TransGrid Board of Directors

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1 TransGrid Board of Directors Code of Conduct Overview Our Code of Conduct for directors is only one of many elements supporting a self-regulatory approach to the conduct of our organisation. Directors are expected to make a substantial contribution and be an active member of the board. With corporate governance and company performance coming under close scrutiny by shareholders and other stakeholders, directors need to be aware of the personal responsibility they undertake in accepting a directorship. The benefit of this code is that it provides stability in a code of behaviour that stands outside the constantly changing legal and regulatory framework. The broad use of ethical standards embodied in a voluntary code imposes more accountability for professional behaviour compared to Regulation. Purpose For Directors this Code is intended to promote the highest ethical and professional standards in Directorship of TransGrid. The principles set out in the Code are relevant to Executive and Non-Executive Directors. It provides guidance to Directors to assist them in carrying out their duties and responsibilities and defines the standards of professional conduct, which is expected by the NSW Government. In addition, this document complies with the Premier s Memorandum 2001/17 indicating the need for a Code of Conduct for Directors. The document is not an exhaustive statement of Director s obligations. It outlines fundamental values and principles that define the standards of behaviour expected of members of TransGrid s Board and associated Committees. TransGrid has had in place a separate Code of Ethics and Conduct for all its employees since its inception. This Code is updated on a regular basis and attendance at workshops in relation to the Code is mandatory for all employees. Scope These guidelines apply to both the Board and any review or advisory Committee which TransGrid s Board may put in place from time to time. Principles Those who work within the public sector must maintain standards of conduct and ethics that maintain public confidence and trust. Public confidence means that the public has the right to expect that public sector organisations demonstrate the highest integrity and competence treating all citizens fairly, reasonably and equitably. 1 / TransGrid Board of Directors Code of Conduct

2 Responsibility and Impartiality: This encompasses compliance with any relevant legislative, industrial and administrative requirements and implementation of policies and decisions of the Government of the day in an impartial manner. Respect for people: Members of the public and colleagues are to be treated fairly and consistently, in a non-discriminatory manner with proper regard for their rights and obligations. Public officials should perform their duties in a professional and responsible manner and also ensure decisions and actions are reasonable, fair and appropriate to the circumstances, based on a consideration of the relevant facts, and supported by adequate documentation. Honesty integrity and public interest: In performing their duties public officials must promote confidence in the integrity of public administration. They should always act honestly and in the public interest, rather than in their private interest. Responsive service: Directors should have an understanding of the role of the Portfolio Minister and Shareholding Ministers in relation to the TransGrid Board. They should also have an understanding of who their stakeholders are. Economy and efficiency: Public officials should look for ways to improve organisational performance and achieve high standards of public administration. They should use their authority and available resources and information only for the work related purpose intended. Director Responsibilities Duties to TransGrid Each Director should endeavour to ensure that the functions of the Board have been clearly specified; are properly understood, and are completely discharged in the interests of TransGrid. A Director should endeavour to ensure that the management of the company is competent and is devoting its best endeavours in the interests of TransGrid. Each Director should endeavour to ensure that TransGrid is financially viable, properly managed and constantly improved so as to protect and enhance the interests of the shareholders. Duties to other Stakeholders Directors must comply with the legal framework governing their operations and must be conscious of the impact of TransGrid on society. Without limiting in any way, the nature of the issues with which the Director must be concerned in the running of the business, particular attention should be paid to the environment, questions of occupational health and safety, industrial relations, equal opportunity for employees, the impact of competition and consumer protection rules, and other legislative initiatives that may arise from time to time. Although a Director owes primary duty to the shareholder, the responsibilities imposed on a Director under various Acts of Parliament clearly demand that the Director evaluate actions in a broader social context. Personal and Professional Behaviour Directors need a clear understanding of their public duty and legal responsibilities and must act for the proper purpose and without exceeding their powers. The primary source of information on the role and functions of the Board is the Board s enabling legislation which establishes the Board and its functions. A Director should attend all Board Meetings but, where attendance at meetings is not possible, appropriate steps should be taken to obtain leave of absence and provide advice of non-attendance as soon as possible. 2 / TransGrid Board of Directors Code of Conduct

