UK Corporate Governance Code

 

National Grid is subject to the UK Corporate Governance Code (the Code).  The Code sets out principles and provisions relating to the good governance of listed companies.

The Board considers that it complied in full with the provisions of the Code and additionally, the new edition of the UK Corporate Governance Code 2012 (the new Code) during 2012/13 taking account of the transitional arrangements suggested by the Financial Reporting Council for external audit tendering.  Further information is available within the National Grid plc Annual Report and Accounts 2012/13.

 

Key documents associated with Corporate Governance are available in this section.

Corporate governance practices: differences from the New York Stock Exchange (NYSE) listing standards

The Company is listed on the NYSE and is therefore required to disclose differences in its corporate governance practices adopted as a UK listed company, compared with those of a US company.

The corporate governance practices of the Company are primarily based on the requirements of the UK Corporate Governance Code (the Code) but substantially conform to those required of US companies listed on the NYSE.  The following is a summary of the significant ways in which the Company’s corporate governance practices differ from those followed by US companies under the Section 303A Corporate Governance Standards of the NYSE.

  • The NYSE rules and the Code apply different tests for the independence of Board members.
  • The NYSE rules require a separate nominating/corporate governance committee composed entirely of independent directors. There is, however, no requirement for a separate corporate governance committee in the UK. Under the Company’s corporate governance policies, all Directors on the Board discuss and decide upon governance issues and the Nominations Committee makes recommendations to the Board with regard to certain of the responsibilities of a corporate governance committee.
  • The NYSE rules require listed companies to adopt and disclose corporate governance guidelines. While the Company reports compliance with the Code in each Annual Report and Accounts, the UK requirements do not require the Company to adopt and disclose separate corporate governance guidelines.
  • The NYSE rules require a separate audit committee composed of at least three independent members.  While the Company's Audit Committee exceeds the NYSE's minimum independent Non-executive Director membership requirements, it should be noted that the quorum for a meeting of the Audit Committee, of two independent Non-executive Directors, is less than the minimum membership requirements under the NYSE rules.
  • The NYSE rules require a compensation committee composed entirely of independent directors, and prescribe criteria to evaluate the independence of the committee's members and its ability to engage external compensation advisors.  While the Code prescribes different independence criteria, the Non-executive Directors on the Remuneration Committee have each been deemed independent by the Board under the NYSE rules.  Athough the evaluation criteria for appointment of external advisors differ under the Code, the Remuneration Committee is solely responsible for appointment, retention and termination of such advisors.

Global lines of business

Transmission

We own and operate gas and electricity transmission networks in Great Britain and England & Wales respectively and an electricity transmission network in the northeastern US. We also operate the electricity transmission network in Scotland..

Gas Distribution

We own and operate gas distribution systems in the UK and the northeastern US

Electricity Distribution & Generation

We distribute electricity to approximately 3.4 million customers in upstate New York and New England.

Other Businesses

Our businesses comprise National Grid Metering, OnStream, National Grid Grain LNG and National Grid Property.