Agenda Corporate Governance and Human Resources Committee February 11, :30 a.m. 8:30 a.m. Pacific

Transcription

1 Agenda Corporate Governance and Human Resources Committee February 11, :30 a.m. 8:30 a.m. Pacific The Westin San Diego 400 W Broadway San Diego, CA Call to Order Introductions and Chair s Remarks NERC Antitrust Compliance Guidelines Agenda Items 1. Minutes* - Approve a. November 5, 2014 Conference Call 2. Report on Matters Discussed in February 10, 2015 Closed Session - Discussion Board Committee and Board Committee Chair Assignments, and Vice Chair Recommendation - Review and Recommend Board Approval 4. Appointment of Officers - Review and Recommend Board Approval Year-End Performance Report* - Review 6. Board and Board Committees Self-Assessments and MRC Assessment of Board of Trustees Effectiveness Results* - Review 7. Staffing and Recruiting Update* - Review 8. Adjournment *Background materials included.

2 Antitrust Compliance Guidelines I. General It is NERC s policy and practice to obey the antitrust laws and to avoid all conduct that unreasonably restrains competition. This policy requires the avoidance of any conduct that violates, or that might appear to violate, the antitrust laws. Among other things, the antitrust laws forbid any agreement between or among competitors regarding prices, availability of service, product design, terms of sale, division of markets, allocation of customers or any other activity that unreasonably restrains competition. It is the responsibility of every NERC participant and employee who may in any way affect NERC s compliance with the antitrust laws to carry out this commitment. Antitrust laws are complex and subject to court interpretation that can vary over time and from one court to another. The purpose of these guidelines is to alert NERC participants and employees to potential antitrust problems and to set forth policies to be followed with respect to activities that may involve antitrust considerations. In some instances, the NERC policy contained in these guidelines is stricter than the applicable antitrust laws. Any NERC participant or employee who is uncertain about the legal ramifications of a particular course of conduct or who has doubts or concerns about whether NERC s antitrust compliance policy is implicated in any situation should consult NERC s General Counsel immediately. II. Prohibited Activities Participants in NERC activities (including those of its committees and subgroups) should refrain from the following when acting in their capacity as participants in NERC activities (e.g., at NERC meetings, conference calls and in informal discussions): Discussions involving pricing information, especially margin (profit) and internal cost information and participants expectations as to their future prices or internal costs. Discussions of a participant s marketing strategies. Discussions regarding how customers and geographical areas are to be divided among competitors. Discussions concerning the exclusion of competitors from markets. Discussions concerning boycotting or group refusals to deal with competitors, vendors or suppliers.

3 Any other matters that do not clearly fall within these guidelines should be reviewed with NERC s General Counsel before being discussed. III. Activities That Are Permitted From time to time decisions or actions of NERC (including those of its committees and subgroups) may have a negative impact on particular entities and thus in that sense adversely impact competition. Decisions and actions by NERC (including its committees and subgroups) should only be undertaken for the purpose of promoting and maintaining the reliability and adequacy of the bulk power system. If you do not have a legitimate purpose consistent with this objective for discussing a matter, please refrain from discussing the matter during NERC meetings and in other NERC-related communications. You should also ensure that NERC procedures, including those set forth in NERC s Certificate of Incorporation, Bylaws, and Rules of Procedure are followed in conducting NERC business. In addition, all discussions in NERC meetings and other NERC-related communications should be within the scope of the mandate for or assignment to the particular NERC committee or subgroup, as well as within the scope of the published agenda for the meeting. No decisions should be made nor any actions taken in NERC activities for the purpose of giving an industry participant or group of participants a competitive advantage over other participants. In particular, decisions with respect to setting, revising, or assessing compliance with NERC reliability standards should not be influenced by anti-competitive motivations. Subject to the foregoing restrictions, participants in NERC activities may discuss: Reliability matters relating to the bulk power system, including operation and planning matters such as establishing or revising reliability standards, special operating procedures, operating transfer capabilities, and plans for new facilities. Matters relating to the impact of reliability standards for the bulk power system on electricity markets, and the impact of electricity market operations on the reliability of the bulk power system. Proposed filings or other communications with state or federal regulatory authorities or other governmental entities. Matters relating to the internal governance, management and operation of NERC, such as nominations for vacant committee positions, budgeting and assessments, and employment matters; and procedural matters such as planning and scheduling meetings. NERC Antitrust Compliance Guidelines 2

