Network Rail 2015 public member recruitment briefing

1. Network Rail 2015 public member recruitment briefing A warm welcome

2. Welcome Peter Reichwald, Director Harvey Nash 9 April 2013 2

3. Agenda Welcome About Network Rail Role of public members How to apply 9 April 2013 3

4. About Network RailRichard Parry-Jones, Chair

5. About Network Rail • We own and operate the GB rail infrastructure including: • 724 signal boxes • 2,500 stations • 7,400commercial properties • 6,100 level crossings • 20,000 miles of track • 40,000 bridges and tunnels • One of the country’s largest private landowners – we have 35,000 employees and 22 million neighbours (people who live or work within 500 metres of our infrastructure).

6. What we do • We operate, maintain and renew the infrastructure • We operate signals, set the timetable and measure how punctual trains are • We organise access to the track for train and freight operators • We are responsible for planning for the future of the railway in the short, medium and long-term • We manage the 22 largest stations (like Euston, Manchester Piccadilly and Glasgow Central) • We deliver projects to improve the railway for the people and companies that rely on it

7. To generate outstanding value for customers and taxpayers Our purpose(Why we exist) Our role(What we do) A better railway for a better Britain Our vision(What we want to be) To be a trusted leader in the railway industry Our strategy(How we’re going to do it) To work with our partners and use our full potential to improve safety, reliability, capacity and value for customers and taxpayers Our behaviours(How we need to work) Customer driven Collaborative Accountable Challenging Our purpose, role and vision

8. Twelve years of Network Rail • Safety - took over in a period of crisis. Now we have one of the safest railways in Europe as a result of taking maintenance in-house and projects to share best practice • Our People – our leadership and management development centres have improved staff training; we developed a nationally admired apprenticeship programme and increased graduate recruitment; and we have opened our National Centre at Milton Keynes. • Projects – we have become world class in the delivery of major infrastructure projects and are starting to use these skills abroad. • Performance – with a million more trains carrying a billion more passengers, we have taken train performance from c.75% to nearly 90%.

9. The Railway is a success….

10. The railway is a success… …but passenger demand is expected to continue to increase by 15% over Control Period 5 The challenge for the rail industry is how to deliver the network capacity and capability we need for the future: efficiently cost-effectively; and at a time when public finances are increasingly constrained The Government has shown it is committed to investment in rail if the industry can substantially reduce its costs – they know rail can help drive sustainable long-term economic growth.

11. Punctuality hit record levels in CP4… but has begun to decline

12. Safety is good… but there is room to improve

13. How are we funded? Network Rail was designed to be debt funded Until September 2014, debt was raised on the open market However, following reclassification in September 2014, going forward, new debt funding is wholly funded by Government Current Control Period (CP5) runs from 2014/15 – 2018/19 with total debt funding of £38bn Income covers day to day running of the infrastructure only: main sources of income Track access fees (c.1/3 /£2bn p.a.) Government grants (c. 2/3 /4bn p.a.) Property portfolio revenue (c.£233m p.a.) We are a Not for Dividend Company, therefore profits after servicing debt are typically re-invested in the network, but can also be used to repay debt or provide rebate to DFT & Transport Scotland

14. An overview of the rail industry Specify and fund rail services Work together Network Grant Funding Independent regulator of monopoly and health and safety Train and freight operators Access charges Passengers and freight users Revenue

15. Who else has economic oversight powers Apart from the ORR, a number of other bodies scrutinise Network Rail’s activities, including: Governments: Department for Transport (DfT) Transport Scotland Welsh Assembly Parliament: Parliamentary Select Committees – Transport Select Committee Public Accounts Committee National Audit Office

16. Control Period 5 (CP5) • Network Rail’s track access charges are subject to periodic reviews every 5 years. These periods are called control periods. • Network Rail has entered into CP5 which commenced on 1 April 2014 • CP5 will benefit the rail experiences for four million daily passengers, freight users and strengthen Britain’s economic growth. • Over the period £38 billion will be spent in maintaining, renewing and improving the network. More and new trains will be added to the network, new stations built, facilities improved, platforms lengthened and transformational projects, such as the Thameslink programme, Birmingham New Street, the Northern Hub and main line electrification, completed.

17. The role of a public memberJames Menzies, Interim Deputy Company Secretary

18. Our new governance structure – post reclassification SoS DfT MEMBERS Accountable Secondary Governance BOARD Oversee, advise NON-EXECUTIVE DIRECTORS EXECUTIVE DIRECTORS Accountable

19. Secondary Governance The role of a public member is one of secondary governance. The non-executive directors have a primary governance role over the Executive. What is secondary governance? Constructively probing and questioning the Board on matters of strategy and governance Holding the Board to account in an objective and informed manner if performance dips below target Entering into dialogue with the Board on matters that are subject to votes at general meetings Voting at general meetings With the aim of understanding how our Board is building a better railway for a better Britain and generating outstanding value for tax payers and customers

20. Secondary Governance How do public members hold our board to account? Twice yearly engagement groups to keep abreast of our performance in the key areas of: Safety People Future strategy Finance Performance Five Workshops a year where members get to challenge Board members on particular topics Ultimately by Attending and voting at our Annual General Meeting

21. Holding our board to account Attending and voting at our annual general meeting Members have the same voting rights as shareholders in a PLC and vote on: Our annual report and accounts Our remuneration report the appointment or re-appointment of our directors the terms of the remuneration policy for executive directors changes to our constitution However, the big difference is that it is One Member, One Vote – so your voice carries significant weight

22. Resources and opportunities for public members

23. Who are the public members? • We currently have 46 public members with experience in various industries and professions. • Public members have in common: 23 23

24. Public Member of Network Rail A role for you? Peter Reichwald Email: peter.reichwald@harveynash.com Tel 020 7333 1843

25. Is this the role for you? Do you have the skill set required? • A good knowledge of UK Corporate Governance Code • Be able to appreciate the specific issues for Network Rail • Do you have the ability to hold others to account • An appreciation of secondary governance Do you have the time? • An average of 8 - 10 meetings a year, but at least 2. • There is a fair amount of reading What is motivating you? Are you going to enjoy it? • If not, walk away now.

