The sole shareholder of the company is the State Treasury. The powers of the State Treasury were exercised in 2022 by the Government Plenipotentiary for Strategic Energy Infrastructure.
MANAGEMENT (G)Management principles – corporate governance and organisational culture
Polskie Sieci Elektroenergetyczne S.A., based in Konstancin-Jeziorna at ul. Warsawska 165 is a single-shareholder company owned by the State Treasury. The company has been operating as an independent electricity Transmission System Operator (TSO) on the territory of the Republic of Poland for 18 years.
The statutory purpose of our organisation is to provide electricity transmission services and ensure the safe and economic operation of the national power system (NPS), as well as the interaction of this system with other power systems with which it is interconnected. The PSE's responsibilities are strictly defined, and operations are conducted under a license.
Company’s governing bodies
Supervisory Board
The Supervisory Board (SB) of PSE shall exercise permanent supervision over all areas of the activities of the company. The members of the Supervisory Board are appointed by the General Meeting of Shareholders for a term of office of three years. The Supervisory Board acts pursuant to the Commercial Companies Code and other laws, the Company's Articles of Association, resolutions of the General Meeting and the Rules of the Supervisory Board.
The composition of the Supervisory Board as at the date of this publication is as follows:
- Paweł Łatacz – Chairman of the Supervisory Board
- Marcin Czupryna – Vice Chairman of the Supervisory Board
- Paulina Mielcarek – Secretary of the Supervisory Board
- Ksenia Ludwiniak – Member of the Supervisory Board
- Tadeusz Skobel – Member of the Supervisory Board
- Magdalena Przybysz ─ Member of the Supervisory Board
- Konrad Fischer ─ Member of the Supervisory Board
- Przemysław Humięcki ─ Member of the Supervisory Board
- Rafał Wasilewski ─ Member of the Supervisory Board
- Adrian Kalisz ─ Member of the Supervisory Board
- Paweł Ernst – Member of the Supervisory Board
SB Committees
The PSE Supervisory Board may, in order to assist it in carrying out its supervisory tasks, appoint committees from among its members. There are currently three committees: Audit Committee, Investment Committee and Strategy Committee. The latter was appointed in 2022.
The Audit Committee (AC) was appointed by the Supervisory Board on 30 June 2022, by Resolution No. 79/VII/2022. It consists of at least three members appointed by the Supervisory Board for the term of office of the Supervisory Board from among its members. The Audit Committee supports the Supervisory Board in particular in supervising:
- implementation and control of financial reporting processes in the company and its capital group,
- functioning of internal control systems in the company,
- operation of risk identification and management systems,
- independence of internal and external auditors,
- the company's relations with the related entities within the meaning of the Accounting Act of September 29, 1994.
The Investment Committee (IC) was appointed by the Supervisory Board on 30 June 2022, by Resolution No. 74/VII/2022. It consists of at least three members appointed by the Supervisory Board for the term of office of the Supervisory Board from among its members. The Investment Committee supports the Supervisory Board in particular in supervising:
- implementation of the company's investment project plan,
- transmission grid development plan.
The Strategy Committee was appointed by the Supervisory Board on 16 December 2022 by Resolution No. 141/VII/2022. It consists of at least three members appointed by the Supervisory Board for the term of office of the Supervisory Board from among its members. The Investment Committee supports the Supervisory Board in terms of:
- monitoring the implementation of the Company's and the PSE Capital Group's Strategy by PSE units,
- giving opinions on draft amendments to the Strategy,
- analysis of the achievement of current management KPI targets and proposed KPI for the next year.
Management Board
Members of the Management Board, for a 3-year term, are appointed by either the General Meeting or the Supervisory Board. Currently, the Management Board is composed of 6 members.
