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 of the Code
We have had a Code of Ethics and Conduct for all of our employees since TransGrid was formed in 1995. The code is updated regularly and employees are required to attend workshops in relation to the code updates.
The code intends to promote the highest ethical and professional standards for the directorship of TransGrid. The code offers guidance to directors to help them carry out their duties and responsibilities. It also outlines the standards of professional conduct expected by the NSW Government.
This document also meets the terms of the Premier’s Memorandum 2001-2017 which indicates the need for a Code of Conduct for directors.
The principles set out in the code are relevant to executive and non-executive directors.
The code is not a full statement of director’s duties. It outlines fundamental values and principles that identify the standards of behaviour expected of members of our board and associated committees.
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.
The Code of Conduct, defining the standards of behaviour expected of directors, is based on the NSW Government’s document 'A Model Code of Conduct for NSW Public Agencies' and the Australian Institute of Company Directors 'Code of Conduct'.
Principles of Conduct for the Public Sector
Members of TransGrid’s Board are public officials. Therefore they are subject to the general principles of conduct that apply to public sector employees.
Those who work within the public sector need to 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 display the highest integrity and competence, treating all citizens fairly and reasonably.
This responsibility includes complying with any relevant legislative, industrial and administrative requirements. It also includes implementing policies and decisions of the NSW Government.
Directors should understand the role of the Portfolio Minister and shareholding ministers in relation to the board.
Duties to TransGrid
Each director should make sure that the functions of the board have been made clear; are properly understood; and are completely carried out in the interests of TransGrid.
A director should make sure that the management of the company is competent and is offering its best efforts in the interests of TransGrid.
Each director should make sure that TransGrid is profitable, properly managed and always improved so we can protect and enhance the interests of the shareholders.
Duties to Other Stakeholders
Directors must comply with the legal frameworks governing their operations and must be mindful of the impact of TransGrid on society.
Directors should pay specific attention to issues to do with the environment, occupational health and safety, industrial relations, equal opportunity for employees, the impact of competition and consumer protection rules, and other legislative initiatives that may come up from time to time. However this should be done without affecting the director’s duties in running the business.
Although a director’s main duty is to the shareholder, the responsibilities imposed on a director under various Acts clearly demand that the director also acts in a socially responsible way.
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 responsibilities.
A director should attend all board meetings. If a board member can’t attend a meeting they should obtain a leave of absence and inform all other directors of their non-attendance as early as possible.
A director should arrive at the location of the meeting before the planned starting time to make sure the meeting runs on time.
A director should have read, understood and be prepared to discuss all issues included in board papers and/or reports.
A director must learn about TransGrid’s business, the statutory and regulatory requirements affecting directors in the performance of their duties, and be aware of the physical, political and social environment in which we operate.
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 before the board meeting to allow the director to consider all relevant issues.
A director should attempt to make sure that systems are established within the company to give the board the necessary data to allow them to make rational decisions. This will allow directors to perform their duties with care and diligence.
A director should try to ensure that TransGrid complies with the law and aims 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 recorded and minutes of all official meetings prepared and kept as official records.
Use of Information
Directors must not reveal official information or documents they obtain as a result of being a member of the board or an associated committee unless it is required by law or when the director has been given authority to do so.
A director must not use information they receive as a part of their position, for purposes other than what it is intended for. This is regardless of whether the director would have gained a personal advantage or not, or whether the director’s actions would have hurt TransGrid’s reputation.
Trade secrets, processes, methods, advertising and promotional programs, sales and statistics affecting financial results must not be revealed by directors.
Professional Integrity
A director must be prepared to disagree with other members of the board if needed. If a director believes that a course of action will conflict with their duties as a board member then they should not support the action.
When a director feels strongly enough to disagree with a decision of the board, some or all of the following steps should be considered:
- Try to influence the rest of the board to change their decision by outlining why they disagree with a course of action and the possible consequences of the action;
- Asking for additional legal, accounting or other professional advice;
- Asking that the decision be delayed to the next meeting so that the board member has time for more thought 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; and
- If necessary, resign, and consider advising the appropriate regulator.
