite quickly, and the relationship between 12 governance and culture is a very close one. 13 MS WATT: So not necessarily instant but could be short, 14 medium and long-term ways in which things could be dealt 15 with? 16 DR STEWARD: Yes. 17 DAME SANDRA: One wants a direction of travel but the 18 sustained emphasis and the coordinated emphasis is 19 really important. 20 MS WATT: How difficult do you think that is, or has been, 21 when you've been looking back at the level of change 22 across the Board and in the senior leadership? Does 23 that take a difference if you've effectively got 24 a revolving door? 25 DAME SANDRA: Well, we're dealing with a long period here. 73 1 The revolving door can be a great opportunity because 2 you get a fresh pair of eyes. The revolving door can be 3 a very great disadvantage because people become cynical 4 and think everyone who comes in will say they'll do 5 something different and won't do anything different so 6 I think it could be both -- the revolving door could be 7 both an advantage and disadvantage. It depends upon the 8 commitment and the real understanding that there is the 9 need for change. 10 MS WATT: Would you agree that the real losers of the 11 failures that you've looked at and outlined in the 12 culture and governance at every turn are the postmasters 13 and the public they serve? 14 DAME SANDRA: I didn't hear the beginning of the question? 15 MS WATT: Would you agree that the real losers of the 16 failures that you identify in culture and governance are 17 the postmasters and the public they serve? 18 DAME SANDRA: Well, I think that those people who work in 19 organisations with the sort of culture that we describe 20 are not working at their best and, mostly, are not going 21 to be able to do the jobs that they, I'm sure, wish that 22 they could do. So with regard to who is the loser, 23 I think that's for everyone to decide. I think the 24 impact of having a poor culture is felt by everybody. 25 MS WATT: Just changing topics slightly but following on, in 74 1 terms of achieving oversight, challenge, curiosity, the 2 things that you've identified in your report as being 3 necessary, the NFSP has put forward to Government and 4 the Post Office the idea of an oversight committee. It 5 would be made up of a range of representative bodies, 6 consumer champions, Government representation, and it 7 would have a role in overseeing the Board. 8 DAME SANDRA: Mm. 9 MS WATT: The former head of UKGI, Sir Alex Chisholm, in his 10 witness statement and recent evidence, and I appreciate 11 you're not across the whole of Phase 7, thought that 12 something like this might unfortunately be necessary, 13 given the history of what's happened. As I say, I hear 14 what you say about the longer-term aim being for the 15 board to perhaps, if I can summarise, stand on its own 16 two feet and do the right thing at the right time, but 17 thinking about that reasoning of Sir Alex, it may be 18 something for the medium term to steady the ship and 19 build public confidence in the Post Office. 20 I'll summarise some of the key aims for it and then 21 ask you a question. This is very broad. It doesn't 22 have to be this oversight committee: an oversight 23 committee or something like it. The key aims would be 24 to challenge the strategy of the Post Office and the 25 Board and ask questions about risk, to improve 75 1 transparency and corporate accountability, to ensure the 2 Government uses the powers it has to improve the culture 3 at the Post Office and rebuild trust in the brand, and 4 to demonstrate that a diverse group of people can work 5 together for the needs of the Post Office Network. 6 So what I wanted to ask was: would you accept that 7 something like an oversight committee could be 8 established as one of the ways forward, in at least the 9 medium term, in restoring public and postmaster 10 confidence in the Post Office while the Board does 11 indeed get to grips with the things that you've 12 identified as being past failures? 13 DAME SANDRA: You'll find a theme from me about future 14 change, which is that I don't want to suggest anything 15 which suggests that the Board of the Post Office 16 themselves have to own these problems and find ways of 17 solving them. I don't want the possibility that 18 an oversight board or would be -- "Well, that's for the 19 oversight board". I want the extent of responsibility 20 and accountability to be felt deeply for doing all the 21 things that we have described in our report. 