The composition of the Management Board as at the date of this publication is as follows:
- Tomasz Sikorski ─ President of the Management Board
- Jarosław Brysiewicz – Vice President of the Management Board
- Jarosław Jaźwiński ─ Vice President of the Management Board
- Paweł Stańczyk ─ Vice President of the Management Board
- Włodzimierz Mucha – Vice President of the Management Board
- Andrzej Zienkiewicz – Vice President of the Management Board
The qualifications and procedure for appointing members of the Management Board are governed by law, the Articles of Association and the owner's guidelines. According to the Articles of Association, a member of the Management Board may be a person who meets all of the following conditions:
- has a university degree or a university degree obtained abroad recognised in the Republic of Poland,
- has been hired for at least 5 years under an employment contract, nomination, election, appointment, cooperative employment contract, or provision of services under another contract or self-employment,
- has at least 3 years of experience in managerial or independent positions or resulting from self-employment.
A member of the Management Board must also meet all requirements set forth in separate regulations and must not violate restrictions or prohibitions on holding the position of a member of a management body in commercial companies. Candidates for members of the Management Board submit to the body appointing the Management Board appropriate declarations of their functions, shares held and other entitlements to participation in business entities.
The Management Board must also include persons with experience in the power sector (at least five years of professional experience) ─ in the case of a six-member Management Board, at least two persons.
The Management Board, indicating powers and responsibilities, has established committees to conduct regular supervision and coordination of activities in areas of particular importance to the company.
The committees are opinion and advisory and decision-making bodies, assisting the Management Board in specific areas and recommending changes to projects included in the PSE Project Portfolio. According to the statues, the resolutions of matters dealt with by committees can be made in the form of resolutions and decisions specified in the minutes. In matters beyond their authority, the committees request, when necessary, a decision from the Members of the Management Board, the Management Board or other bodies of the company. Every six months, a report on the activities of the committees is prepared for all members of the Management Board, which also includes information on resolutions passed and topics referred for Management Board and Supervisory Board analysis.
In 2022, the committees considered more than 1116 matters, of which about 11 percent were presented to the company's bodies for consideration.
The composition of the committee is determined by the Management Board through a resolution establishing the committee and adopting its statue. The committees are composed of the members of the Management Board responsible for the respective areas and managing the units, as well as experts in a given field:
Investment Committee – the area related to the investment process management in the PSE Capital Group, and making key decisions concerning projects from the PSE project portfolio assigned to the programmes implemented as part of the committee. The chairman of the committee is a Member of the Management Board supervising the investment area;
Standards Committee – the area related to typification of technical solutions used in electric power transmission and distribution systems. The chairman of the committee is a Member of the Management Board supervising the area of technical and technological standards;
Security Committee – the area of maintaining and enhancing physical, technical, personnel and legal security in the PSE CG, as well as ensuring the security and continuity of operations of the Critical Infrastructure Operator, requiring decisions that exceed the authority of the heads of PSE units and not requiring collegial decisions of the Management Board. The chairman of the committee is the Member of the Management Board supervising the security area;
Data Governance Committee – data governance area. The chairman of the committee is the Member of the Management Board supervising the ICT area;
Innovation Committee – the area related to adequacy and continuity of performance of research and development projects. The chairman of the committee is the Member of the Management Board supervising the research and development area;
REMIT Committee – the area related to coordination of the implementation of obligations under the REMIT Regulation and secondary legislation. The chairman of the committee is the Member of the Management Board supervising the transmission area;
Grid Codes Implementation Committee – an area for regular supervision and coordination of PSE's activities concerning implementation of the rights and obligations under the Network Codes and Guidelines. The chairman of the committee is the Member of the Management Board supervising the area of international cooperation;
Social Activities Committee – the area of corporate social responsibility in the PSE Capital Group, as well as the educational activities carried out, especially aimed at local PSE stakeholders. The chairman of the committee is a Member of the Management Board supervising the investment area;
Cyber Security Committee – the area related to coordination of ICT and cyber security in the PSE Capital Group. The chairman of the committee is the Member of the Management Board supervising the ICT area;
The company also has two committees established within the structures of specific business units:
- Department of System Management Committee
- and the ICT Department Committee.