4 DRAFT Minutes Corporate Governance and Human Resources Committee November 5, :00 p.m. - 2:00 p.m. Eastern Conference Call Introductions and Chair s Remarks Jan Schori, Chair, convened a duly noticed open meeting of the Corporate Governance and Human Resources Committee (the Committee ) of the North American Electric Reliability Corporation ( NERC ) on November 5, 2014 at 1:00 p.m. Eastern, and a quorum was declared present. The agenda is attached as Exhibit A. Present at the meeting were: Agenda Item 1.a Committee Members: Jan Schori, Chair Robert G. Clarke Frederick W. Gorbet Kenneth G. Peterson Bruce Scherr Board of Trustees members: Gerald W. Cauley, President and Chief Executive Officer David Goulding Roy Thilly NERC Staff: Charles A. Berardesco, Senior Vice President, General Counsel, and Corporate Secretary Damon Epperson, Director of Human Resources Mark Lauby, Senior Vice President and Chief Reliability Officer Janet Sena, Senior Vice President and Director of Policy and External Affairs Brady Walker, Associate Counsel Michael Walker, Senior Vice President, Chief Financial and Administrative Officer, and Corporate Treasurer NERC Antitrust Compliance Guidelines Ms. Schori directed the participants attention to the NERC Antitrust Compliance Guidelines included in the agenda, and advised that any questions regarding these guidelines should be directed to Mr. Berardesco. Minutes Upon motion duly made and seconded, the Committee approved the August 13, 2014 meeting minutes in the form as presented to the Committee at the meeting. Supplemental Retirement Plan

5 Ms. Schori provided an overview of the development of the 457(f) supplemental retirement plan. She stated that the Committee considered several options with NERC s consultant, Grant Thornton. Ms. Schori noted that the Committee s action at the meeting today would authorize the creation of a framework for the plan but would not authorize implementation, stating that plan participants, vesting criteria, and award amounts would be determined and approved by the Committee as part of NERC s annual performance review process. Ms. Schori indicated that the plan documents, once prepared, could be approved by the Board through electronic consent given the administrative nature of that action. Committee members engaged in a discussion of the plan and expressed support for the plan s proposed design and benefits. Upon motion duly made and seconded, the Committee authorized Management to develop plan documents related to the administration of the proposed 457(f) supplemental retirement plan and recommended approval by the Board. Board of Trustees and Board Committees Self-Assessment Surveys; MRC Annual Effectiveness Survey of the Board of Trustees Ms. Schori introduced the self-assessment surveys and stated that the Committee conducted an initial review during its August 2014 meeting. She noted the addition of a survey for the Enterprise-wide Risk Committee. Mr. Berardesco stated that the survey questions for 2014 are substantially similar to those contained in the 2013 survey, which will allow for more in-depth analysis of results. He outlined the schedule for distribution of the surveys and stated that results would be presented at the February 2015 meetings. Upon motion duly made and seconded, the Committee approved the Board of Trustees and Board Committees Self-Assessment Surveys, and the MRC Annual Effectiveness Survey of the Board of Trustees for distribution. ERO Enterprise and Corporate Metrics Q Report Mr. Lauby reviewed the ERO Enterprise and Corporate Metrics Third Quarter Summary Report which had been included with the advance meeting materials. He highlighted work on projects including the publication of the Polar Vortex Report, the filing of the Protection Systems Misoperations Relaibility Standard, the completion of the 345 kv breaker failure report, and ongoing work to ensure quality and up-to-date RSAWs. Mr. Lauby outlined efforts to continue to work to meet commitments to publish an Essential Reliability Services report regarding the changing resource mix and to meet several filing deadlines for Reliability Standards development projects. He also noted that the stakeholder perception survey, originally targeted for release by the end of 2014, would be released in January 2015 to avoid interference with other surveys. Staffing and Recruiting Update 2

6 Ms. Schori referenced a summary report containing an update on the staffing and recruiting, which had been included in the advance Committee materials. Committee members engaged in a discussion of the report. Adjournment There being no further business, and upon motion duly made and seconded, the meeting was adjourned at 1:30 p.m. Eastern. Submitted by, Charles A. Berardesco Corporate Secretary 3

7 Agenda Item NERC Performance Report Mark Lauby, Senior Vice President and Chief Reliability Officer Corporate Governance and Human Resources Committee Meeting February 11, 2015

8 2014 Metrics All Metrics Achieved Threshold or Higher In most cases, Target was achieved Metric 1: Reliability Results Achieved Target No Category 4 or 5 events Trend improved for composite of Category 1-3 events Metric 2: Assurance Effectiveness Achieved Target Only one Category 3 event in 2014 (May 25) No gaps found, Lessons Learned will be published in Q

9 2014 Metrics Metric 3: Risk Mitigation Effectiveness Achieved Target Protection System Misoperations: PRC adopted and filed with FERC; NERC staff created report with industry actions Cold Weather Preparedness: Polar Vortex Review report completed 345 kv Breaker Failures: NATF and NAGF joint report presented to the Board and no breaker failures identified in 2014 Achieved Threshold Changing Resource Mix: Completed Essential Reliability Services report Considerations Extreme Physical Events: Both GMD and Physical Security Standards adopted by NERC s Board, met regulatory deadlines Right-of-Way Clearances: Analysis of facility ratings completed and site visits. ROW report sent to NATF, but not finalized 3

