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Corporate governance

Find out about how we comply with the UK Corporate Governance Code. Read or download our annual report and accounts and discover how we maintain a high standard of corporate political engagement.

Corporate governance

National Grid is subject to the UK Corporate Governance Code, which is a part of UK company law and features a set of principles of good corporate governance for listed companies. For the year ended 31 March 2019, the Board considers that it complied in full with the 2016 Code.

We’ll report on compliance with the new UK Corporate Governance Code 2018 in our 2019-20 Annual Report and Accounts.

Corporate governance documents

Here you can find documents relating to corporate governance, including articles of association, terms of reference, ethical conduct, director termination payment and public position statements.

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.

Following the 2020 AGM and the shareholder meeting on 22 April 2021 the Company’s borrowing restrictions in Article 93 have been increased by ordinary resolution to £55bn.

Board Governance

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.

Diversity and differences in listing standards

Read about our approach to diversity and how this applies to our Board. Find out about how our corporate governance practices differ from the New York Stock Exchange (NYSE) listing standards.

Diversity and the Davies Review

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.

Our executive and leadership team members are regularly assessed against achievement of individual objectives and key leadership qualities, helping us build a sustainable development and succession plan. We have programmes and initiatives in place to help increase diversity in our senior management positions.

Board diversity policy

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.

Following the recommendations of the Hampton-Alexander Report, the Nominations Committee extended the target to the Executive Committee and its direct reports.

We currently have 38.5% women on our Board (as at January 2021), 42.9% women on our Executive Committee (as at May 2021) and 33.8% women direct reports to the Executive Committee (as at June 2020).

The Parker Review recommended that every FTSE 100 board should have at least one director from a non-white ethnic minority by 2021. The Nominations Committee reflected this recommendation in a new objective.

Nominations Committee reviews

The Nominations Committee regularly reviews the balance of skills, experience, independence, diversity and knowledge on the Board and its Committees. In all appointments, however, we secure the best candidate for the relevant role.

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

NYSE - differences in listing standards

National Grid is listed on the NYSE. This means we must disclose differences in our corporate governance practices adopted as a UK listed company, compared with those of a US company.

Our governance practices are primarily based on the requirements of the UK Corporate Governance Code (the Code). However, they substantially conform to those required of US companies listed on the NYSE.

The main differences to US practices are described below.

Board member independence

The NYSE rules and the Code apply different tests for the independence of board members.

Nominating/corporate governance committee

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. The Nominations Committee makes recommendations to the Board on certain responsibilities of a corporate governance committee.

Adoption and disclosure of corporate governance guidelines

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 don’t require the Company to adopt and disclose separate corporate governance guidelines.

Audit committee

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, 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.

Compensation Committee

The NYSE rules require a compensation committee composed entirely of independent directors. They also 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 their appointment, retention and termination.