National Grid 2007 Annual Report Download - page 6

4 National Grid Electricity Transmission Annual Report and Accounts 2006/07
Objectives and strategy
Strategic review
National Grid has undertaken a thorough and disciplined
strategic review of its business which will set our direction for
the next 5 to 10 years. In conducting this review, National Grid
considered market trends and opportunities that exist in the
utility sector, our market position, how we derive value from our
businesses and the views of the capital markets. National Grid
announced its conclusions in November 2006 and we have
updated our objectives accordingly.
Focus
National Grid’s future is about becoming more focused – a clear
business model based on the ownership and operation of large
scale asset intensive businesses, focusing on its principle
growth markets, including electricity infrastructure in the UK.
Integration
We aim to run our businesses in a more integrated way –
organising our activities along lines of business, supported by
effective and efficient shared services and information systems.
This involves deploying proven processes, common systems
and best practices within each business, supported by common
operating principles, and safety and environmental standards.
In this way, we will maximise the competitive advantages that
come from being part of an international organisation. However,
it is critical that we balance this with the need to provide
excellent service to customers and to maintain and build local
relationships with other key stakeholders.
Discipline
We plan to be more disciplined in the application of best
practice. Increasingly, we will standardise our approach,
applying even greater rigour to financial discipline, ensuring that
we have the capital to grow, but maintain the investor
confidence that comes from a disciplined approach to our
balance sheet.
Objectives
Our primary objective is to grow our business in order to create
value for National Grid’s shareholders. We can only create
value if we achieve operational excellence and continue to
improve our financial performance, we invest for the future and
are financially disciplined, and we develop, recruit and retain
skilled, talented and motivated people. In each area, we aim to
increase our focus, benefit from improved integration and be
disciplined in our approach.
As a consequence we have identified specific objectives in the
following areas:
Performance We aim for operational excellence by operating to
the highest standards of safety, reliability and
efficiency. We aim to continue to improve our
financial performance.
Growth We will invest in our existing businesses to
generate future growth. We will be financially
disciplined in the way we invest and in the way we
manage our balance sheet.
Talent We aim to maximise the contribution made by our
employees by motivating our people to strive for
continued improvement, developing their skills and
talents, and by promoting a culture that recognises
and respects inclusion and diversity.
Our strategy is underpinned by our commitments to developing
strong and valued relationships with our customers, regulators,
suppliers and the communities in which we operate and to
acting responsibly, including specific commitments to reducing
our environmental impact and to corporate governance and
business ethics.
Relationships We aim to improve our relationships with
customers, regulators, suppliers and the
communities in which we operate by focusing on
the areas that are important to them, such as the
quality of service we provide to customers, the
quality of information we provide to regulators, by
investing in local communities and by the way we
address the concerns of, and interact with, all our
stakeholders.
Responsibility We believe operating responsibly is essential to the
way we conduct our operations, invest, develop our
people and manage our relationships and so
responsibility underpins everything we do.
We are committed to taking positive action to
reduce our contribution to climate change and our
other impacts on the environment. We want to
operate to the highest standards of corporate
governance and we believe in strong business
ethics, based around our core values of respect,
integrity and ownership.
Risk
Our principal risks relate to the achievement of our objectives
and strategy, as we believe that by delivering on these
objectives we will achieve our principal objective of delivering
growth to drive shareholder value. We set out how we intend to
achieve our objectives below and we describe our performance
during the year against those objectives on pages 13 to 19.