10 2014 Metrics Metric 4: Program Execution Effectiveness Achieved Target Sub-metric A: GMD, COM-002, Stable Power Swings, PRC and CIP Standards passed final ballot; periodic review approach finalized, RSDP adopted by Board Sub-metric B: Quality, up-to-date RSAWs completed applicable standards Sub-metric C: RBR framework and Implementation Plan Board approved Sub-metric E: 76% of non-compliances self-identified Sub-metric G: RAI documents completed, FERC filing completed, training initiated Sub-metric I: Draft metric used on Western and Texas interconnections Sub-metric J: Whitepaper for Oversight Operating Model completed and the ERO-EMG developed the roadmap. ERO-EMG also developed, endorsed and implemented all applicable documents 4

11 2014 Metrics Metric 4: Program Execution Effectiveness Achieved Threshold Sub-metric D: Caseload index is below 7.2 months (Threshold < 8 months) Sub-metric F: Percentage of noncompliance items mitigated: 2013 = 82%, 2012 = 93%, 2011 = 96% and 2010 (and older) = 99% Sub-metric H: 88% participation reached for all RC/TO/TOPs, 83% increase in enrollment, 41% information increase in information sharing and KPI benchmarks developed for implementation in Q Considerations: Sub-metric K: Stakeholder survey created. Management decision to hold release of survey until Q

12 Agenda Item 6 Summary of 2014 Board and Board Committees Self-Assessments and MRC Assessment of Board of Trustees Effectiveness February 11, 2015

13 Surveys Overview NERC engaged TalentQuest to conduct the annual Board of Trustees (Board) and Member Representatives Committee (MRC) surveys through an online methodology The surveys were administered from November 12 to December 19, 2014, to a total of 46 Board and MRC members Across all surveys, response rates ranged from 86 to 100% Survey Respondents Response Rate Board of Trustees 10 of % Member Representatives Committee 24 of 27 89% Compliance Committee 6 of 6 100% Corporate Governance and Human Resources Committee 5 of 5 100% Finance and Audit Committee 6 of 6 100% Nominating Committee 12 of 14 86% Standards Oversight and Technology Committee 6 of 6 100% Enterprise-Wide Risk Committee 2 7 of 8 88%

14 Board Rating Scale Respondents were asked to rate items on a 1 to 3 point scale to indicate their evaluation for each rated item 1 = Below Expectations ( performance area with opportunity for improvement ) 2 = Meets Expectations ( meets required standard of performance ) 3 = Above Expectations ( exceeds the required standard of performance ) 2 items were evaluated by selection of Yes or No to indicate agreement or disagreement For any item rated 1 (Below Expectations) or No, mandatory comments were required to explain the rationale for the rating or selection 3

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16 Board Self-Assessment Summary Of 24 rated items, the Board overall item average rating was 2.62, with scores ranging from 2.20 to 3.00 Lowest Rated Item (2.20): The Board avoids excessive involvement in detail and day-to-day management. o This item was also rated the lowest in 2013 Highest Rated Items (3.0): The Board has knowledge of and familiarity with NERC s corporate values, mission, vision, strategic plan, and business plan and reflects this understanding in evaluating key issues. Board members stay abreast of issues and trends affecting NERC and the industry and use this information to assess and guide NERC performance. o Both items were also rated the highest in

17 Board Self-Assessment Summary Of the BOT s top 10 rated items: 5 are also in the MRC s top 10 rated items Of the BOT s lowest rated items: There is no overlap present with the MRC s lowest rated items 6

18 Board Lowest Rated Items The Board avoids excessive involvement in detail and day-to-day management The Board is sufficiently involved in ensuring competent and wellmotivated senior management and ensuring that proper development and succession plans are in place for CEO and other senior management The number of Committee meetings is appropriate The Board's Committees have suitable mandates and membership The Board's size is appropriate and effective

19 Board Lowest Rated Items, Cont. Board members reflect broad diversity of competency strengths and professional experience The Board has appropriate access to management The Board has established procedures that ensure Board members receive written meeting notices, agendas and appropriate background material in time to prepare in advance of meetings, are presented meaningful information during meetings, and receive timely 2.50 The Board establishes a positive and cooperative dialogue with Canadian federal and provincial regulators The Board is sufficiently involved in monitoring the corporation s compliance with regulatory requirements and directives

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21 MRC Assessment of Board of Trustees Effectiveness Summary Of 18 rated items, the MRC overall item average rating was 2.24, with scores ranging from 1.87 to 2.43 Lowest Rated Item (1.87): The Board functions and makes decision independently of management, as appropriate. Highest Rated Item (2.43): The Chair manages meetings efficiently to allow for sufficient discussion and constructive input on important issues and provides appropriate allocation of time to agenda items. 10

