Network Rail 2014 public member
recruitment briefing
A warm welcome
9 April 2014 / 1
Welcome
Peter Reichwald, director
Harvey Nash
9 April 2013
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Agenda
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Welcome
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About Network Rail
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Role of public members
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How to apply
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About Network Rail
Richard Parry-Jones, chairman
9 April 2014 / 4
About Network Rail
We own and operate the GB rail
infrastructure including:
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830 signal boxes
2,500 stations
7,400 commercial properties
6,300 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).
9 April 2014 / 5
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 19 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
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Our purpose, role and vision
Our purpose
(Why we exist)
Our role
(What we do)
Our vision
(What we want to be)
Our strategy
(How we’re going to do it)
Our behaviours
(How we need to work)
To generate outstanding value for
customers and taxpayers
A better railway for a better Britain
To be a trusted leader in the railway industry
To work with our partners and use our full potential
to improve safety, reliability, capacity and value
for customers and taxpayers
Customer
driven
Accountable
Challenging
Collaborative
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Eleven 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
plan to use these skills abroad.
Performance – with a million more trains carrying a billion more passengers, we have taken
performance from c.75% to over 90%.
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The railway is a success…
Passenger Journeys
1600
1500
Journeys
1400
1300
1200
1100
1000
900
800
2012-13
2011-12
2010-11
2009-10
2008-09
2007-08
2006-07
2005-06
2004-05
2003-04
2002-03
Year
9 April 2014 / 9
9
The railway is a success…
…but passenger and freight demand is expected to continue to
increase (by 15% and 30% respectively over Control Period 5)
The challenge for the rail industry is how to deliver the network
capacity and capability we need for the future:
► efficiency
► cost-effectively; and
► at a time when public finances will be 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.
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Punctuality is at record levels… but has
reached a plateau
95.0%
CP2
CP3
CP4
90.0%
85.0%
80.0%
75.0%
2013/14
2012/13
2011/12
2010/11
2009/10
2008/09
2007/08
2006/07
2005/06
2004/05
2003/04
2002/03
2001/02
2000/01
1999/00
70.0%
9 April 2014 / 11 11
0.06
0.04
0.026
0.02
0.00
0.015
0.014
0.011
0.010
0.007
0.007
0.003
0.003
Ireland
Austria
Germany
Finland
Sweden
Denmark
Netherlands
United Kingdom
0.14
Luxembourg 0.000
0.016
France
0.027
0.037
Italy
Slovenia
0.038
0.049
Hungary
Slovakia
0.050
Poland
0.042
0.050
Spain
Czech Republic
0.051
0.079
0.068
0.061
Lithuania
Greece
Latvia
Portugal
0.093
0.08
Romania
0.10
0.096
0.12
Belgium
Estonia
0.144
0.151
0.16
Bulgaria
Fatalities per million train km
Safety is good… but there is room to
improve
0.18
Normalised workforce fatalities
Normalised passenger fatalities
EU average
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How are we funded?
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Network Rail was designed to be debt funded
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One of the largest borrowers in the UK
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Debt is raised to fund enhancement capital expenditure of the network
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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.)
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
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Debt Management
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NRIF has £33bn of debt outstanding (as at 21st March), primarily in the GBP
and USD bond markets
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51% of debt is currently index linked; policy target is 45-55%
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The average maturity of debt is c.15 years; nominal debt c.5 years
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In the current year to date, £5.0bn of debt has been issued (of which £3.1bn in
USD); this completes the funding requirement for 2013/14
Total funding requirement for CP5 is £28bn, comprised of £17bn of new debt
and £11bn of refinancing
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Network Rail debt is widely held
Diversified investor base: nearly 50% of bonds held outside the UK
SAFE (Central Bank of China)
Central Bank of Israel
Central Bank of Russia
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An overview of the rail industry
Specify and fund rail services
Work
together
Funding
Network
Grant
Independent regulator of
monopoly and health and
safety
Train and
freight
operators
Access charges
Revenue
Passengers
and freight
users
9 April 2014 / 16
16
Who else has economic oversight powers
Apart from the ORR, a number of other bodies scrutinise Network Rail’s
activities, including:
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Governments:
• Department for Transport (DfT)
• Transport Scotland
• Welsh Assembly
Parliament:
• Parliamentary Select Committees –
- Transport Select Committee
- Public Accounts Committee
• National Audit Office
9 April 2014 / 17 17
Control Period 5 (CP5)
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Network Rail’s track access charges are subject to periodic reviews every
5 years. These periods are called control periods.
Network Rail has just 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.
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Questions
9 April 2014 / 19 19
Role of public members
Win Chime, deputy company secretary
9 April 2014 / 20
Our governance structure
MEMBERS
Accountable
Holds to account
BOARD
Oversee, advise
NON-EXECUTIVE
DIRECTORS
EXECUTIVE
DIRECTORS
Accountable
9 April 2014 / 21 21
Holding our board to account
The primary role of a public member is to:
HOLD THE NETWORK RAIL BOARD TO ACCOUNT
This is achieved by members:
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Monitoring and engaging with our board on matters such as performance,
safety, corporate governance and remuneration
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Engaging with our board and other members in an objective and informed
manner where board performance falls below standards, outputs or targets,
while acknowledging progress and success where achieved
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Entering into dialogue on matters that are an immediate subject of votes at
general meetings
With the aim of understanding how our board is building a better
railway for a better for a Britain in furtherance of generating
outstanding value for tax payers and customers.
