Northern Ireland Energy Holdings | Role of the Board and our Members

Role of the Board

The board of directors of NIEH is ultimately responsible for the management and governance of the NIEH group of companies and takes strategic and operational decisions.

Directors have, inter alia, duties to exercise their functions:-

-	with reasonable care and skill;
-	to draw up accounts;
-	to act honestly and in good faith (fiduciary duties);
-	to act in the best interests of the company;
-	to not derive personal benefit or gain;
-	to disclose conflict of interest.

The directors are accountable to the members at, inter alia, the AGM of NIEH and at any EGMs that are called.

The company may by special resolution remove any director before the expiration of his period of office and may (subject to the company’s Articles of Association) by ordinary resolution appoint another person who is willing to act to be a director in his place.

The office of a director must be vacated if he:-

-	resigns his office by notice;
-	is or has been suffering from mental ill health;
-	is absent without the permission of the board from meetings of the board for twelve consecutive months;
-	becomes bankrupt;
-	is prohibited by law from being a Director; or
-	is removed from office pursuant to the company’s Articles of Association.

The Role of Members

As a company limited by guarantee, NIEH has no share capital and therefore no shareholders. Individuals appointed as members of NIEH ("Members") do not receive dividends nor do they have any other financial interest in NIEH. Accordingly, any financial surpluses generated will be retained by NIEH for the benefit of its operating companies and, ultimately, energy consumers.

The board is accountable to Members for its management of the business of NIEH. Members will therefore play a role in scrutinising the performance of NIEH as the holding company of the PTL and Moyle groups of companies. Performance will be scrutinised against commercial and other targets, as well as against energy industry benchmarks for quality of service and cost efficiency. Accordingly, the role of Members is similar to that of shareholders in a public limited company, save that Members have no financial interest in the Company. Members will perform this corporate governance role by receiving regular reports on the performance of NIEH and by participating in Members' conferences and in general meetings of NIEH.

The company will keep the Members informed of the company’s activities and progress:-

-	by issue of an annual report and financial statements;
-	at an Annual General Meeting which will include presentations on the group’s general and financial performance, including specifically the performance of PTL and MIL, their maintenance programmes, compliance with the terms of their licences and an analysis of expenditure as compared with budget;
-	at any other Member’s conferences which from time to time the board may consider necessary or desirable.

In addition, Members have a role in approving:

-	certain changes to NIEH's constitution;
-	the appointment, re-appointment and removal of directors;
-	the company's annual report and accounts;
-	the report of the remuneration committee of NIEH; and
-	the appointment, re-appointment and removal of the auditors of NIEH.

Members are selected on merit and against objective criteria, the intention being that NIEH has a membership which has the necessary skills, expertise, industry experience and capacity to contribute to these key governance roles and, in particular, to represent effectively energy consumer interests.

Number of Members

Unless otherwise agreed by the Northern Ireland Authority for Energy Regulation, NIEH will have not less than thirty Members. The membership should be large enough and sufficiently diverse as to ensure that all stakeholders are adequately represented and, in particular, that there is adequate representation of consumers. Members should be motivated to ensure that the board and management of NIEH and associated companies operate on a sound commercial footing in energy consumers' interests. Whilst the minimum number of Members should be thirty, the number of Members should be sufficiently restricted as to ensure that each Member takes sufficient interest in and responsibility for monitoring NIEH and ensuring that it and its board and management are accountable. The number of Members should not be so large as to impede the board from being able to manage effectively.

Liability of Members

In the event that NIEH were ever wound up, then every Member would be required to contribute £1 to the assets of NIEH. This is the maximum liability of any Member and this liability would only arise at all if NIEH were to be wound up in circumstances where NIEH was unable to meet all its debts in full.

Standard of Conduct of Members

Members must at all times observe the highest standards of propriety in relation to their membership. Members must:-

-	take decisions as Members in the interests of NIEH, having regard to the interests of the energy consumers of Northern Ireland, and not to gain any financial or other material benefits for themselves, their family, their friends or any particular organisation or other interest group;
-	exercise their rights and powers as Members to further the objects of NIEH as set out in the company’s Memorandum of Association;
-	not place themselves under any financial or other obligations to outside individuals or organisations that might influence them in the performance of their official duties;
-	make their choices on merit in carrying out NIEH business, including where making appointments to the board, recommending individuals for rewards and benefits and approving transactions to be entered into by the company;
-	be as open as possible about all the decisions and actions that they take, giving reasons for their decisions and restricting information only when the wider public interest clearly demands;
-	be accountable for their decisions and actions and submit themselves to a level of scrutiny which is appropriate to their membership of NIEH;
-	not use their position as a Member, or information received by virtue of their position as a Member, to further private interests or to frustrate or influence policy, decisions or actions of NIEH in an improper manner;
-	declare to the board any private interests relevant to their membership or the activities of NIEH; and
-	conduct themselves in a manner which will maintain and strengthen the public’s trust and confidence in NIEH and avoid any action which would, or could, bring NIEH’s name and reputation into disrepute.

Corporate Governance and Combined Code

Only those companies whose shares are listed on the London Stock Exchange are required to comply with the Combined Code on Corporate Governance (the "Combined Code") set out in the Listing Rules published by the UK Listing Authority. Notwithstanding this, and subject always to recognition being given to the differences between the structure of a conventional listed company and the structure and aims of NIEH, NIEH shall be seen to be adopting best practice, by endeavouring to adhere to the Combined Code where appropriate. In particular, the Combined Code's key principles of accountability, transparency and effectiveness should be key guiding principles for the corporate governance of NIEH. As a result, the board has appointed a committee relative to the appointment of members to the board (the "Nominations Committee"), an audit committee (the "Audit Committee") and a remuneration committee (the "Remuneration Committee") as required by the Combined Code to ensure a high level of corporate governance.

• Related Information

More Information

Last Updated: 23rd June 2006

Latest News