National Grid 2015 Annual Report Download - page 44

Dear Shareholders,
Our Board is responsible for shaping the culture, values and
ethicsofNational Grid, both within the boardroom and across the
organisation, by setting the tone from the top and establishing high
standards of behaviour.
The changes introduced in 2014 to the UK Corporate Governance
Code and the Financial Reporting Council guidance on risk
management have highlighted the need for the Board to consider
ifthe current risk management and internal control practices and
culture of the Company support the spirit of the changes, not just
theletter.
The updates to the New Code have been considered by the Board
and refinements approved so we can report on compliance next year
asrequired. It is the intention of the Board that any changes to the
frequency and level of reporting received by the Board and Audit
Committee in relation to risk management, compliance and internal
control as a result of these updates, will also add value to the business.
A review of our compliance procedures is also underway to make
sure that we continue to develop and improve our compliance with
external reporting obligations. In order to further develop our internal
assurance programme, we formed the Engineering Assurance
Committee to promote the application of common, consistent,
engineering assurance methodologies across the Company.
The Board received an in-depth presentation on security and cyber
security which provided a framework for discussion around the
threats we face and the effectiveness of our strategy to mitigate the
inherent risks. We have made a significant investment over the last
five years to improve our capabilities in this area so we can adapt
toand address an ever-changing threat landscape. Following this
session, we agreed that responsibility for making sure we have
aneffective process for managing cyber security risk should be
delegated to the Audit Committee. You can read more about this
onpage 50. The Board will continue to receive an annual in-depth
presentation on information systems and security, including
cybersecurity.
This year, in addition to Nick Winser and Maria Richter stepping down
at the 2014 AGM, we have said goodbye to Philip Aiken and Tom King
and have welcomed John Pettigrew and Dean Seavers as Executive
Directors in the UK and US respectively. In my role as Chairman and
leader of the Board I am responsible for ensuring effectiveness in
allaspects of its role. This includes promoting effective relationships
and open communication between Directors and encouraging active
engagement by all members. This is particularly important as the
membership of the Board changes and new relationships are formed.
I am pleased to report that the positive outcome of the Board and
Committee evaluation process reflects this effectiveness. You can
read more about this on page46 and the rigorous selection process
prior to Dean’s appointment on page 58.
Clear and concise communications with our shareholders remain
afocus for the Board and we hope that the overview ofourbusiness
model on page 12 helps to articulate howwe create value for you,
ourshareholders, as well as our otherstakeholders.
Sir Peter Gershon
Chairman
Corporate Governance contents
49 Our Board and its committees
50 Audit Committee
55 Finance Committee
56 Safety, Environment and Health Committee
57 Nominations Committee
58 Board diversity and the Davies Review
58 Executive Committee
59 Management committees
59 Index to Directors’ Report and other disclosures
60 Directors’ Remuneration Report
44 Governance framework
44 Our Board
45 Board composition
45 Director induction and development
46 Board and committee evaluation
46 Non-executive Director independence
46 Director performance
48 Investor engagement
48 How our Board operates
42