22 MRC Assessment of Board of Trustees Effectiveness Summary Of the MRC s top 10 rated items: 5 are also in the BOT s top 10 rated items Of the MRC s lowest rated items: There is no overlap present with the BOT s lowest rated items 11

23 MRC Highest Rated Items The Chair manages meetings efficiently to allow for sufficient discussion and constructive input on important issues and provides appropriate allocation of time to agenda items The Board has knowledge of and familiarity with NERC s corporate values, mission, vision, strategic plan, and business plan and reflects this understanding in evaluating key issues The Board takes appropriate account of the international charter of the North American bulk power system The Board is sufficiently involved in the ERO (NERC and the Regional Entities) annual business planning and budgeting process Board members reflect broad diversity of competency strengths and professional experience

24 MRC Lowest Rated Items The Board functions and makes decisions independently of management, as appropriate The Board sufficiently ensures that the ERO (NERC and the Regional Entities) business plan and budget appropriately balances the cost concerns of stakeholders with the need to meet the ERO s responsibilities The Board works and communicates effectively with stakeholders in the prioritization of NERC work efforts, striking an appropriate balance between the expectations of regulators and expectations and capabilities of stakeholders The Board effectively sets priorities through the strategic plan

25 MRC Lowest Rated Items The Board functions and makes decisions independently of management, as appropriate The Board sufficiently ensures that the ERO (NERC and the Regional Entities) business plan and budget appropriately balances the cost concerns of stakeholders with the need to meet the ERO s responsibilities The Board works and communicates effectively with stakeholders in the prioritization of NERC work efforts, striking an appropriate balance between the expectations of regulators and expectations and capabilities of stakeholders The Board effectively sets priorities through the strategic plan % 10% 20% 30% 40% 50% 60% 70% 80% 90% 100% Above Expectations ("exceeds the required standard of performance") Meets Expectations ("meets the required standard of performance") Below Expectations ("performance area with opportunity for improvement") 14

26 Board/MRC Comparison- Lowest Rated Items *Statistically significant difference (p<.05) *The Board effectively sets priorities through the strategic plan *The Board works and communicates effectively with stakeholders in the prioritization of NERC work efforts, striking an appropriate balance between the expectations of regulators and expectations and capabilities of stakeholders BOT MRC *The Board sufficiently ensures that the ERO (NERC and the Regional Entities) business plan and budget appropriately balances the cost concerns of stakeholders with the need to meet the ERO s responsibilities *The Board functions and makes decisions independently of management, as appropriate

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28 BOT-MRC Comparison Summary For those items that were rated by both the Board of Trustees and the Membership Representatives Committee, the average difference in scores was.45 with the BOT average of 2.62 and the MRC average of 2.24 For all items, the BOT rated more favorably than the MRC with item differences ranging from.11 to.86 17

29 Year-Over-Year Positive Shifts BOT items resulting in a positive shift of.30 or higher between 2013 and 2014 The Board works and communicates effectively with stakeholders in the prioritization of NERC work efforts, striking an appropriate balance between the expectations of regulators and expectations and capabilities of stakeholders. (Net Change.34) The Board functions and makes decisions independently of management, as appropriate. (Net Change.30) Board members participate as equals and communicate openly. (Net Change.30) MRC items resulting in a positive shift of.30 or higher between 2013 and 2014 The Board takes appropriate account of the international charter of the North American bulk power system. (Net Change.39) The Board sufficiently ensures that the ERO (NERC and the Regional Entities) business plan and budget appropriately balances the cost concerns of stakeholders with the need to meet the ERO s responsibilities. (Net Change.39) The Board is sufficiently involved in the ERO (NERC and the Regional Entities) annual business planning and budgeting process. (Net Change.33) 18

30 Year-Over-Year Negative Shifts BOT items resulting in a negative shift of -.10 or higher between 2013 and 2014* The Board is sufficiently involved in ensuring competent and wellmotivated senior management and ensuring that proper development and succession plans are in place for CEO and other senior management. (Net Change -.16) The Board takes appropriate account of the international charter of the North American bulk power system. (Net Change -.14) MRC items did not reflect any significant negative shifts between 2013 and 2014* Board members participate as equals and communicate openly. (Net Change -.01) *Items noted met or exceeded the meets expectations rating. 19

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32 Potential Areas for Discussion Based on the Board self-assessments and MRC assessments, the following areas should be considered for further discussion: Is the Board appropriately exercising its role as an independent Board, particularly with respect to its oversight of Management and in making decisions? Is the Board striking an appropriate balance between the cost and other concerns of stakeholders with the expectations of regulators and the need to meet the ERO s responsibilities? Is the Board effectively setting ERO Enterprise priorities through the strategic plan? 21