26. Your CV • Ideally no more than 3 pages for this one - no fancy fonts • Address, contact details – repeat name in footer with page number • ADDRESS THE CV TO THE ROLE • Key attributes – your brief profile • In detail for last 10 years, summary for prior years • About your employer (t/o; total staff and its prime activity) • Roles/Tasks of influence job titles mean different things in different organisations • Achievements • Outside work – charities, work in your community, school governorship etc.

27. Your supporting statement • I generally advise against bullet points • Do not leave out aspects that might be second nature to you • How much should you write? – you have been told 2 pages • Be succinct (in a meeting you need to express yourself clearly in a short time) • Be explicit – be clear so a third person reading it can identify your skills • Cross reference to the bullet points of the person spec and check that your examples cover them • Remember the panel is looking for ‘I’ NOT ‘we’

28. Why not bullet points Motivation, Leadership and Values ... • I am now looking to build on my experience as a Non-Executive to move completely into that area and create a portfolio of roles that match my values and passions. This role fits that perfectly. • I have extensive and current experience of working for mutual organisations, and my most recent role was at (organisation) is in the telecoms sector. • I would welcome the opportunity to talk through my CV, but I would like to highlight the following key strengths: • I am a highly motivated, strong and highly visible leader. I believe in leading by example and inspiring others through respect, clear communication and active and effective stakeholder management. • I am a fully qualified Chartered Director (Institute of Directors) and I have the confidence, experience and presence to manage a group of Board Directors. • I am decisive and have a strong track record of excellent stakeholder management within internal/external and regulatory stakeholders.

29. Tell a story, use examples • Motivation, Leadership and Values ... • This started with a strong motivational paragraph • Bringing about change in an academic institution is challenging. As the Independent Chair of (organisation) I undertook the task to redefine from within. It was essential my strong values of integrity, transparency and fairness shone through in order to win support of my Board and the executive. Leading an underperforming institution with a diverse board in the full glare of regulatory oversight to become one of the leading universities within the sector, took vision, flexibility and leadership. From the mentoring of the executive management and board committee chairs to liaising with government, the media and external funding agencies, all aspects of governance were tested. • This was followed by a paragraph giving a detailed example identifying awards won.

30. What are we looking for? (1) • Background – should be in your CV • Held or holds a senior managerial/or Board level position(s) of responsibility • Position(s) held in complex structured organisation • Role(s) likely to have involvement with corporate governance • Taken an active interest in something outside their regular work/activity as a Non-Executive Director/trustee • In addition, the MSP is seeking individuals who are able to demonstrate the following: • Motivation and ability to contribute • Understanding the role • Corporate governance experience (from either the public or private sectors)

31. What we are looking for? (2) • Motivation and ability to contribute • Genuine interest in, and acceptance of, the role of Network Rail as a major company providing a vital public service. • An understanding of the issues and dilemmas that face a large complex organisation such as Network Rail. • The ability to actively listen, constructively challenge the opinions of others and where possible, work to achieve a shared consensus. • Experience of working with senior colleagues from different backgrounds. • Excellent communication skills combined with the ability to express yourself clearly and succinctly. • The ability to make balanced analytical and independent judgements free from personal bias or interests.

32. What we are looking for? (3) • Motivation and ability to contribute Areas of expertise: We are looking for candidates with a broad range of expertise but would be particularly interested in candidates who bring one or more of the following: • Systems for performance management, which link to customer requirements. • Systems for monitoring large capital projects, project management (those with an engineering background would be particularly useful). • Safety management. • Audit and risk management. • Remuneration policy. • Understanding of regional and community priorities – regional economy. • Understanding of regulation and the requirements placed on regulated industries.

33. What we are looking for? (4) • Understanding the role An appreciation of the contribution of the role of a Public Member, in the context of Network Rail; Network Rail’s unique structure and its breadth of stakeholder interest. • Demonstrates an understanding of Network Rail’s unique structure and the importance of good corporate governance • The responsibilities of the role to Network Rail and/or other stakeholders / general public • The need to balance economic priorities with providing a public service including reliability and safety • The powers/limitations of the role • This is a secondary governance role • A shareholder without a financial interest • Unusual access to Board and other Public members • Appreciation of the impact of reclassification

34. What we are looking for? (5) • Corporate governance experience - A strong understanding of what corporate governance entails and its value to an organisation. • The value added to organisations of good corporate governance • Accountability or mention of appropriate process, policies and procedures • Demonstrate good knowledge of the UK Corporate Governance Code • Code Principle of “comply (to the code)or explain (why not)” • Corporate responsibility to external bodies / stakeholders • Ethical behaviour

35. This is an unusual role but an interesting one at the heart of UK plc I hope we have stimulated your interest Thank you for coming Peter Reichwald Principal Consultant, Harvey Nash E: peter.reichwald@harveynash.com T: +44 (0) 207 333 1843