22 And, for that reason, I'm not sure about the 23 oversight committee. I understand its relationship, for 24 example, to the dual board structure that one might have 25 in Continental Europe, which I spoke about yesterday, 76 1 and it's rather similar to that. 2 However, I think -- and the things you identified, 3 challenge, improving transparency, ensuring Government 4 use powers appropriately, demonstrating that people can 5 work together, these are exactly the things the Board 6 has got to do and, therefore, I am -- I want to put the 7 spotlight on the Board to do them. 8 However, the importance of consultation, the 9 importance of listening, is so great that I do think 10 that one could begin to look at something like the 11 present arrangements with the FCA, with Financial 12 Conduct Authority, which -- from when it was set up. 13 There are a number of panels -- there are consumer 14 panels, market practitioner panels, market -- which are 15 required to -- they're properly appointed, their Chair 16 reports in to the Board, they have to be listened to. 17 And I can speak as someone who, in the previous 18 incarnation on the Financial Services Authority, those 19 reports that came in from the panels were extremely 20 important. 21 So my view would be something within the structure 22 which does give confidence that there is a real voice, 23 where the -- how they work is a subject for agreement. 24 That is important. And I would personally prefer that 25 to the notion often an oversight board which I fear may 77 1 take away from the responsibilities of the Board itself 2 to do the right thing. 3 MS WATT: So there could be an adaptation or some of the 4 principles could be adopted and looked at how that could 5 be introduced? 6 DAME SANDRA: I've described how I think it might be done 7 and I think there are models with other public bodies 8 which put those into their governance. 9 MS WATT: Just thinking about something you mentioned there 10 in relation to listening, and just the final topic that 11 I have, and looking at some examples -- this is looking 12 back a little bit -- in relation to the Board and the 13 ways in which it has, in the more recent past, tried to 14 improve the optics, if I might put it like that, by 15 creating the role of Postmaster NEDs. But in their 16 Inquiry witness statements and in their oral evidence, 17 again, Phase 7, and appreciate you haven't seen all of 18 that, Mr Jacobs, one of those Postmaster NEDs, in his 19 witness statement said: 20 "Mr Ismail and I have raised issues in meetings and 21 made requests that do not seem to result in action. As 22 set out above, we had to make several requests for 23 updates on Past Roles and Project Phoenix before we 24 received satisfactory updates. This creates the 25 impression that Mr Ismail and I are an annoyance to the 78 1 Post Office Board. My impression is that the Board 2 would prefer a more passive Postmaster NED not 3 challenging decisions and Senior Executives directly." 4 Now, that's the recent past. So it would appear not 5 very much listening, according to them, is going on. 6 What I wanted to ask you, and you mentioned also 7 yesterday you talked about conflicts of interest, and of 8 course that can arise with directors' duties, but would 9 you agree that, having the Postmaster NEDs, the Post 10 Office still needs to ensure they use other routes such 11 as representative bodies for postmaster engagement and 12 obtaining postmaster views, in other words those NEDs 13 can't be the only word on postmaster views to the Board? 14 DAME SANDRA: I would agree. 15 MS WATT: Thank you. Those are my questions. 16 SIR WYN WILLIAMS: It's Mr Casey now, is it? 17 MR CASEY: Yes, it is. 18 SIR WYN WILLIAMS: Have you got a proper side to everyone, 19 Mr Casey? 20 MR CASEY: I can see them both now, yes. 21 SIR WYN WILLIAMS: We can hear you clearly now I think, 22 fine. 23 Questioned by MR CASEY 24 MR CASEY: I'm going to ask some questions on behalf of 25 Paula Vennells, the former CEO. 79 1 I'm going to ask two sets of questions. The first 2 are questions are based on assumed facts, which I'm 3 going to ask you to assume without asking you to accept 4 them, on various matters. Then my second set of 5 questions will be about the role of the general counsel. 