Gifts and Benefits
Our directors are public officials and need to perform their duties with integrity, impartiality and honesty. During their term of appointment, they may be offered certain gifts or benefits. It is important that they are careful about accepting gifts and benefits because this may place a public official in a position where they feel they can’t act with 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 this, only gifts or hospitality of symbolic or minimal value may be accepted in some situations. However, a board member must use their own judgement when accepting any gifts.
A register of gifts and benefits is in place so that the receipt and disposal of gifts can be done openly and clearly. 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 reveal interests to the board (which include positions and financial interests) in corporations, partnerships or other businesses that may be related 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.
For example, a conflict of interest may arise from:
- Other directorships or employment;
- Professional and business interests and associations
- Investment interests; and
- Family relationships.
Disclosure of Interests
Where a private interest might affect a board or committee decision, the director needs to reveal all details of the interest to the rest of the board or committee. This needs to be done as soon as possible.
The details of personal interests notified by the board member must be recorded.
In most situations, when a director has declared a material personal interest in a matter being considered by the board, they must not be present while the matter is being discussed and can’t vote on the matter. The director can be present as long as the other board members approve and if a resolution has been passed that explains the director’s interest and that the others directors are satisfied the director should be allowed to vote.
Conflicts Of Interest
A director must not use their position to gain a personal advantage or an advantage for any associated person which might damage TransGrid’s image. When there is a conflict, a director needs to decide:
- If they should debate or vote on the matter;
- If they should attend the discussion on the matter;
- Whether to arrange that the relevant board papers are not sent; and/or
- Whether to resign from the board.
When a director chooses to not attend a meeting, other board members must decide whether the knowledge and experience that would have been offered by the director is now unavailable. In cases where a conflict of interest continues, a director should carefully decide whether to resign from the board.
An executive director must always be alert for possible conflicts of interest between management interests and the director’s duties to TransGrid.
Reporting Suspected Corrupt Conduct
'Principal Officers' need to report corrupt behaviour or suspected corruption to the Independent Commission Against Corruption (ICAC). TransGrid’s Principal Officer is the chief executive. Corrupt conduct is the dishonest or partial exercise of public official duties. It may also involve the behaviour of non-public officials which negatively affects the honest and impartial exercise of a public official’s duties.
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 significant 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 revealing information. It is important that reports to the ICAC are made without advising the person(s) the report relates to and without publicity.
The Protected Disclosures Act 1994 protects 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 line with the agency’s internal reporting guidelines. Information concerning:
- Corrupt conduct should be made to the Independent Commission Against Corruption;
- Maladministration should be made to the NSW Ombudsman; and
- 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;
- Freedom of Information Act 1989;
- Independent Commission Against Corruption Act 1989;
- Occupational Health & Safety Act 1983;
- Ombudsman Act 1974;
- Protected Disclosures Act 1994;
- Public Finance & Audit Act 1983; and
- Public Sector Management Act 1988.
Policy and Guidelines
- Premier’s Department NSW Model Code of Conduct for NSW Public Agencies: Policy and Guidelines;
- Premier’s Department NSW Code of Conduct & Ethics for Public Sector Executives;
- Premier’s Memorandum 99-3 Government Boards & Committees;
- NSW Treasury Guidelines for Boards of Government Businesses; and
- 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; and
- 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 duties of office and carrying out 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 at the same time, 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 they acquire 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 a responsibility to be independent in judgement and actions and to take all reasonable steps to be satisfied with decisions taken by the Board of Directors.
- Confidential information received by a director in the course of their duties remains the property of TransGrid and it is inappropriate to reveal it, unless it has been authorised.
- A director should not act in a manner that may hurt TransGrid’s image.
- A director has a responsibility to comply with the spirit, the law and with the principles of this code.