National Grid 2016 Annual Report Download - page 54

Board and committee evaluation
We are back to the first year of the Company’s three-year
performance evaluation cycle. The last externally facilitated
evaluation took place in 2012/13. In line with the Code,
for the year 2015/16 we have undertaken a formal and
rigorous externally facilitated Board effectiveness review.
We appointed Independent Audit to undertake the
evaluation. Independent Audit, which has no other
connection to the Company, considered the Board and
committees’ performance with a particular focus on risk.
The evaluation was conducted between November 2015
and April 2016 and included:
• an initial planning meeting with the Chairman,
Group General Counsel & Company Secretary
and Independent Audit to agree the approach
and expectations of the evaluation;
• one-to-one interviews based on the same set of
questions conducted by Independent Audit with the
Board members, Group General Counsel & Company
Secretary, Head of Secretariat and other members
of senior management who regularly interact with
the Board and its committees;
• Independent Audit attending the Board meeting
in January to observe behaviours and interactions;
• a review of the 2015 Board and committee papers
and minutes, and a selection of other relevant
governance documents to form a view of the
effectiveness of the Board and its committees;
• the preparation of a report by Independent Audit
which was initially shared with the Chairman and
Group General Counsel & Company Secretary; and
• the presentation of results presented for discussion at
the Board in April with the proposed recommendations
presented in May.
The effectiveness of each of the Board committees
was taken into account in the evaluation. All committees
received an update on the external evaluation and
discussed any recommended actions. The evaluation
identified a number of specific recommendations to
take forward for the Audit and Nominations Committees.
Independent Audit concluded that the Board was working
well even though it had seen changes in membership over
the past few years and thought the Board now benefitted
from a good mix of experience in both the UK and US. The
Board agenda demonstrated there was balance between
strategic, operational and regulatory matters, with good
engagement of the Board members supported by thorough
work by management. They also made a number of
recommendations in relation to risk, principally focused
on cascading risk management further down the business.
Actions for 2016/17
Independent Audit concluded there were six main
recommendations for further development. In May
the Board discussed and agreed the following actions:
• to give a renewed push to improve Board and
committee papers, including the enforcement
of standards of papers and timely submissions;
• to bring out strategic themes more clearly in the Board
papers, pre-read papers and the Chief Executive’s report;
• the Chairman will discuss with the Non-executive
Directors the strategy items on the draft agenda for
the next following meeting and articulate the views
from the Non-executive Directors as to what is required
at the Board meeting including any questions that
need answering;
• integrate risk more effectively into strategy development
and planning;
• continue to consider the skills and capabilities needed
on the Board for executing the Company’s future
strategy; and
• to review whether there is enough focus on people
on the Board agenda.
Board and committee membership and attendance
The table below sets out the Board and committee
attendance during the year to 31 March 2016. Attendance
is shown as the number of meetings attended out of the
total number of meetings for the individual Director during
the year.
If any Directors are unable to attend a meeting, they are
encouraged to communicate their opinions and comments
on the matters to be considered via the Chairman of the
Board or the relevant committee chairman. Instances
of non-attendance during the year were considered and
determined as being reasonable in each case due to the
individual circumstances. In relation to the Board meeting
non-attendances, John Pettigrew and Steve Holliday were
precluded from attending the ad hoc Board meeting in
November as it related to CEO succession and they were
therefore both conflicted from attending. Dean Seavers
was unable to attend a Board meeting due to personal
reasons. Non-attendance at the Committee meeting
was due to the short notice of the Nominations and
Remuneration Committees ad hoc meetings and members
having prior commitments, and also for personal reasons.
The Board has determined that Mark Williamson, Chairman
of the Audit Committee, has recent and relevant financial
experience; is a suitably qualified audit committee financial
expert within the meaning of the SEC requirements; and is
independent within the meaning of the New York Stock
Exchange listing rules.
Director Board Meetings Audit Finance Nominations Remuneration
Safety,
Environment
& Health
Sir Peter Gershon 10 of 10 – – 7 of 7 – –
Steve Holliday19 of 10 – 3 of 4 – – –
John Pettigrew29 of 10 – – – – –
Andrew Bonfield 10 of 10 – 4 of 4 – – 4 of 4
Dean Seavers 9 of 10 – – – – –
Nora Mead Brownell 10 of 10 – – 7 of 7 6 of 6 4 of 4
Jonathan Dawson 10 of 10 – 4 of 4 7 of 7 6 of 6 –
Therese Esperdy 10 of 10 5 of 5 4 of 4 7 of 7 – –
Paul Golby 10 of 10 5 of 5 – 7 of 7 5 of 6 4 of 4
Ruth Kelly 10 of 10 5 of 5 4 of 4 6 of 7 – –
Mark Williamson 10 of 10 5 of 5 – 7 of 7 6 of 6 –
Attendance notes
1. Steve Holliday stepped down as Chief Executive with effect from 31 March 2016.
2. John Pettigrew became Chief Executive with effect from 1 April 2016.
52 National Grid Annual Report and Accounts 2015/16 Corporate Governance
Corporate Governance continued