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Corporate governance

National Grid is subject to the UK Corporate Governance Code 2018 (the Code). The Code sets out the principles to be applied relating to the good governance of listed companies. 

For the year ended 31 March 2020, the Board considers that it complied in full with the 2018 Code.

Articles of Association

The Company's Articles of Association are one of its core governance documents.  The Articles of Association were amended by special resolution at the Company's Annual General Meeting on 30 July 2012.

Terms of reference

Code of ethics & ethical business conduct

In response to requirements under the Sarbanes-Oxley Act 2002 the Board has adopted a Code of Ethics for senior financial professionals. The full text of this code is disclosed below:

There are currently no amendments or waivers to the Code of ethics for senior financial professionals.

Davies review 'women on boards'

We aim to develop and operate our business with an inclusive and diverse culture; with equal opportunity in recruitment, career development, training and reward. These policies support the attraction and retention of the best people, improve effectiveness, deliver superior performance and enhance our success.

Our executive and leadership population is regularly and rigorously assessed against achievement of individual objectives and key leadership qualities, to help build a sustainable development and succession plan. We have a number of programmes and initiatives in place to increase diversity in our senior management positions, including executive sponsorship and mentoring of high-potential females and ethnic minority managers.

Our Board diversity policy reaffirms our aspiration to meet and exceed the voluntary target of 33 per cent of Board positions to be held by women by 2020, as set out by Lord Davies. The Nominations Committee is responsible for developing measurable objectives to support the implementation of the Board diversity policy and for monitoring progress towards the achievement of these objectives. In April 2017, the Nominations Committee reviewed these objectives and, following the recommendations of the Hampton-Alexander Report, the Committee extended this voluntary target of 33% women by 2020 to the Executive Committee and direct reports to this committee. The Committee also reviewed The Parker Review, published in November 2016, which recommends that every FTSE 100 board should have at least one director from a non-white ethnic minority by 2021. The Committee reflected this recommendation in a new objective. The Nominations Committee regularly reviews the balance of skills, experience, independence, diversity and knowledge on the Board and its Committees, but is mindful that in all appointments we secure the best candidate for the relevant role. 

Our Board continues to support the engagement of executive search firms who have signed up to the Voluntary Code of Conduct on gender diversity and best practice.

We currently have 33.3% women on our Board (as at 17 June 2020) and 33.3% women on our Executive Committee (as at 17 June 2020) and 33.8% women direct reports to the Executive Committee (as at 17 June 2020).

Updated 25 June 2020

NYSE - differences in listing standards

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 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 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. Although 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.
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