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34 Other Factors For Board self-assessment, both Yes/No items received a 100% response of Yes : I feel I am personally making a meaningful contribution to the corporation by my attendance and participation at the Board, committee meetings, and other activities. I feel my peers are personally making a meaningful contribution to the corporation by their attendance and participation at the Board, committee meetings, and other activities. 23

35 Summary of 2014 Board of Trustees Corporate Governance and Human Resources Committee Survey

36 Overview NERC engaged TalentQuest to conduct its annual Board of Trustees Corporate Governance and Human Resources Committee (CGHRC) Survey through an online methodology The CGHRC survey was administered from November 12 to December 19, 2014, to a total of 5 Committee members 5 Committee members responded to the survey 100% response rate 25

37 Rating Scale Respondents were asked to rate items on a 1 to 3 point scale to indicate their evaluation for each rated item 1 = Below Expectations ( performance area with opportunity for improvement ) 2 = Meets Expectations ( meets required standard of performance ) 3 = Above Expectations ( exceeds the required standard of performance ) For any item rated 1 (Below Expectations) or No, mandatory comments were required to explain the rationale for the rating or selection 26

38 Results Summary The overall CGHR survey average was 2.30, with item averages ranging from 2.00 to 2.80 Given the lowest item averages are 2.00, the CGHR is seen to be operating at expectations or higher Lowest Rated Items (2.00): The Committee effectively reviews the structure and mandates of the Committees, recommending changes to the Board as appropriate. The Committee effectively reviews overall staffing levels and management s plans and activities for the development and improvement of key personnel. The Committee effectively reviews and approves, as appropriate, an employee manual. 27

39 Results Summary Highest Rated Items: The Committee effectively reviews significant benefit plans (including the corporation s retirement plans) and make recommendations and provide feedback to the Board. (2.80) The Committee Chair manages meetings efficiently to allow for open, equal, and sufficient discussion and constructive input on important issues. (2.80) Review of cross-committee survey items finds the CGHR rated a 2.20 on all items except: The Committee Chair manages meetings efficiently to allow for open, equal, and sufficient discussion and constructive input on important issues. (2.80) 28

40 Committee Comparison The number of Committee meetings is appropriate. The size of the Committee is appropriate. The information provided in support of the agenda is appropriate and available in a timely manner in advance of Committee meetings. The Committee Chair manages meetings efficiently to allow for open, equal, and sufficient discussion and constructive input on important issues. Finance and Audit Committee Standards Oversight and Technology Committee Compliance Committee Corporate Governance and Human Resources Committee Nominating Committee Enterprise-Wide Risk Committee 29

41 Summary of 2014 Board of Trustees Compliance Committee Survey

42 Overview NERC engaged TalentQuest to conduct its annual Board of Trustees Compliance Committee survey through an online methodology The Compliance Committee survey was administered from November 12 to December 19, 2014, to a total of 6 Committee members 6 Committee members responded to the survey 100% response rate 31

43 Rating Scale Respondents were asked to rate items on a 1 to 3 point scale to indicate their evaluation for each rated item 1 = Below Expectations ( performance area with opportunity for improvement ) 2 = Meets Expectations ( meets required standard of performance ) 3 = Above Expectations ( exceeds the required standard of performance ) For any item rated 1 (Below Expectations) or No, mandatory comments were required to explain the rationale for the rating or selection 32

44 Results Summary The overall Compliance Committee survey average was 2.22, with item averages ranging from 2.00 to 2.83 Given the lowest item averages are 2.00, the Compliance Committee is seen to be operating at expectations or higher Highest Rated Item (2.83): The Committee Chair manages meetings efficiently to allow for open, equal, and sufficient discussion and constructive input on important issues. 33

45 Results Summary Review of cross-committee survey items finds the Compliance Committee rated the lowest on the following item: The size of the Committee is appropriate. (2.17) Of the cross-committee survey items, the Compliance Committee rated the highest on the following items: The Committee Chair manages meetings efficiently to allow for open, equal, and sufficient discussion and constructive input on important issues. (2.83) The number of Committee meetings is appropriate. (2.33) 34

46 Committee Comparison The number of Committee meetings is appropriate. The size of the Committee is appropriate. The information provided in support of the agenda is appropriate and available in a timely manner in advance of Committee meetings. The Committee Chair manages meetings efficiently to allow for open, equal, and sufficient discussion and constructive input on important issues. Finance and Audit Committee Standards Oversight and Technology Committee Compliance Committee Corporate Governance and Human Resources Committee Nominating Committee Enterprise-Wide Risk Committee 35

47 Summary of 2014 Board of Trustees Finance and Audit Committee Survey

48 Overview NERC engaged TalentQuest to conduct its annual Board of Trustees Finance and Audit Committee survey through an online methodology The Finance and Audit Committee survey was administered from November 12 to December 19, 2014, to a total of 6 Committee members 6 Committee members responded to the survey 100% response rate 37

