National Grid 2015 Annual Report Download - page 42

Strategic Report
Internal control and risk management continued
Strategic objective Risk description Example of mitigations
Engage our
people
Inability to secure the business capacity,
appropriate leadership capability and
employee engagement levels required
todeliver our vision and strategy.
It is through the high-quality work of our
employees that we will achieve our vision,
respond to the changing needs of our
stakeholders and create a competitive
advantage. Obtaining and fostering an
engaged and talented team that has
theknowledge, training, skills and
experience to deliver on our strategic
objectives is vital to our success. We must
attract, integrate and retain the talent we
need at all levels of the business.
• We have identified the core capabilities that align with our
strategic ambition and defined our set of leadership standards.
• We have filled key leadership roles with a mix of internal and
external hires.
• We are involved in a number of initiatives to help secure the
future engineering talent required (see page 24).
• We continue to develop our succession plans for key roles,
including leadership.
• We continue to actively promote inclusion and diversity.
• We monitor employee engagement and formally solicit employee
opinions via a Company-wide employee survey annually.
Deliver
operational
excellence
Failure to achieve levels of financial
performance required to meet regulatory
requirements.
The Group operates under a number of
regulatory regimes and we must maintain
the performance levels required. Failure to
achieve the agreed returns could damage
our reputation and threaten future growth
opportunities and regulatory arrangements.
• We have a US strategy focused on safety and reliability,
customer responsiveness, stewardship and cost
competitiveness. Performance measures are tracked and
reported monthly. US jurisdictional presidents continue
todevelop strong relationships with local regulators and
communities. A Performance Excellence framework is
firmlyestablished to deliver sustainable and innovative
performance improvements.
• The UK operating model implemented in 2013 to support our
performance under RIIO is now established and we continue
toroll out our Performance Excellence framework across the
business. We actively engage with local communities and
non-governmental actors.
• We monitor network reliability and customer satisfaction
asKPIs, as described on pages 18 and 19.
Failure to deliver appropriate information
systems and data integrity.
The Company is increasingly reliant on
technology to support and maintain our
business-critical processes. We must be
able to rely on the performance of these
systems and the underlying data to
demonstrate the value of our business to our
shareholders, and to meet our obligations
under our regulatory agreements, and
comply with agreements with bond holders
and other providers of finance.
• We implemented a new US enterprise resource planning
system at the end of 2012. After a significant effort to combat
programme difficulties, the system is now stabilised and
enhancements todrive business value are under way.
• We are undertaking a programme to strengthen identified
weaknesses in US controls over financial reporting.
• We are implementing a global information management
framework focusing on data integrity and security.
• We completed a data assurance programme last year
andactions to improve our data quality and integrity
processesbased on the results are being managed by
thebusiness functions.
We experience a catastrophic/major
cybersecurity breach.
Due to the nature of our business we
recognise that our critical national
infrastructure (CNI) systems may be a
potential target for cyber threats. We
mustprotect our business assets and
infrastructure and be prepared for any
malicious attack.
• We use industry best practices as part of our cyber security
policies, processes and technologies.
• We continually invest in cyber strategies that are commensurate
with the changing nature of the security landscape. This
includes collaborative working with DECC and the Centre for
Protection of National Infrastructure (CPNI) on key cyber risks
and development of an enhanced CNI security strategy and our
involvement in the US with developing the National Institute of
Standards and Technology Cyberspace Security Framework.
Failure to prevent a significant process
safetyevent.
Safety is paramount. Some of the assets
owned and operated by National Grid are
inherently hazardous and process safety
incidents, whilst extremely unlikely,
canoccur.
• We continue to commit significant resources and financial
investment to maintain the integrity of our assets and we strive
tocontinuously improve our key process safety controls.
• We continue to implement our Group-wide process safety
management system to ensure a robust and consistent
frameworkof risk management exists across our higher
hazardasset portfolio.
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