6 Firstly, I'd ask you to assume that, in between 7 Board meetings, Ms Vennells and Ms Perkins were in 8 regular contact about the matters covered in your second 9 report. My question is: on the assumption that that is 10 correct, that they were in regular discussions about 11 Second Sight Report and the prosecution case review, 12 would that, in principle, have assisted Ms Perkins as 13 Chairman to determine what issues should come before the 14 Board? 15 DAME SANDRA: As I understand the question, if we assume 16 they were in regular contact, would we assume that that 17 would mean that Ms Perkins was appraised of matters to 18 been before the Board; was that the question? 19 MR CASEY: Well, the question is slightly more general than 20 that, that on the assumption that they were in regular 21 contact between Board meetings, would that contact have 22 assisted Ms Perkins in deciding what issues should come 23 before the Board for discussion? 24 DAME SANDRA: I imagine it would. 25 MR CASEY: The next assumption I want to put to you is this: 80 1 whilst Second Sight were working on the postmaster cases 2 between 2012 and the publication of their report in July 3 2013, there was a core team from Post Office who were 4 liaising with Second Sight. I want you to assume that 5 that core team consisted of, firstly, a Senior IT 6 Manager; secondly, a Manager from the Accounting 7 Department of Post Office, which dealt with postmaster 8 complaints and disputes; thirdly, a Senior Manager from 9 Network which liaised with the Branch Network; and, 10 fourthly, Susan Crichton, the General Counsel. 11 Now, you spoke yesterday of the importance of 12 sharing knowledge horizontally across the business and 13 my question is: on those assumed facts, would that be 14 an example of knowledge being shared horizontally in 15 relation to the issues covered in your second report? 16 DAME SANDRA: If it were to exist it would be an example 17 that there was a structure in which it was possible to 18 share information. Whether or not that information was 19 actually shared, I can't say. 20 MR CASEY: Yes, I'm not asking you to assume that. 21 DAME SANDRA: There is a structure there, apparently. 22 MR CASEY: Yes. So my next related assumption is that that 23 same team considered the Second Sight Interim Report 24 when it was published in July 2013, and that the 25 information that was presented to the Executive and the 81 1 Board about the Second Sight Interim Report, was derived 2 from the work product of that team. So the question is 3 again: would that be an example of a structure where 4 knowledge was to be shared horizontally? 5 DAME SANDRA: But I don't believe we saw any evidence of 6 that. 7 MR CASEY: I'm not asking you whether you source code any 8 evidence of it; I'm asking you to assume that that was 9 the team who, on behalf of Post Office, considered the 10 merits of the Second Sight Interim Report. 11 DAME SANDRA: If you're saying to me: if it were to have 12 been considered by people from different functions, 13 would that have been example of multi-functional 14 consideration -- 15 MR CASEY: Yes. 16 DAME SANDRA: -- well, self-evidently it would. 17 MR CASEY: Thank you very much. I want to move on to the 18 role of the General Counsel, please, and could we bring 19 up WITN10010101. Is this a document you have seen? 20 DAME SANDRA: Is this the 2015 document? 21 MR CASEY: Yes. 22 DAME SANDRA: Yes, I have. 23 MR CASEY: Now, if we go over to the second page of this 24 document, the first two paragraphs contain a summary of 25 the role and responsibilities of the General Counsel. 82 1 It says: 2 "The General Counsel is responsible for managing the 3 Company Secretariat, Internal Audit, Legal, Risk and 4 Compliance and Security Teams." 5 Then in the second paragraph, it says: 6 "The Legal Team of 12 are responsibility for 7 managing all aspects of legal risk, identifying and 8 solving strategic and operational legal issues, and 9 providing understandable, accurate and timely advice to 10 the business on a very wide-ranging and changing set of 11 complex issues, which are frequently novel and to short 12 deadlines." 13 Now, you've said today that you haven't looked into 14 the regulatory rules by which general counsel must 15 operate. 16 DAME SANDRA: Yes. 17 MR CASEY: I take it you've also not looked into the 18 question of the legal duties that they will owe to Post 19 Office as their client. 20 DAME SANDRA: We're -- no, you're -- I have to not looked in 21 detail at the role of the general counsel in this 22 regard. That's right. I should say that the first 23 paragraph is, of course, this is the Post Office's 24 construction of the role of the general counsel. 