The chairmen of these committees are the respective Managing Directors. Both committees were established to coordinate and supervise the work and create policy and effectively integrate project activities with operations in the substantively relevant areas.
The Management Board manages the affairs of the company and represents it in any proceedings before the court, as well as in any out-of-court proceedings. Makes most decisions on matters of greater importance, exceeding the scope of ordinary activities. Some of such decisions require a positive opinion or approval of the Supervisory Board, and some also require the approval of the General Meeting.
As part of the Supervisory Board's supervision information from the most important areas of the company's activities, including economic, social and environmental impact, is periodically presented, eg. information on key events in the company, the most significant investment tasks, the performance of management objectives and the implementation of the Strategy. The Supervisory Board reviews the materials and asks for additional clarification if necessary. The Supervisory Board is assisted in performing its tasks by the committees.
The company's strategy, as a key document, is approved by the General Meeting after a positive opinion by the Supervisory Board. The Management Board, in adopting the 2020-2030 Strategy, formulated challenges affecting the environment and climate action, the economy and market, the social environment and workforce, and governance, such as:
- transition cost – for proper participation in the transition, it is crucial to fairly allocate costs to individual users of the European electricity system,
- climate neutrality – planning and managing the development of the transmission grid must take into account the multidimensional and multidisciplinary environment affecting the operation of the NPS,
- social acceptance – PSE, for the sake of sustainable development and respect for social interests, takes care to regulate the legal status of properties under their own infrastructure,
- generational change – creating an offer that meets the expectations of employees and, at the same time, secures the needs of the employer, for example in the scope of the following:
- managing multi-generational teams – diversity management policies should take into account increasingly diversified workforces, also in terms of age,
- new technologies – the employers offer should make the work environment more flexible, give employees a greater sense of freedom, while increasing efficiency and providing communication free from the traditional constraints of time and location,
- work-life balance – work should enable reconciliation of professional and private life, which can be done, for example, by providing flexible working hours or enabling remote work.
The operationalisation of these challenges is done by setting specific goals, ensuring that the right business capabilities are in place, and indicating how achievement of the goals will be measured and evaluated.
The Supervisory Board Strategy Committee, established last year, plays a special role in this area. Committee members meet at least quarterly to review and discuss issues related to the PSE Strategy. The committee is tasked with, among other things:
- monitoring the performance of the company's business capabilities and directions,
- reviewing plans and strategic concepts,
- providing the Supervisory Board with opinions, conclusions and recommendations on matters related to the performance of the existing Strategy and the design of the new one.
The next ranked document in impact management is the Sustainable Development Strategy.
Attention to sustainability is part of the areas of activity of many units in the company and determines the shape of most of the processes taking place in the company. The Management Board is ultimately responsible for achieving the Sustainable Development Goals. The company's Management Board, among other things:
- establishes structures and functions in the area of impact management,
- sets the tasks and powers of the established structures,
- reviews impact reports and approves final disclosures,
- accepts the results of the work, statements and reports.
Functions and bodies established by the Management Board in the area of impact management:
Committee for social activities – a body appointed by the Management Board, performing the tasks specified in the statue. According to the statue, the Committee carries out corporate social responsibility and education activities in the company's business areas in three strategic areas:
- investment – supporting the investment projects implemented by the PSE, in order to increase their public acceptance,
- operational – reinforcing acceptance of PSE operations in the vicinity of the grid infrastructure being operated,
- strengthening good-neighborly cooperation, building positive, lasting relations and recognition of the company among local stakeholders, i.e. residents, local authorities, budgetary units and NGOs, including public benefit organisations.
