easy. Group Business Rules 27 th April 2004
General Rules Rule 1 New ventures only to start in the UK (US is the only exception). No staff to be employed anywhere else (except for 2 employees in Athens). 2 Only contract under UK law, except in the US. 3 Borrow modestly against hard assets with resale value in capital intensive industries 4 Use franchising for international expansion in labour intensive industries. Learn and in-source the skills of a franchisor 5 Challenge expected competitive advantages. Don’t believe our own BS! 6 Vendor finance to be used with care 7 Protect the brand within the operating budgets of a company (normally a percent of turnover) 8 Litigate on anti-competitive issues in a low cost way an easy brand value! Comments/ Examples
General Rules (cont) Rule Comments/ Examples 9 Identify contingent liabilities and insure against them 10 Outsource industry standard ops at first (reduce execution risk) e. g. easy. Bus operations outsourced to MK Metro 11 Adhere to business ethics. Zero tolerance of accepting gifts from suppliers (at most a meal) e. g. NO overnight or overseas trips (weekday or weekend) at suppliers expense 12 Analyse best of class operators in each industry - find out how they make money 13 Do not buy anything without 3 bids (threshold is 1, 000 gbp) All bids to be scrutinised by Head of Procurement (Jamie Mc. Leod) to ensure compliance 14 Do not sign contracts that restrict choice of suppliers later Ensure contracts allow the customers, look & feel of web site etc to be transferred without additional payment
General Rules Rule 15 Expenses for Travel etc Comments/ Examples • Line manager must authorise all expenses (no self authorisation) • Trips must NOT be extended to enable weekend stays away, even at personal expense • No claiming for spouses/partners • Travel by most economical method – Economy class travel only (air & rail) • Modest hotels and meals only • Personal expenditure (calls etc) etc will not be paid • No loyalty rewards to be collected on company business trips (e. g. Airmiles)
Checks and Balances Rule 1 Segregation of duties. Means strong procurement and CFO, independent of the CEO 2 Internal auditor to be appointed at an early stage 3 Maintain good asset tracking systems with accountability (no generic log ins). 4 Good management information vital Comments/ Examples Ensure visible compliance with Processes, procedures and business rules
Matters reserved for the board and signed by the chairman Rule 1 Incurring Debt (threshold 5, 000 gbp per item). 2 Employee remuneration 3 Employee headcount (firing and hiring). 4 Contracts over 1 year. 5 Contracts of value more than 5% of revenue 6 Incorporation and dissolution of companies 7 Annual report and accounts. 8 Appointment of auditors. Comments/ Examples
Inter-company Recharges for easy. Group companies Rule 1 The objective is obtain visibility of the true overhead cost of the easy. Group incubator business in London and NYC which will be re-charged to the parent company easy. Group Ltd of Jersey 2 Companies with minority shareholders of less than 10% will not be recharged any of the expenses of the incubator. For the avoidance of any doubt such companies will be expected to pay for true third party costs incurred on their behalf. 3 Companies with minority shareholders of more than 10% will be recharged a fixed annual fee as a lump sum negotiated between easy. Group and the outside shareholders for residing in the Rotunda 4 easy. Group employees seconded to another company, provided they spend 100% of their time with that company for an expected period of at least 6 months, will be paid out of the payroll of such company (however their contracts will remain with easy. Group). For the avoidance of any doubt all other easy. Group employees doing part time work for other companies will either be covered by the fixed annual lump sum, or they are in essence an expense of the shareholder to safeguard the investment in that company Comments/ Examples
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