49 Rating Scale Respondents were asked to rate items on a 1 to 3 point scale to indicate their evaluation for each rated item 1 = Below Expectations ( performance area with opportunity for improvement ) 2 = Meets Expectations ( meets required standard of performance ) 3 = Above Expectations ( exceeds the required standard of performance ) For any item rated 1 (Below Expectations) or No, mandatory comments were required to explain the rationale for the rating or selection 38

50 Results Summary The overall Finance and Audit Committee survey average was 2.31, with item averages ranging from 2.00 to 3.00 Given the lowest item average is 2.0, the Finance and Audit Committee is seen to be operating at expectations or higher Lowest Rated Items (2.0): The Committee effectively evaluates the performance of the external auditor and the auditor s estimated annual audit fees and reappoints, or, if necessary, takes steps to replace the external auditor. The Committee effectively meets privately with the external auditor to ascertain the level of access and cooperation received from management during the course of the audit. 39

51 Results Summary Review of cross-committee survey items finds the Finance and Audit Committee rated the following items the lowest of all committees: The number of Committee meetings is appropriate. (2.17) The size of the Committee is appropriate. (2.17) Of the cross-committee survey items, the Finance and Audit Committee rated the following item the highest, along with both the Nominating and Compliance Committees The Committee Chair manages meetings efficiently to allow for open, equal, and sufficient discussion and constructive input on important issues. (2.83) 40

52 Committee Comparison The number of Committee meetings is appropriate. The size of the Committee is appropriate. The information provided in support of the agenda is appropriate and available in a timely manner in advance of Committee meetings. The Committee Chair manages meetings efficiently to allow for open, equal, and sufficient discussion and constructive input on important issues. Finance and Audit Committee Standards Oversight and Technology Committee Compliance Committee Corporate Governance and Human Resources Committee Nominating Committee Enterprise-Wide Risk Committee 41

53 Summary of 2014 Board of Trustees Standards Oversight and Technology Committee Survey

54 Overview NERC engaged TalentQuest to conduct its annual Board of Trustees Standards Oversight and Technology Committee survey through an online methodology The Standards Oversight and Technology (SOTC) Committee survey was administered from November 12 to December 19, 2014, to a total of 6 Committee members 6 Committee members responded to the survey 100% response rate 43

55 Rating Scale Respondents were asked to rate items on a 1 to 3 point scale to indicate their evaluation for each rated item 1 = Below Expectations ( performance area with opportunity for improvement ) 2 = Meets Expectations ( meets required standard of performance ) 3 = Above Expectations ( exceeds the required standard of performance ) For any item rated 1 (Below Expectations) or No, mandatory comments were required to explain the rationale for the rating or selection 44

56 Results Summary The overall Standards Oversight and Technology Committee survey average was 2.32, with item averages ranging from 2.00 to 2.67 Given the lowest item averages are 2.0, the Standards Oversight and Technology Committee is seen to be operating at expectations or higher Lowest Rated Item (2.0): The Committee effectively reviews periodically NERC s status with the American National Standards Institute. 45

57 Results Summary Review of cross-committee survey items finds the Standards Oversight and Technology Committee rated all items at a 2.33, except the following: The Committee Chair manages meetings efficiently to allow for open, equal, and sufficient discussion and constructive input on important issues. (2.67) 46

58 Committee Comparison The number of Committee meetings is appropriate. The size of the Committee is appropriate. The information provided in support of the agenda is appropriate and available in a timely manner in advance of Committee meetings. The Committee Chair manages meetings efficiently to allow for open, equal, and sufficient discussion and constructive input on important issues. Finance and Audit Committee Standards Oversight and Technology Committee Compliance Committee Corporate Governance and Human Resources Committee Nominating Committee Enterprise-Wide Risk Committee 47

59 Summary of 2014 Board of Trustees Nominating Committee Survey

60 Overview NERC engaged TalentQuest to conduct its annual Board of Trustees Nominating Committee survey through an online methodology The Nominating Committee survey was administered from November 12 to December 19, 2014, to a total of 14 Committee members 12 Committee members responded to the survey Response rate of 86% 49

61 Rating Scale Respondents were asked to rate items on a 1 to 3 point scale to indicate their evaluation for each rated item 1 = Below Expectations ( performance area with opportunity for improvement ) 2 = Meets Expectations ( meets required standard of performance ) 3 = Above Expectations ( exceeds the required standard of performance ) For any item rated 1 (Below Expectations) or No, mandatory comments were required to explain the rationale for the rating or selection 50