25 MR CASEY: Yes. 83 1 DAME SANDRA: Yes. 2 MR CASEY: What I'd just like to ask you about, though, are 3 the expectations that the Board would have of what 4 a General Counsel would bring to them. So, just looking 5 at that second paragraph, it identifies three functions. 6 The first of those is responsibility for managing all 7 aspects of legal risk. Do you agree it would be 8 an expectation of the POL Board that the General Counsel 9 would collate legal risks to them? 10 DAME SANDRA: Yes, nothing can abrogate the responsibility 11 of the chief executive for overall responsibility. One 12 can define the responsibility of the director of 13 marketing, the director of strategy, the finance 14 director, unless he or she is a member of the board, and 15 the general counsel, one can define their 16 responsibilities but that responsibility is held within 17 an executive team, and the chief executive is the 18 responsible person for that executive team. I don't 19 know if that's relevant to your question but it seemed 20 relevant to me. 21 MR CASEY: Thank you. My question is: would you agree that 22 a Board of POL would have an expectation that the 23 General Counsel would alert them to legal risks? 24 DAME SANDRA: Absolutely. 25 MR CASEY: Mr Aujard, who was one of the General Counsel 84 1 during Ms Vennells' tenure, agreed with a proposition 2 during his oral evidence that a general counsel should 3 be proactive in identifying legal risks to the business; 4 do you agree with that? 5 DAME SANDRA: Indeed I do. I agree that, above all, all the 6 executive directors, and some with special 7 responsibility, should be proactive, creative, do their 8 job. I completely agree with that. 9 MR CASEY: Would you agree that the reason for proactivity 10 in identifying legal risks is that the GC may be aware, 11 by nature of their profession, of risks of which a lay 12 board and a lay executive may well be unaware? 13 DAME SANDRA: I'm sorry, I didn't catch that. 14 MR CASEY: Would you agree that the reason why a GC needs to 15 be proactive in alerting the business to legal risks 16 that -- and my emphasis is on legal -- is that the GC 17 may well be aware, because of their profession, of risks 18 of which a non-lawyer may be unaware? 19 DAME SANDRA: Indeed. 20 MR CASEY: Now, the second role identified in this document 21 of the GC is solving strategic and operational legal 22 issues. Again, do you agree a board would have 23 an expectation that that is something that a GC would 24 do? 25 DAME SANDRA: As I say, within the overall structure of what 85 1 an executive team is, with the chief executive being 2 ultimately responsible, I completely agree with this 3 statement -- 4 MR CASEY: And -- 5 DAME SANDRA: -- because it's their statement. I think it's 6 very important to know that this is what POL determined 7 in 2015 that they wanted of their General Counsel and it 8 would be reasonable for the Board to believe that what 9 they wanted would be what they got. 10 MR CASEY: Obviously a general counsel may have spent their 11 professional life in one particular area of the law. Do 12 you think that a general counsel should, if an issue 13 crops up that they are not familiar with, engage 14 external counsel to assist them? 15 DAME SANDRA: I do. 16 MR CASEY: Then the third role of the General Counsel set 17 out here is to provide understandable, accurate and 18 timely advice to the business. Can you agree that that 19 would be an -- 20 DAME SANDRA: I do. 21 MR CASEY: -- would be an expectation? 22 Do you agree a board would have an expectation that 23 a GC who was performing these roles, unless they knew 24 something to the contrary, would be performing them 25 competently? 86 1 DAME SANDRA: The assumption would be that an executive 2 director, a member of a senior team, was performing 3 their role appropriately, and that, if they weren't, it 4 would be picked up through performance management 5 matters. 6 MR CASEY: If a board received a paper from the GC, from 7 which it was clear that the GC had received external 8 advice and was providing a summary of that external 9 advice in their paper to the board, wouldn't the 10 assumption of the board be that that paper contained 11 what they needed to know? 12 DAME SANDRA: That would be a reasonable assumption. 13 MR CASEY: Thank you very much, I've no more questions. 