3 A Director should arrive at the appointed meeting location prior to the advised meeting commencement time to ensure meetings run to time. A Director should have read, understood and be prepared to discuss all issues included in Board Papers and/or Reports. A Director must acquire knowledge of TransGrid s business, the statutory and regulatory requirements affecting Directors in the discharge of their duties, and be aware of the physical, political and social environment in which TransGrid operates. In order to be fully effective, a Director should have access to all relevant information to be considered by the Board. This information should be made available in sufficient time to allow proper consideration of all relevant issues. A Director should endeavour to ensure that the systems are established within the company to provide the Board, on a regular and timely basis, with necessary data to enable them to make a reasoned judgement and so discharge their duties of care and diligence. A Director should endeavour to ensure that TransGrid complies with the law and strives for the highest standards of business and ethical conduct. Decisions, reasons for those decisions and processes of the Board or an associated Committee must be documented and minutes of all official meetings prepared and retained as official records. Use of Information Directors must not disclose official information or documents acquired as a consequence of membership of the Board or an associated Committee other than as required by law or when the Director has been given proper authority to do so. A Director must not make improper use of information acquired by virtue of the Director s position. This prohibition applies irrespective of whether the Director would gain directly or indirectly a personal advantage for any associated person or might cause detriment to TransGrid. Matters such as trade secrets, processes, methods, advertising and promotional programs, sales and statistics affecting financial results must not be disclosed. Professional Integrity A Director must be prepared, if necessary, to express disagreement with Board colleagues. If there is any doubt whether a proposed course of action is inconsistent with a Director s fiduciary duties then the course of action should not be supported. When a Director feels so strongly as to be unable to acquiesce in a decision of the Board, some or all of the following steps should be considered: making the extent of the dissent and its possible consequences clear to the Board as a means of seeking to influence the decision asking for additional legal, accounting or other professional advice asking that the decision be postponed to the next meeting to allow time for further consideration and informal discussion tabling a statement of dissent and asking that it be minuted writing to the Chairman, or all members of the Board, and asking that the letter be filed with the minutes if necessary, resigning, and consider advising the appropriate regulator. 3 / TransGrid Board of Directors Code of Conduct

4 Gifts and Benefits TransGrid s Directors are public officials and are required to perform their functions with integrity, impartiality and honesty. During their term of appointment, they may be offered certain gifts or benefits. It is critical to be wary in regard to the acceptance of gifts and benefits as this can place a public official in a position where they feel obliged to act contrary to rules of integrity, impartiality and honesty. Directors must not accept gifts or benefits that could place them under an actual or perceived financial or moral obligation to other organisations or to individuals. To avoid the possibility of being compromised, only gifts or hospitality of token or nominal value may be accepted in some circumstances. Accepting such gifts or benefits is essentially a matter of judgment. A Register of Gifts and Benefits is maintained to enable the receipt and disposal of gifts to be conducted in an open and transparent manner. The information recorded should include who made the offer, who received the gift or benefit, the date, and the decision made on its allocation. Recognising and Managing Conflicts of Interest A Director must disclose interests to the Board (which include positions and pecuniary interests) in corporations, partnerships or other businesses that may be relevant to the activities of the Board or an associated Committee. A member s interests include those of an associate or close relative. A register of such interests is maintained by TransGrid. A conflict of interest may arise for example from: Other Directorships or employment Professional and business interests and associations Investment interests Family relationships. Disclosure of Interests Where a private interest may impinge upon a Board or Committee decision, the Director must, as soon as practicable, disclose full and accurate details of the interest or issue to the Board or Committee. The details of the notification of material personal interests must be recorded. In most circumstances, a Director who has declared a material personal interest in a matter which is being considered at a meeting must not be present while the matter is being discussed and must not vote on the matter. However, the Director may be present with the approval of the other Directors, provided a resolution has been passed that fully explains the Director s interest and that the other directors are satisfied that the Director should be allowed to vote. Conflicts Of Interest A Director must not take improper advantage of their position as a Director to gain, directly or indirectly, a personal advantage or an advantage for any associated person, which might cause detriment to TransGrid. Where a conflict does arise, a Director must consider whether to refrain from participating in the debate and/or voting on the matter, whether to be absent from discussion of the matter, whether to arrange that the relevant Board papers are not sent, or, in an extreme case, whether to resign from the Board. Where a Director chooses to be absent from the meeting, consideration should be given as to whether expertise that would be contributed by 4 / TransGrid Board of Directors Code of Conduct

