John Lewis is one of the UK's best loved businesses - both by its customers and staff. Partners' counsellor Patrick Lewis speaks to Jonathan Stapleton about how the retailer's employee-owned structure and wide-ranging benefits offering have engaged its workforce.
About John Lewis
The John Lewis Partnership is owned and governed by its 81,000 staff and runs two of the UK's best-known retail businesses: John Lewis and Waitrose.
It has a total of 37 John Lewis shops and 277 Waitrose supermarkets, as well as an online business, a production unit and a farm. In 2012, it posted gross annual sales of £8.7bn and an operating profit of £393m, of which partners took home a bonus equivalent to 14% of their annual salary.
How the John Lewis Partnership works
The John Lewis Partnership was formed by John Spedan Lewis, the eldest of two sons whose father had opened the John Lewis department store in Oxford Street and bought the Peter Jones store in Sloane Square.
Spedan Lewis offered staff shorter working days, set up a staff committee and introduced a third week of paid holiday, an innovation for the retail trade at that time. His father died in 1928, giving him sole ownership of the business.
In 1929, the so-called first trust settlement gave him practical control of the business, but allowed the profits to be distributed among the employees.
Twenty-one years later, he signed an irrevocable second trust settlement, under which the partnership became the property of the people employed by it.
But how does this particular form of employee ownership work and how is it governed?
At the top level, the partnership has three governing authorities: the partnership council, the partnership board and the chairman.
The chairman - currently Charlie Mayfield - has ultimate accountability for the partnership's commercial performance and is responsible for developing a business strategy that ensures the long-term sustainability of the partnership in a competitive environment.
Day-to-day management and strategic direction of the partnership rests with divisional management boards, which are accountable to the chairman for performance, and are held to account internally by their own divisional councils.
The partnership board
The board includes the chairman, as well as five directors appointed by the chairman; five directors elected by the partnership council; and three non-executive directors.
The partnership council is directly elected by the staff - or partners - in the John Lewis Partnership. It holds the chairman and executives to account, and both influences policy (through various committees, such as its pay and benefits committee) and makes key governance decisions.
The council also elects three trustees of the constitution, who are directors of the John Lewis Partnership Trust, the legal entity that holds the company shares in trust for the partners and officially appoints the chairman and distributes the annual bonus.
Elections to council are held every three years and any partner who is entitled to vote can stand for election.
CV Patrick Lewis
Lewis - the great-grandson of the founder of John Lewis, and great nephew of the John Spedan Lewis who formed the partnership - began his career as an associate consultant, and later consultant, with Bain & Company. He then became a finance manager at Proctor & Gamble before joining the partnership in 1994 at John Lewis High Wycombe.
The following year, he transferred to Peter Jones to manage the gift and pictures department and later that year moved to John Lewis Welwyn. He was appointed merchandise manager in 1996 and in 1997 became acting general manager at John Lewis Watford.
Lewis then became managing director of John Lewis' Liverpool store, George Henry Lee, in 1998, and Cheadle in 2000. Patrick became project director of simplification in April 2002 and then supply chain director (John Lewis) in December of the same year.
He took up the post of director of retail operations in April 2007 and was appointed to his current position of partners' counsellor in February 2009.