14 DAME SANDRA: Maybe I -- since there is that document which 15 you have kindly brought to our attention, maybe we could 16 have it once more up? It did strike us, when we looked 17 at it, there didn't seem to be any mention of 18 prosecutions. 19 SIR WYN WILLIAMS: Is your point, Dame Sandra, that, in 20 relation to something as potentially life changing for 21 the people involved as being prosecuted, there ought to 22 be some mention of it? 23 DAME SANDRA: Particularly as this is 2015. Yes. 24 SIR WYN WILLIAMS: Yes. 25 DAME SANDRA: Thank you. 87 1 MR BEER: I don't think we know the precise date in 2015 2 and, therefore, I don't think we know whether it pre or 3 post-dated the Post Office's decision, effectively, to 4 cease prosecution activities. 5 SIR WYN WILLIAMS: Well, no doubt, when you and I reflect 6 upon it, Mr Beer, if we think it important, we will send 7 an appropriate notice to the Post Office asking them to 8 provide the date. 9 MR BEER: I think we can probably narrow it down from other 10 evidence because, in fact, this is a job spec. It is 11 essentially the job specification for a new General 12 Counsel, and so I think -- 13 SIR WYN WILLIAMS: So that I can put this in context, it's 14 the job specification to which Ms MacLeod ultimately 15 responded and got the job? 16 MR BEER: I believe that to be the case. 17 SIR WYN WILLIAMS: Fine okay. 18 MR BEER: Sir, I haven't any questions arising. Do you? 19 SIR WYN WILLIAMS: No, thank you. 20 So, Dame Sandra and Dr Steward, I'm extremely 21 grateful to you both. Anyone just looking at your 22 written evidence will know that you must have put in 23 a huge effort to produce it in the timescales you were 24 asked to, so I'm extremely grateful to you, and I'm 25 extremely grateful for your oral answers over the course 88 1 of yesterday and this morning. So thank you very much. 2 We still have about five minutes to go, I suspect, 3 with various announcements, so I'm very happy for you to 4 skedaddle, so to speak, or you can sit there and listen 5 for five minutes. 6 DAME SANDRA: We'll stay. 7 SIR WYN WILLIAMS: You'll stay. You remind me of the jurors 8 who like to stay even for the sentencing process. 9 Right. 10 All right then, Mr Beer, over to you. 11 Statement by MR BEER 12 MR BEER: Sir, that is presently all of the oral evidence 13 that we intend to call before you in the Inquiry. 14 As I have explained previously, at the end of some 15 of the previous phases, to ensure that the Inquiry has 16 obtained as full a picture of the issues as possible, 17 Rule 9 requests were sent to a very wide pool of 18 individuals, a wider pool than those who have ultimately 19 been called before you to give their oral evidence. 20 Where the Inquiry has decided that it is not 21 necessary to hear oral evidence from such individuals, 22 their statements will be admitted into evidence and 23 treated as having been read into the record. Their 24 witness statements will be shortly disclosed to the 25 public on the Inquiry's website. 89 1 I should say that the fact that the statements are 2 to be read into the record does not mean that the 3 accounts given within them are necessarily agreed by 4 each or any of the Core Participants. That evidence is 5 necessarily untested by examination in this room. 6 So, sir, I'm going to read into the record, if 7 I may, a series of witness statements made across the 8 phases. Can we have, please, on the screen INQ00002029, 9 the PowerPoint presentation. 10 Thank you. Essentially, sir, this identifies in 11 each slide that I'm going to present the statements and 12 their URNs that are to be read into the record. 13 Rather than me either reading the URNs out, less 14 still reading the witness statements out, as is 15 sometimes done in other contexts, I'm going to read in 16 the statements across Phases 1, 3, 4, 5, 6 and 7, and 17 that reflects the fact that, even though the previous 18 phases have closed, the Inquiry has continued to seek 19 evidence about relevant matters, or has been provided 20 without conditioning for such evidence. 21 Can we look at slide 2, please. May we treat as 22 read into the record, please, the witness statements of 23 David Farry; Julie Kay, that's Mrs Wolstenholme; Siema 24 Kamran; John Kenneth Macaldowie; Tracy Ann Merrit; and 25 Robert Thompson, with those URNs. They are essentially 90 1 Human Impact statements or supplemental Human Impact 2 statements. 