5 the Director is otherwise available. In the case of a continuing material conflict of interest, a Director should give careful consideration to resigning from the Board. An Executive Director must always be alert to the potential for conflict of interest between management interests and the Director s fiduciary duties. Reporting Suspected Corrupt Conduct Principal Officers are required to report corrupt conduct or suspected corruption to the Independent Commission Against Corruption (ICAC). TransGrid s Principal Officer is the Managing Director. Corrupt conduct can be generally understood as the dishonest or partial exercise of public official functions. It may also involve the conduct of non-public officials which adversely affects the honest and impartial exercise of a public official s functions. For conduct to be considered corrupt under the definition, it has to be serious enough to involve a criminal offence, a disciplinary offence, be grounds for dismissal or, in the case of Members of Parliament, involve a substantial breach of their Code of Conduct. A report must be made to the ICAC as soon as a reasonable suspicion exists that corrupt conduct may have occurred or may be occurring. Matters must be reported to the ICAC regardless of any duty of secrecy or other restriction on disclosure. It is important that reports to the ICAC be made without advising the person(s) to whom the report relates and without publicity. The Protected Interest Disclosures Act, 1994 provides protection to public officials who voluntarily report suspected corrupt conduct. Board and Committee members can make reports to the Chairman of the Board or to the principal officer of the relevant public authority where that is available to the Board or Committee in accordance with the agency s internal reporting guidelines. Disclosures concerning: Corrupt conduct should be made to the Independent Commission Against Corruption Maladministration should be made to the NSW Ombudsman Serious and substantial waste of public money should be made to the NSW Auditor General. Relevant Legislation Energy Services Corporations Act 1998 Electricity Supply Act 1995 State Owned Corporations Act 1995 Anti Discrimination Act 1977 The Government Information (Public Access) Act 2009 Independent Commission Against Corruption Act 1989 Work Health & Safety Act 2011 Ombudsman Act 1974 Protected Interest Disclosures Act 1994 Public Finance & Audit Act 1983 Public Sector Management Act / TransGrid Board of Directors Code of Conduct

6 Policy and Guidelines NSW Treasury Guidelines for Boards of Government Businesses NSW Department of Premier & Cabinet NSW Government Boards and Committees Guidelines NSW Department of Premier & Cabinet Conduct Guidelines for Members of NSW Government Boards and Committees Public Service Commission Guidelines for Developing and Implementing a Code of Conduct ASX Corporate Governance Principles and Recommendations 3rd Edition TransGrid Code of Ethics and Conduct. Publications Independent Commission Against Corruption - The First Four Steps Building Organisational Integrity The NSW Audit Office - On Board: Guide to Better Practice for Public Sector Governing and Advisory Boards Premier s Department NSW - Boards and Committees Handbook. Code of Conduct Summary A Director must act honestly, in good faith and in the best interests of TransGrid as a whole A Director has a duty to use care and diligence in fulfilling the functions of office and exercising the powers attached to that office A Director must use the power of office for a proper purpose, in the best interest of TransGrid as a whole A Director must recognise that the primary responsibility is to TransGrid s Shareholders but should, where appropriate, have regard for the interests of all stakeholders A Director has a duty to prepare for and attend all Board Meetings A Director must not make improper use of information acquired as a Director A Director must not take improper advantage of the position of Director A Director must not allow personal interests, or the interests of any associated person, to conflict with the interests of TransGrid A Director has an obligation to be independent in judgement and actions and to take all reasonable steps to be satisfied as to the soundness of all decisions taken by the Board of Directors Confidential information received by a Director in the course of the exercise of directional duties remains the property of TransGrid and it is improper to disclose it, unless that disclosure has been authorised A Director should not engage in conduct likely to bring discredit upon TransGrid A Director has an obligation, at all times, to comply with the spirit, as well as the letter of the law and with the principles of this Code. 6 / TransGrid Board of Directors Code of Conduct