Open letter from the Board to BSC Parties
This open letter to BSC Parties and our stakeholders from the Board is now a firmly established communication that sets out the key activities ELEXON is working on this year. It includes updates on our strategy, on our Foundation Programme and on our governance.
The letter has been written by Michael Gibbons, ELEXON Board and BSC Panel Chairman.
I hope this letter has given you some insight into the work of the Board. If, however, you have any comments or questions then, as ever, please do let me know.
Michael Gibbons CBE FEI
This is a strategically important programme requiring a large investment from BSC Parties, the Programme has continued to be a key focus for the Board.
In fact, we have discussed the progress of the Programme at all recent Board meetings and meet regularly with CGI, the key service provider which is contracted to deliver the Programme.
The Board was pleased to welcome Angela Love to ELEXON’s Executive team as Director of Strategy and Communications. This appointment represented an important step in ensuring ELEXON is able to deliver our new strategy and vision.
Key points within our strategy and this letter include:
- Energy Codes Review
- Capacity Market
- EMR Settlement
There are three areas of Board governance on which I would like to update stakeholders: executive remuneration, board appointments and risk management.
ELEXON’s policy on executive remuneration includes, among other things, the requirement to offer remuneration that enables ELEXON to attract and retain individuals of a suitable calibre, and to ensure that total remuneration is set by reference to appropriate market comparator data.
Over the last six months, the Remuneration Committee has been reviewing the basis on which we assess Executive remuneration. We have made a great deal of progress and are expecting this to lead to a new, more robust, approach.
To this end, we have completed detailed assessments of our Executive roles which will enable us to use a much wider set of relevant market comparator data.
One of the outstanding challenges we are seeking to resolve is how we can align Executive remuneration to the long term performance of the company (which is a principle of good corporate governance but which is normally achieved through long term share ownership schemes which are not available to ELEXON).
In March 2019 we will be appointing two new industry directors to the ELEXON Board to replace Volker Beckers and Alison Chappell, who have both served on the ELEXON Board for six years; in line with best practice we felt it right to refresh board membership.
Both Volker and Alison have made major contributions in directing ELEXON’s efforts to serve the energy industry and consumers and we shall miss them both.
We were pleased to attract around 140 applicants for these roles. This was very good news as the last time we recruited an industry director we only had seven.
This remarkable change was clearly a direct result of the P324 governance changes which, among other things, were designed to ensure that we have a much wider and deeper pool of candidates to choose from.
Our Audit and Risk Committee has been working with consultants on developing ELEXON’s risk management framework, and especially on improving the organisation’s understanding of the overall risk framework to enable robust risk management in all we do.
Your view of ELEXON’s role
Finally, I would like to thank our stakeholders for taking part in Ofgem’s Code Administrators Survey.
We were delighted that this confirmed ELEXON as top Code Manager for the second year running and acknowledge that the survey provided feedback on how we can continue to enhance ELEXON’s services.