3 SIR WYN WILLIAMS: Yes, of course, Mr Beer. 4 MR BEER: Thank you, slide 3, please. In Phase 3 can we 5 read into the record the statements of Alison Clark; 6 John Courtley; Paul Gardner; Russell Hancock; Davyd 7 Nash; Jane Smith; and Philippa Wright. 8 SIR WYN WILLIAMS: Yes. 9 MR BEER: Next slide please. Phase 4, can we read into the 10 record, please, Malcolm Macleod's witness statement. 11 SIR WYN WILLIAMS: Yes. 12 MR BEER: Phases 5 and 6, there's a lot of these: Alan 13 Barrie; Simon Baker; Peter Batten; Sir Donald Brydon; 14 David Cavender KC; Catherine Churchard; Jeremy Cope; 15 Peter Corbett; David Courtley. 16 Over the page: Gareth Davies; Dr Naranker Dulay; 17 Douglas Evans; Richard Francis; Andy Furey; Robert 18 Gilbert; William Hayes. 19 Over the page, please: Darren Heilig; Jane Hill; 20 Jonathan Hill; Andy Holt; Gareth James; Sir Sajid Javid; 21 The Right Honourable Alan Johnson. 22 Over the page, please: Professor Jeffrey Kramer; Sir 23 Norman Lamb; John Lloyd; Baroness Neville-Rolfe, her 24 second statement; The Right Honourable Lord Peter 25 Mandelson; Alasdair Marnoch; Tony Marsh, that's his 91 1 second statement. 2 Over the page: Tim McCormack; Arthur Owen (Les 3 Owen); Laura Thompson; Sophie Underwood; Mark Underwood; 4 Dave Ward; Tom Wechsler; Michael Whitehead. In Phase 5 5 and 6, please. 6 Can we move to Phase 7, please. May we read into 7 the record the statements of: Sarah Bell; Thomas Cooper, 8 that's his second statement; Sir Ross Cranston; Carl 9 Creswell, his third statement; Andrew Darfoor; Brian 10 Gaunt; Sarah Gray; Calum Greenhow, a second statement; 11 Lisa Harrington; Sir Gary Hickinbottom; Professor 12 Christopher Hodges; Simon Jeffreys. 13 Over the page please: Christopher Leach; Dan 14 O'Mahoney; Zarin Patel; Martin Roberts; Rachel 15 Scarrabelotti, her seventh statement; Carla Stent; 16 Richard Taylor; Rod Williams, a second statement; Owen 17 Woodley; and Paul Wood. As read into the record, 18 please. 19 SIR WYN WILLIAMS: Yes. 20 MR BEER: Thank you very much. I should say that, after 21 today, the Inquiry will continue to seek evidence in 22 pursuit of its investigation and in discharge of its 23 Terms of Reference. Any statements that we obtain will 24 be disclosed to Core Participants and uploaded to the 25 Inquiry's website. 92 1 Finally, sir, you know that we resume for oral 2 closing submissions from the Core Participants but not 3 from your counsel, over two days on 16 and 17 December 4 this year. 5 SIR WYN WILLIAMS: Yes. 6 MR BEER: Thank you, sir. 7 SIR WYN WILLIAMS: In relation to what I might call 8 statements which will arrive from now onwards, some, if 9 not all of those, may also, in due course, become 10 evidence in the Inquiry but I don't presume to convene 11 a hearing simply so that Mr Beer can say to me "Will you 12 read these into the record?" 13 It will be read into the record by my accepting them 14 as evidence and Core Participants will be notified when 15 that occurs. 16 MR BEER: Yes, they will be sent out to Core Participants 17 with a note to that effect, uploaded to the website. 18 For those that come in between now and 16 December, if 19 you'll permit me, I might do what I've just done now, on 20 the morning of 16 December. 21 SIR WYN WILLIAMS: Yes. 22 MR BEER: We anticipate a smattering of statements between 23 now and then. 24 SIR WYN WILLIAMS: Yes, fine. 25 MR BEER: Thank you very much, sir. 93 1 SIR WYN WILLIAMS: Well, thank you, Mr Beer. 2 MR HENRY: Can I just mention one thing, please, arising 3 from that, and I do apologise, perhaps I should have 4 actually dealt with this administratively. 5 In view of the volume of extra statements and 6 appreciating that you, sir, will have to read the 7 closing submissions before the oral submissions are 8 made, I was wondering if I could ask for a very modest 9 extension from Friday, 6 to Monday, 9 December for the 10 submission of the written submissions? 11 SIR WYN WILLIAMS: You mean you want to deprive me of the 12 opportunity of using my weekend to read your statement, 13 Mr Henry? 14 MR HENRY: I'm afraid so, sir. 15 SIR WYN WILLIAMS: Well, I think I'll graciously accede to 16 that. 17 MR HENRY: Thank you. 18 SIR WYN WILLIAMS: I think, let's be formal now about it. 19 I will say, unless Mr Beer wants to contradict me, 20 that the time for providing the written closing 21 statement is now extended to 2.00 pm on the Monday that 22 follows Friday, the 6th. 23 MR BEER: Thank you, sir. 24 SIR WYN WILLIAMS: Is that it? 25 MR BEER: It is from me, sir. 94 1 Statement by SIR WYN WILLIAMS 2 SIR WYN WILLIAMS: Well, then I suppose, as they say in 3 court, the judge gets the last word. So what do I want 4 to say at this stage? 