The Committee is a consultative, advisory and decision-making body established to assist the Management Board's activities in the areas of corporate social responsibility and education. These activities specifically include:
- undertaking sponsorship cooperation with external entities – in particular with: non-governmental organisations performing activities of a social and charitable nature, local governments and their budgetary units, health care institutions, rescue and firefighting services and others serving the broadly understood security and improvement of the conditions for the functioning of the social infrastructure – and obtaining, in exchange for the in-kind or financial support provided, established sponsorship benefits that will influence the construction of a positive image of PSE among local stakeholder groups,
- granting support to entities in the form of in-kind and financial donations,
- initiating and supervising educational campaigns among residents from the areas of PSE's operations – recipients of investments and the electricity infrastructure in operation (residents, local authorities, non-governmental organisations) – regarding the tasks, role, mission and goals of PSE as the national electricity transmission system operator.
The Committee prepares a document called the “Operational and Financial Plan”, which includes a description and directions of the Committee's activities for the calendar year. The Committee's Operational and Financial Plan and its update are approved by the Management Board by resolution.
At least every 6 months, the Social Activities Committee submits a report on its activities to the Management Board, together with a targeting analysis. It also submits a statement of its activities to the Supervisory Board every 2 months (the report is not subject to the Board's opinion). In 2022, the committee dealt with 582 cases, including community projects under the Strengthen Your Neighborhood programme and support for refugees from Ukraine.
Sustainability Representative – a person responsible for the comprehensive implementation of sustainability principles throughout the organisation, as well as for the day-to-day supervision and reporting of the implementation of projects, tasks and activities covered by sustainability.
In particular, the duties of the Sustainability Representative include:
- participation in the development and updating of key documents for sustainable development (the Strategy and the ZR Action Programme) with substantive support of the Committee;
- analyzing strategic projects for inclusion in sustainable development programmes and alternatives;
- controlling the scope and quality of work performed by implementation teams;
- reporting the progress of project work to the Committee;
- coordination/supervision of the performance and execution of sustainable development (key documents);
- supervision of the reporting process of social responsibility activities.
Representative for Integrated Environmental and Occupational Health and Safety Management System – a person who, under the authority of the Management Board, supervises the operation of the management system, responsible in particular for:
- preparation of a proposal for a list of environmental aspects, goals and objectives of the system,
- supervision of environmental and health and safety monitoring conducted by unit managers,
- approval of internal audit reports,
- preparation of schedules for environmental and HSEQ checks and health and safety inspections,
- responding to reported irregularities and inconsistencies in the operation of the system,
- supervising that units conduct periodic assessments of compliance with legal and other environmental protection and occupational health and safety requirements,
- preparation of the management process review,
- informing Board Members about the functioning of the system, including the achievement of goals and objectives and the results of environmental monitoring.
The performance of the objectives regarding the Environmental Management System is carried out through activities resulting from normative documents adopted in the company (including detailed organisational statues of units, procedures, instructions and orders) and is monitored by the Integrated Environmental Management System Representative and evaluated by the Management Board as part of a management review at least once a year.
In the area of IMS, a special role is played by the President of the Management Board, who supervises the Representative and approves:
- a list of environmental aspects,
- goals and objectives of the system,
- schedules for environmental checks and health and safety inspections,
- findings from management reviews conducted.
Other members are responsible, in their area of supervision, for motivating employees and co-workers to contribute to the system.
The Compliance Representative is responsible for the performance of the Compliance Policy. Key activities in this area include:
- compliance with competition rules and antitrust laws. The task of compliance is to implement mechanisms to prevent PSE from abusing its monopoly position through, for example, discriminatory treatment of contracting parties, imposing onerous contract terms on contractors, or making it difficult for customers to assert their rights;
- transparent relations with contracting parties. A transparent procedure is ensured by relevant internal regulations, such as those on procurement, connection to the transmission grid and contracting. The PSE Code of Conduct for PSE Business Partners plays an important role in PSE. This document is a set of basic principles that PSE follows in its business activities and that our organisation expects our business partners to follow;
- application of principles of ethics. PSE conducts electricity transmission activities and performs TSO tasks based on the principles of responsibility, safety, cooperation, professionalism, transparency and respect for external stakeholders and employees (indicated in the PSE Code of Ethics and relevant internal regulations in the area of human resources management);
- countering bullying, discrimination and violation of labour rights. At PSE, we respect each other and ensure a friendly working environment for everyone. Each employee is personally responsible for applying the ethical principles of the PSE Code of Ethics and the PSE Personnel Policy, as well as other internal regulations. Employees of our organisation should be characterised by mutual assistance, acceptance of different views and beliefs, formulation of criticism only constructive and based on facts, and mutual respect within the team and throughout the organisation.
