Lorraine Wrafter is a Supervisory Board Member and Chair of the Nomination & Remuneration Committee with Ignitis Group.
It is already more than a year since the new Supervisory Board of Ignitis Group, one of the largest energy companies in the Baltic states, was elected. The collegial body of the Group comprises five independent members with international experience and two representatives of the Ministry of Finance, the Group‘s majority shareholder.
Our colleagues in Vilnius talked to Lorraine Wrafter, the independent member of the newly elected Supervisory Board, about the role and value of a collegial body in a listed company with the state as a majority shareholder and what it takes to be successful as a member of such a body.
In the Supervisory Board our role is to look after the strategy, key risks (managed risks), ensure business compliance and performance.
My role as the Chair of NRC is to lead the committee and ensure the company is using the right tools and processes to develop the capabilities through succession planning and building the talent pipeline and to engage and reward people. Our role is also to propose an effective organisation structure for decision making and offer assistance in the hiring for Board positions within the Group companies.
The Supervisory Board's first meeting was online and we continued to work online for six months due to Covid and then start of the war in Ukraine. One of our first meetings was to get to know each other, who we are outside of the board room. We had weekly/ fortnightly meetings for the first few months to get us all up to speed on the business. The Supervisory Board and NCR meet monthly.
I was new to the Energy sector and my colleagues were a great help to get me up to speed quickly. I had one to one online meetings with all the Supervisory members to learn about the industry, state and a publicly listed company. We can also call each other whenever we have questions.
What helped me to prepare for the role was the education I received from the Institute of Directors and two advisory Board positions. In addition, Ignitis Group invited me to attend, on behalf of the Supervisory Board, a programme run by an external company to understand corporate culture and governance in the Baltics. They also invested in Sustainability and the Board‘s role.
It is a Energy business, with a fast growing Renewables business that is competing in global markets. We acknowledge the tensions between being both a local Lithuanian company and growing internationally (in Europe) within a highly competitive market. Ignitis Group is a strictly regulated and listed company that has to manage the demands of the state and private investors. All these factors add to the challenges for the business particularly in finding the right talent to run the business and to reward people.
The complexity of the Group structure and decision making processes was one of the first areas the Supervisory Board identified that needed to change. Ignitis Group is now introducing a new structure to help them make faster decisions across the group while ensuring accountability and controls are in place.
We, in the Supervisory Board, were happy to see the resilience and proactiveness of the Group Management team / Executive Board when facing the challenges related to the war in Ukraine – ensuring the energy supply to customers and at the same time moving forward with the agreed strategy, not stopping with growth, especially in renewables (the company "Ignitis Renewables" which expanded quickly in terms of people during the last year).
Challenges were more for the Management Board – our concern was for the Management Board and employees' well being. It has been a very tense year for the business with the war, energy challenges, growing the business and meeting their financial commitments to the state and private investors. During this period employee engagement remained high confirmed by the recent eNPS results.
The role of the Supervisory Board is evolving and the area of focus is the growth of Renewables from reviewing Renewable Projects, preparation for bids, sourcing talent around the world and paying competitive market rates.
Firstly we are a diverse team. There are seven members with seven different skills sets and six nationalities. This gives a great balance of perspectives. We all have an expertise and at the same time we can contribute and challenge each other in their area of expertise.
We are functioning very well as a team.
Being new in the Supervisory Board and also in the Energy market I think it is very useful to get an overview/ knowledge both about the specifics of business, corporate governance and culture at the early stage.
We talk, ask questions, and are open to being challenged and are of course supportive of each other.
Another important area is setting clear accountabilities and boundaries with the Boards of the Group companies so that each collegial body feels accountable, acts within the boundaries and decisions are made on time.
At the end of our meetings we have roundtable time just with the Supervisory Board or Committee members. At these sessions we reviewed what went well and what could be improved and share this feedback with the Management Board. There is no defensiveness.
We have an annual self-assessment of the Board and committees done by external company – another opportunity to reflect and improve the effectiveness of the Board.
Our interactions with the Boards of the Group companies are limited – mainly strategy meetings and business updates. Each of the Group companies has its own board to manage the business and controls. The Group Supervisory Board does not need to get involved with them. They have the controls in place. Our goal is to ensure the Group organisation structure and decision making processes are in place for transparency and in line with anticorruption policies while supporting a fast changing and growing business.
Another important thing in ensuring effective governance is implementation of the principle "Nose in, Fingers out". We, as the Supervisory Board, are responsible for hiring the right people for the Boards and making them accountable, for guiding them based on overall business perspective ("business lenses") and support in decision making – but not making decisions for them. It is a challenge for all of us – especially in a fast growing business, i.e. Renewables, where we say "We are flying the plane while building it".
The Group Organisational Development Director, Executive Board member, and I have a good working relationship; we are open and direct and we learn from each other. It is a two-way process. Before each NRC meeting we have a pre-meeting to review the agenda items and the materials. We discuss areas on which to focus, what could be contentious topics and how to manage the discussions. I play "devil‘s advocate" to pre-empt what questions could be asked by the Board members so that the presenters are prepared.
NRC has varied activities such as agreeing a new Expat Policy, Succession Planning, Female Talent Pipeline, Engagement and Reward programmes. One of the biggest challenges is around Reward where we try and balance the needs and concerns of a state-owned company that is operating in European/Global markets and is publicly listed.
During the last year we did a lot of hiring for the Boards, currently we are also looking for the members of the Committee for Risk Management and Business Ethics Supervision, with the focus on Safety and Health.
I am glad to work with a management team which is very motivated.
I am excited to work in such a team and I am excited to talk about it.
We work very well together. We talk very openly, have discussions and debates, looking at things very objectively from the business perspective – actually we do not have many disagreements, and when we do, we manage to find solutions. Always looking through business lenses, and never with any emotional load when discussing the questions – maybe this is why we are working well.
The independent Supervisory Board members are from 5 different countries/ different nationalities, we all worked for private businesses where the things are done differently than in state owned companies (less bureaucracy and faster decision making).
It is good and useful that we can share our different experiences/ ways of working in different cultures. Two of us in the Supervisory Board are not from the Energy sector (myself and Tim Brooks) – so we have all the opportunities to learn about the Energy sector from other team members.
It is also very useful that we have very open minded members representing the state – through them we 'educate‘ the Finance Ministry on international business best practices.
I really enjoy being a member of a Supervisory Board. I 'have got' everything: state owned, publicly listed, changing and growing business with a truly diverse Supervisory Board. It is a business that can have a big impact on the planet too. I am passionate about the Company and my role in terms of how I can contribute to the business
Be proactive, use all the opportunities to network and let people know you are interested in obtaining a Board position. Take on advisory Board roles to gain experience. I would recommend attendance at a Board/Director Programme for collegial body members – to better understand the role and responsibilities of Board members and understand the governance issues. It also shows potential Boards you are serious about joining them.