Annual Report

24
Governance (cont.)
Governance
Ausgrid is a statutory State owned
corporation, established under the Energy
Services Corporations Act 1995 (NSW)
and the State Owned Corporations
Act 1989 (NSW). We are governed,
principally, by these two statutes
mentioned and our Constitution.
Good governance is a critical prerequisite
for a high performance organisation.
It provides a platform for a sustainable
future and reflects board commitment to
high standards of business integrity, ethics
and professionalism across all activities.
Good governance ensures the delivery
of outcomes sought by shareholders;
supports Ausgrid’s people and business
operations; and ensures sound ethical,
financial and risk management practices to
benefit Ausgrid’s customers and effective
compliance and auditing programs.
Joint Board of Directors
In 2014/15 Ausgrid, Endeavour Energy and
Essential Energy continued to operate as
separate legal entities although they were
managed by a Joint Board of Directors and
common Chief Executive Officer (CEO).
All members of the Joint Board, with
the exception of the Chief Executive
Officer, are appointed by the voting
shareholders for terms of up to five years.
Appointments may be renewed at the
discretion of the voting shareholders.
Each non‐executive director’s remuneration
is determined by the voting shareholders
and is paid by Ausgrid. The Chief Executive
Officer is not entitled to any additional
remuneration for being an executive director.
The role and responsibility
of the Joint Board
The Joint Board is responsible for
governance and, ultimately, the
performance of the company. The Joint
Board gives direction and exercises judgment
in setting the company’s strategy and
objectives, and is responsible for overseeing
its implementation. The Joint Board’s role
is to govern the company rather than to
manage it. The CEO is responsible to the
Joint Board for the day‐to‐day management
of the company and leads the Executive
Leadership Team in delivering the approved
strategy and achieving the performance
targets set by the Joint Board.
In governing the company the directors
must act in the overall best interests of
the company, although in respect of any
particular issue the Joint Board may act in
the best interests of the three companies
as a combined entity (as if the individual
businesses were being operated as parts of a
single enterprise) even if acting in that way
is not in the best interests of one company.
The Joint Board operates at all times
in accordance with its Charter which
is designed to provide an overarching
statement of board authority and
accountability for governance and
management of Ausgrid, consistent
with its Constitution and applicable
legislation. The Directors of the Joint
Board have adopted Board Policies
that implement the Board Charter and
have declared that they will be bound
by the company’s Code of Conduct
Joint Board Committees
The role of the Joint Board is to provide
strategic guidance and effective oversight
of management. In undertaking this
role, the Joint Board has established
the following committees:
Audit and Risk Committee
The Audit and Risk Committee meets at
least five times per year. The committee’s
responsibilities cover matters relating
to the financial affairs and business
risks, internal and external audits,
risk management, compliance and
fraud prevention. In addition, the
committee examines any other matters
referred to it by the Joint Board.
Safety, Human Resources and
Environment Committee
The Safety, Human Resources and
Environment Committee meets at least
four times per year. The committee assists
the board in fulfilling its responsibilities
with regard to work health and safety and
environmental practices, and to discharge
the Joint Board’s responsibilities of oversight
and corporate governance in relation to
human resources matters. In addition,
the Committee examines any other
matters referred to it by the Joint Board.
Nominations Committee
The Nominations Committee meets as
required and assists the Joint Board in
fulfilling its responsibilities with regard to
director appointments and re‐appointments.
The Nominations Committee consists of
the Chairman of the Joint Board and two
non‐executive directors. Membership is
subject to rotation so that non‐executive
directors are not participating in the
review of their own re‐appointment.
Director indemnity and insurance
Under the State Owned Corporations Act
1989 and the Company’s Constitution,
Ausgrid may, with the approval of its
Shareholder Ministers, indemnify its
directors against liabilities incurred in the
course of their duties. This indemnity does
not cover the director if the liability arises
out of conduct involving lack of good faith.
Ausgrid’s non‐executive Directors have
been granted indemnity in accordance
with Shareholder approval and the
NSW Treasury State Owned Corporation
Indemnity Policy. Ausgrid also has in place
a Directors’ and Officers’ liability and
professional indemnity insurance policy.