9 April 2014 / 22 22
Holding our board to account (2)
How do public members hold our board to account?
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keeping abreast of our performance
keeping abreast of developments that drive the delivery of our purpose and the
our risks
satisfying themselves that our leadership is effective
satisfying themselves that our board adheres to the spirit of the UK Corporate
Governance Code and governance best practice
considering the quality of Network Rail’s reporting
Ultimately by
Attending and voting at our annual general meeting and
other general meetings
9 April 2014 / 23 23
Holding our board to account (3)
Attending and voting at our annual general meeting and
other general meetings
Members have similar voting rights to that of shareholders in a PLC:
► Our annual report and financial statements
► Our remuneration report
► the appointment or re-appointment of our directors
► the appointment or re-appointment of our auditors
► the appointment or re-appointment of the members of the membership
selection panel
► the terms of the long-term element of the incentive scheme for our
executive directors
► changes to our constitution.
9 April 2014 / 24 24
Resources and opportunities for public members
MEETINGS
PUBLICATIONS
Our AGM and half-yearly meeting
Chairman’s quarterly governance letter
Meeting workshops
Press releases
Focussed engagement groups – safety, Network Rail and rail publications
people, finance and risk, performance and ORR publications
future
Site visits
ORR meeting
DIALOGUE
Non-executive director scrutiny sessions
Active / regular correspondence with
board, ORR and members
SUPPORT
Dedicated members’ support team service level agreement
Members’ website
Induction for new members
9 April 2014 / 25 25
Who are the public members?
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We currently have 41 public members with experience in various
industries and professions.
Public members have in common:
Hold / held
senior positions
Held large / complex
organisations
to account
Active role
in governance
arena
9 April 2014 / 26 26
Questions
9 April 2014 / 27
How to apply
Peter Reichwald, director
Harvey Nash
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What I will be covering
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Deciding if you should apply
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Your CV – what it should address?
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Your application form – what are we looking for?
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Preparing for the interview
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Helping you understand the process
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Is this the role for you?
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Do you have the skill set required?
• A good knowledge of UK Corporate Governance Code
• An appreciation of secondary governance – what it means
• Be able to appreciate the specific issues for Network Rail
• An ability to hold others to account
Do you have the time?
• 8 meetings a year but at least 2
• There is a fair amount of reading
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What is motivating you?
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Are you going to enjoy it? If not, walk away now.
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Where is the information you need?
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www.harveynash.com/nr - you have all visited the site but have you
• Listened to the video clips
• Look at what is said about the role and Network Rail
• Looked specifically at the person specification
• Down loaded the application form
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Your CV
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You have been told a maximum of 3 pages
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Address, contact details – repeat name in footer
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ADDRESS THE CV TO THE ROLE
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Key attributes
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In detail for last 10 years, summary for prior years
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About your employer(s) (t/o; total staff & its prime activity)
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Brief description of roles / tasks of influence
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Achievements
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Outside work – charities, school governorship etc.
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Your supporting statement
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Use the headings of the person specification as the points to address
• Motivation and ability to contribute
• Understanding the role
• Corporate governance experience
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Your supporting statement (2)
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Use examples to demonstrate your skill and ability to contribute to a
successful outcome
I am a member of a Police Authority
SAYS NOTHING
I am a member of the Police Authority – with my property
background I have been able to advise on improving the
reporting structures and accounting for the £1.7 billion real
estate and from my work in the community in respect of
dishonour violence and forced marriages I have helped the
police have a wider understanding of the issues.
GIVES REAL STRENGTH
The panel is looking for ‘I’ not ‘WE’
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Your supporting statement (3)
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Be explicit – be clear so a third person reading it can identify your
skills
Do not assume – job titles mean different things in different
organisations
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Do no leave out aspects that might be second nature to you
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How much should you write? – you have been told 2 pages
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Be succinct – but not over succinct
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FINALLY – with your responses drafted
• Cross reference to the bullet points of the person specification –
check that your examples cover them
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The practicalities - referee
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Think of people who can speak about you in the context of
the role you are applying for
A known name will not help if they do not know you in that
context
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The practicalities – the interview
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Research
• Understand why Network Rail needs public members
• What is the role?
Establish
• The challenges Network Rail is facing
• How your contribution will help
Plan the interview
• Consider the points you want to make
• Think of examples that bring these points out
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The process
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Submit your application by uploading through the website
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Closing date Tuesday 22 April (midnight)
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Applications are processed
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MSP reviews all applications
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You are advised by Friday 30 May if you are invited for interview
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Interview dates: 30 June, 1, 2, 3, 4, 8 July
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Appointees advised w/c 28 July
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What do we need from you?
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Documentation
• The application form – purely statistical information
• A supporting statement for your fit to the criteria sought (no
more than 2 pages)
• CV (no more than 3 pages)
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To submit your application
• Go back to the web site, www.harveynash.com/nr
• Click ‘APPLY’ on the top menu bar and follow the instructions
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Thank you
Peter Reichwald
Any questions
[email protected]
Network Rail’s Help line at Harvey Nash 020 7158 5614
www.harveynash.com/nr
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