5 Well, firstly, I want to say that I am extremely 6 grateful to everyone who has helped to make this phase 7 run as smoothly as every other phase has done. That is 8 a remarkable achievement, in my opinion, because it 9 means that every phase of this Inquiry has operated as 10 it should have done and, for that, I can only express my 11 considerable thanks, firstly to my magnificent team, in 12 all its aspects, which goes from lawyers, on the one 13 hand, to the lady who uploads the documents onto the 14 screen, and the lady who transcribes, on the other, and 15 everybody in between. 16 I'd like to thank all Core Participants for the help 17 they have afforded to me during all these phases. 18 Without your assistance, it could not have happened in 19 the way that it has happened. 20 I'd like to pay a special tribute to everybody whose 21 has attended this Inquiry over, now, about three years, 22 for their exemplary behaviour. Some of the evidence 23 that we have heard, not unnaturally, has caused a degree 24 of tension in the room, should I say, yet, despite that, 25 people have kept themselves well under control, and have 95 1 treated the Inquiry with the respect it deserves. 2 I say "the Inquiry" because often, I've just been 3 a figure on a screen but that has not led to anybody 4 misbehaving. So for that, I'm extremely grateful. 5 I want to say one thing about the closing 6 submissions. We've invited those writing the closing 7 submissions for the 16th and 17th to confine themselves 8 to 100 pages. There is one exception to that, which 9 I want to explain publicly so that there is no 10 misunderstanding about it. 11 Mr Gareth Jenkins' representatives have asked to be 12 allowed to write a longer closing statement. I have 13 acceded to that request because you may recall that 14 Mr Jenkins's attempts to give evidence were thwarted for 15 various reasons over the course of the Inquiry and so 16 his representatives were deprived of the opportunity of 17 making closing submissions at the end of particular 18 phases. 19 So I have thought it appropriate to permit them to 20 make a longer statement because everybody else has had 21 the opportunity to make statements as we are going 22 along. So that's the reason for it, if anybody says, 23 "Why have they got 140 pages and we've got 100?" They 24 all add up to roughly the same when you put them 25 together. 96 1 Then I have two announcements to make about 2 publications. Well, it's one announcement, really, but 3 about two different issues. 4 I have had to determine an issue raised by the Post 5 Office about the reports which they supplied to the 6 Inquiry from a barrister named Jonathan Laidlaw KC. 7 That determination will appear on the website shortly 8 after we stop this afternoon now. I have decided to do 9 it in that way, not read it out, because it is 10 essentially a legal document and it is much better to be 11 read and digested rather than me sound off and drone 12 away here for ten minutes. So that will appear shortly. 13 In the same document, I will invite those who are 14 making written closing submissions to address a specific 15 topic which I will call post-conviction disclosure. 16 Again, it's number of paragraphs which deal with that 17 issue, and I don't seek to the summarise what I will say 18 in the document but, again, it will be a request by me 19 that, in closing submissions, that issue is dealt with 20 in the way that I describe in the document. 21 So with those words and my repeat of the thanks to 22 everyone, I bring this session to an end. I will see 23 you all on the 16th and 17th and, unless I am persuaded 24 otherwise, I won't see you again before I produce 25 a report. 97 1 But I'll see you on the 16th and 17th. So thank you 2 all very much. 3 MR BEER: Thank you, sir. 4 (12.23 pm) 5 (The hearing adjourned until Monday, 16 December 2024) 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 98 I N D E X DAME SANDRA JUNE NOBLE DAWSON (continued) .....1 DR KATY MARY STEWARD (continued) ..............1 Questioned by MR HENRY ........................2 Questioned by MR STEIN .......................23 Questioned by MR MOLONEY .....................51 Questioned by MS WATT ........................71 Questioned by MR CASEY .......................79 Statement by MR BEER .........................89 Statement by SIR WYN WILLIAMS ................95 99