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Flick a power switch and the lights turn on in an instant. It’s something we take for granted but if it wasn’t for a reliable and secure electricity transmission network, we’d all find ourselves in the dark. TransGrid Company Secretary Alan Shedden and Assistant Company Secretary Azita Taki have played a key role in building a first-rate governance process to help manage the company’s place in a complex and highly-regulated industry. That combination means board packs are often hundreds of pages long, putting pressure on the secretariat to give the board enough time to review their papers. Alan, who joined TransGrid in May 2017, had already experienced the challenges of working without an effective governance platform, and was keen not to repeat the experience.

“Coming from the school of late nights, printing and binding and trying to find a courier before 6 o'clock to get the papers out... it was really hard,” Alan said.

Background

TransGrid operates and manages the NSW and ACT high voltage transmission network, which connects generators, distributors and major end users. It ensures that about 3 million households and businesses are connected to electricity and employs over 1000 people. The TransGrid network includes more than 13,000 kilometres of high voltage overhead transmission line and 100 substations. It’s also the backbone of the National Electricity Market. In December 2015, the NSW State government sold the business under a long-term lease to a consortium of sophisticated investors. They include Australian companies Spark Infrastructure and the Utilities Trust of Australia, the Canadian pension fund Caisse de depot et placement du Quebec, as well as Middle Eastern sovereign wealth funds the Abu Dhabi Investment Authority and the Kuwait Investment Authority. The business incorporates three companies, managing assets, operations and services. That means three times the number of board meetings, as well as a further four committees overseeing health, safety and environment; regulation; audit and risk; and remuneration.

Business challenge

TransGrid operates in a highly-regulated and complex industry, which means its board packs are typically 200-300 pages long. Audit Committee packs can be even bigger - with five sets of financial statements to consider, they approach 500 pages for the meeting after financial year-end. "It's driven largely by a number of project approvals coming up which is the nature of the business, and we have a number of directors on the board who are quite technical, so they like to see that side of a construction job or a network connection asset," Alan said. For example, TransGrid recently proposed to construct a new 330 kV underground cable circuit between its substations at Potts Hill and Alexandria – a project that will provide a much-needed upgrade to Sydney’s ageing infrastructure. TransGrid had been using a mix of other governance software solutions and email but wasn’t entirely happy with the results.

“It became a governance issue that confidential company information was going out the door to multiple people through multiple channels. I didn’t feel comfortable with that. I wanted Diligent in place – I spoke to the Chair at the time and she supported making a change."

How Diligent helps

Alan, who had implemented Diligent in a previous role with an ASX-listed company, consulted with his peers about implementing a more streamlined solution. “We went with Diligent Boards mainly because of its usability, which is more intuitive. Another plus was that three of the directors already used it on their other boards and were comfortable with it. That made it a lot easier to implement – as soon as we told them about it, they also started to drive the process because it was what they wanted." Diligent Boards has freed up the secretariat’s time by making board paper preparation more streamlined and ensuring good governance is more effective and efficient. “The directors using the portal get notified so they know when to log on and read papers and can prepare for meetings earlier. It's a real benefit – they don't have to drag the papers around – and at TransGrid we have voluminous papers."

Results

It’s not just the length of reporting that poses a challenge, but the number of packs. In the past 12 months, more than 50 board and committee meetings have been held. The need to prepare and dispatch papers on a timely basis is heightened when meetings need to be convened at short notice. For example, last year TransGrid undertook a revenue determination process, led by the Australian Energy Regulator (AER), which sets its revenue out to 30 June 2023. The two-year process required extensive communication between the board and its committees. Cybersecurity is paramount for TransGrid, given its operations fall within the government’s new Security of Critical Infrastructure Act, which aims to protecting Australia’s electricity, gas, ports, and water from espionage, sabotage, and coercion. TransGrid works closely with government agencies such as the Australian Signals Directorate to manage cyber and other risks, with a particular focus on maintaining the security of its standalone transmission network’s operating systems.

“We have onerous license conditions around security and information flow in and out of the building," Alan says. “Our IT team was very comfortable with Diligent when we asked them to look at the protocols and security settings. It allows us to channel communications through a secure portal and that gives us great comfort."

Diligent has also launched an Australian data hosting facility with industry-leading Canberra Data Centres. This is significant for organisations who need to keep their data on local shores. TransGrid has incorporated a range of Diligent Boards functionality in their day-to-day processes. The resource centre in Diligent Boards is used as a reading room to provide briefing documents and information and support director induction.

“We need to make sure that what we communicate to one director is available to all our other directors. This allows us to do that and give the same source of truth and knowledge to everyone. It's also helpful when there are changes on the board," said Assistant Company Secretary, Azita Taki.

Another feature that comes in handy is electronic voting. With directors located in the UK, Canada and the United Arab Emirates as well as Australia, circular resolutions could be a logistical nightmare.

"It just saves so much hassle in pursuing directors to get a signature to scan back – now they can log on with their iPad, click ‘yes’ and it ticks their signature wherever they are in the world,” Alan said.

Pursuing greater efficiency is an increasing priority across the energy industry. TransGrid is exploring further ways to enhance and streamline its internal governance processes using Diligent Boards, potentially incorporating the secure messaging tool as well as expanding the platform across key internal committees. The Governance Cloud integrates with Diligent Boards, offering both convenience and security.

"There are opportunities to leverage Diligent to make us that bit more efficient internally."

To find out more about how Diligent Boards and the Governance Cloud can help your organisation, contact us at info@diligent.com or request a demonstration