62 Results Summary The overall Nominating Committee survey average was 2.63, with item averages ranging from 2.33 to 2.83 Given the lowest item averages are 2.0, the Nominating Committee is seen to be operating at expectations Highest Rated Items (2.83): The Committee effectively communicates NERC s and the MRC s expectations of service on the Board to candidates. The Committee Chair manages meetings efficiently to allow for open, equal, and sufficient discussion and constructive input on important issues. The director/trustee nomination process is effective. Review of cross-committee survey items finds the Nominating Committee with the highest ratings of all committees (ranging from 2.33 to 2.83) 51

63 Committee Comparison The number of Committee meetings is appropriate. The size of the Committee is appropriate. The information provided in support of the agenda is appropriate and available in a timely manner in advance of Committee meetings. The Committee Chair manages meetings efficiently to allow for open, equal, and sufficient discussion and constructive input on important issues. Finance and Audit Committee Standards Oversight and Technology Committee Compliance Committee Corporate Governance and Human Resources Committee Nominating Committee Enterprise-Wide Risk Committee 52

64 Summary of 2014 Board of Trustees Enterprise-wide Risk Committee

65 Overview NERC engaged TalentQuest to conduct its annual Board of Trustees Nominating Committee survey through an online methodology The Enterprise-Wide Risk Committee survey was administered from November 12 to December 19, 2014, to a total of 8 Committee members 7 Committee members responded to the survey Response rate of 88% 54

66 Rating Scale Respondents were asked to rate items on a 1 to 3 point scale to indicate their evaluation for each rated item 1 = Below Expectations ( performance area with opportunity for improvement ) 2 = Meets Expectations ( meets required standard of performance ) 3 = Above Expectations ( exceeds the required standard of performance ) For any item rated 1 (Below Expectations) or No, mandatory comments were required to explain the rationale for the rating or selection 55

67 Results Summary The overall Enterprise-Wide Risk Committee survey average was 2.24, with item averages ranging from 1.86 to 2.71 Highest Rated Item (2.71): The Committee Chair manages meetings efficiently to allow for open, equal, and sufficient discussion and constructive input on important issues. Lowest Rated Item (1.86): The Committee effectively monitors and assesses the adequacy of the Regional Entities compliance with obligations under the delegation agreements between NERC and the Regional Entities, the Rules of Procedure, and with applicable FERC and other governmental authorizations, regulations, and orders. 56

68 Results Summary Review of cross-committee survey items finds the Enterprise- Wide Risk Committee ratings ranging from 2.29 to 2.33, neither the highest or lowest ratings across shared committee survey items. 57

69 Committee Comparison The number of Committee meetings is appropriate. The size of the Committee is appropriate. The information provided in support of the agenda is appropriate and available in a timely manner in advance of Committee meetings. The Committee Chair manages meetings efficiently to allow for open, equal, and sufficient discussion and constructive input on important issues. Finance and Audit Committee Standards Oversight and Technology Committee Compliance Committee Corporate Governance and Human Resources Committee Nominating Committee Enterprise-Wide Risk Committee 58

70 Year-Over-Year Analysis

71 Response Rates Survey 2013 Response Rate 2014 Response Rate Board of Trustees 10 of 10 (100%) 10 of 10 (100%) Member Representatives Committee 22 of 38 (58%) 24 of 27 (89%) Compliance Committee 6 of 6 (100%) 6 of 6 (100%) Corporate Governance and Human Resources Committee 4 of 4 (100%) 5 of 5 (100%) Finance and Audit Committee 5 of 5 (100%) 6 of 6 (100%) Nominating Committee 11 of 12 (92%) 12 of 14 (86%) Standards Oversight and technology Committee 6 of 6 (100%) 6 of 6 (100%) Enterprise-Wide Risk Committee N/A 7 of 8 (88%) 60

72 Overview Overall Averages by Committee Surveys Board of Trustees *Member Representatives Committee Corporate Governance and Human Resources Committee Compliance Committee Finance and Audit Committee Standards Oversight and Technology Committee *Nominating Committee Enterprise-Wide Risk Committee *Statistically significant difference (p<.05)

73 Summary The Nominating Committee received the highest overall survey average (2.63), reflecting an increase of.53 from 2013 The Board of Trustees received the second highest overall survey average (2.62), reflecting an increase of.12 from 2013 Notable Improvements Nominating Committee (Net change.53) Member Representatives Committee (Net change.24) 62

74 Agenda Item 7 Corporate Governance and Human Resources Committee February 11, 2015 Staffing and Recruiting Update Action Information Background Talent acquisition remains a core priority for the Human Resources (HR) department and a significant opportunity to augment the enterprise with hires with industry-leading technical competency and close alignment to NERC s mission, core values, and consequent ability to make sustained contributions towards long-term objectives. Through use of best practices, HR continues to significantly enhance the quality and fit of talent while not exceeding approved budget for headcount. The period of October through December 2014 saw the hiring of nine (9) employees. Open, approved headcount in the 2015 budget remains a priority, and HR anticipates filling these roles with top talent in 2015 at or under budget. Below are descriptions of the nine (9) hires that have been completed from October 1 through December 31, Administrative Associate Director to the Office of the CEO Tina Buzzard rejoined NERC in October as the Administrative Associate Director to the Office of the CEO reporting to Gerry Cauley, President and CEO. In this role, Tina will lead administrative duties for the President and CEO, including the planning, coordination, and direction of activities associated with the overall operation of the Office of President/CEO and Executive Office. Technical Training Specialist Jeffrey Shade joined NERC in November as a Technical Training Specialist reporting to Matthew Lewis, Manager of Training and Education. Prior, Jeff worked for BeavEx Incorporated in Atlanta, Georgia for seven years in different training roles and taught two years for Kaplan Inc. His most recent title at BeavEx was Learning & Development Specialist. In this role he focused on the design and development of all online training material for the organization. Jeff received his Bachelor s degree from Wingate University and holds his MTS from Emory University. He is currently pursuing his Certified Professional in Learning and Performance

75 (CPLP) certification from the Association of Talent Development (ATD) of which he is an active member. Quality Assurance Analyst Aviance Freeman joined NERC in November as a Quality Assurance Analyst reporting to Andy Rodriquez, NERC IT Director, Business Process Improvements. Aviance has been contracting with NERC since September 2012 assisting the IT department with SharePoint initiatives, performing Quality Assurance on key ERO projects, and a key resource managing ERO helpdesk issues. Prior to NERC, Aviance worked as a Regional Coordinator at Veolia Transportation. Aviance graduated from Bryman College in Hayward, CA as a Medical Assistant. IT Director-Cyber Infrastructure Don Prince joined NERC in November as IT Director-Cyber Infrastructure reporting to Stan Hoptroff, Vice President and Chief Technology Officer. Don comes to NERC from Cisco Systems where he was a Consulting Security Engineer and also served as Senior Information Security Architect. Prior, he was with Southern Company as the Senior Information Security Architect. He also served with Carolinas HealthCare System in Charlotte, NC as a Senior Information Security Engineer. Don graduated from the University of Mississippi with a Bachelor s degree in Computer Science Engineering. Senior Director of Finance Scott Jones joined NERC in December as Senior Director of Finance reporting Mike Walker, Senior Vice President and Chief Financial and Administrative Officer. Prior, Scott was with Municipal Electric Authority of Georgia (MEAG Power) where he served as Senior Vice President-Chief Administrative Officer. During his time with MEAG Power he worked as Vice President-Corporate Affairs, Vice President/Director-Audit and Risk Management, and Controller. Scott has also worked for Coopers & Lybrand/PricewaterhouseCoopers (PwC) in Atlanta, GA and Virginia Gas Company in Abingdon, VA. Scott is a CPA and holds a Master s of Accountancy degree from the University of Tennessee. Director, Reliability Assessments Thomas Coleman joined NERC in December as Director, Reliability Assessments reporting to John Moura, Director, Reliability Assessments. Most recently Tom was with Comverge where he was Director of Sales, developing markets in North America for demand response. Prior, Tom worked as an energy industry consultant as well as for JP Morgan and Fortis Banks on their energy desks where he placed structured, originated transactions in both power and gas. Tom holds a Bachelor s of Science from the University of Florida and an MBA from Vanderbilt University.

76 Event Investigator Alison Oswald jointed NERC in December as an Event Investigator reporting to Jim Stuart, Manager of Investigations. Alison previously worked for NRG Energy in Houston, TX as a Generation and Load Controller. She has experience in dispatching coal, gas, wind, solar, and nuclear energy. Prior to this Alison worked for Fulcrum Power Services in the ERCOT and CAISO regions. Alison has a Bachelor s degree from the University of Houston in Finance and has been NERC Reliability Coordinator Certified since Administrative Assistant Todd Gonsalves joined NERC in December as Administrative Assistant reporting to Tim Roxey, Senior Director ES-ISAC and Chief Security Officer. Prior, Todd was with The John Hopkins University, Partnership for Educational Transformation in Baltimore, MD as an Administrative Coordinator/Project Manager to the Executive Director. He has worked most of his career as an administrative support specialist in various capacities including emergency medical management services, higher education administration, and reform. Todd holds a Bachelor s of Arts degree from Westfield State College and a Master s of Arts degree from Arizona State University, specializing in policy analysis. Senior Compliance Auditor Chris Witherspoon joined NERC in December as Senior Compliance Auditor reporting to Jim Armstrong, Audit Manager. Most recently Chris was with Georgia Transmission Corporation where she served as the NERC Compliance Coordinator. Prior, she was with Delta Airlines as Internal Controls and Compliance. Chris graduated from the University of Georgia with a Bachelor s degree in English and holds an MBA degree in Finance from Kennesaw State University.