The Representative for Counteracting Corruption is responsible for the performance of the Anti-Corruption Policy. In view of the above-described policies, all employees, associates and contracting parties of PSE are obliged to act in accordance with the principles of ethics and honesty, the applicable law and the terms and conditions of the policy, bearing in mind PSE's principle of zero tolerance for corrupt behaviour.
The form of approval of the sole shareholder of the company for the activities of the Management Board is a vote of approval. It confirms that the Management Board is acting in accordance with the law and in the interests of the company. The vote of approval is granted after the end of the financial year, by name for each member of the Management Board. The manner of performing the functions in 2022 and the related actions taken were approved by the General Meeting – the vote of approval was given to all members of the Management Board.
Fixed and variable compensation, including performance-based compensation
Management Board
Several factors determine the remuneration of members of the Management Board, as well as the remuneration of the Supervisory Board members. The General Meeting, as the owner, in setting the remuneration is subject to the legal regime currently set forth in the Law of June 9, 2016 on the principles of shaping the remuneration of persons who manage certain companies. According to the aforementioned law, the General Meeting should aim at determining the rules regarding the remuneration of Management Board and Supervisory Board members. These rules apply by virtue of a resolution of the company's General Meeting. With regard to the Management Board, the resolution distinguishes between two types of remuneration: a maximum fixed remuneration paid monthly, and a variable remuneration that depends on the extent to which management objectives are achieved on a financial yearly basis.
The fixed remuneration is due for each calendar month in a given contract year and is defined as a multiple of the assessment base referred to in Article 1, paragraph 3, item 11 of the Act on the principles of determining the remuneration of persons who manage certain companies. The basis for the amount of salary is the average monthly salary in the enterprise sector without profit-sharing awards in the fourth quarter of the previous year, as announced by the Central Statistical Office.
Goals are set for members of the Management Board. The goals sanction the payment of variable remuneration. These goals are set annually and address various areas of the company's operations – including the area of managing economic, environmental and human impacts. The process of verifying that a specific goal has been achieved is cascaded.
After the evaluation of the company's activities on the basis of publicly available statements and granting the members of the Management Board a vote of approval by the General Meeting, the Management Board prepares a report on the achievement of goals. The report is reviewed by the Supervisory Board. First, the Supervisory Board acknowledges that the conditions for awarding variable remuneration are met, determining the amount due, and then the General Meeting approves and awards the remuneration.
Senior management executives
Fixed remuneration is determined in accordance with the tariff contained in the PSE Corporate Collective Labour Agreement (CCLA) and determined based on an analysis of market salaries. Semi-annual bonuses are awarded based on the evaluation of the achievement of goals and objectives in accordance with the provisions set forth in employment contracts. In addition, management executives receive, among other things, subsidized energy costs, subsidized prepaid cards on the Energy Workers Day and Christmas, subsidized meals, and subsidized medical care.
Remuneration rules are set forth in the PSE CCLA negotiated between the employer and the union side. Increases in base salaries are implemented based on an analysis of market data and require approval of the Management Board each time.
Severance payments
Management Board – severance payment in the event of termination of the contract, is due in the event of termination of the contract for reasons other than: material breach of contractual obligations, resignation of the Manager, prior or simultaneous with the dismissal from the Management Board appointment of the Manager to the governing body of any PSE Group company. The manager is entitled to a severance payment of three times his regular salary, provided he has served on the company's Management Board for at least 12 months prior to the date of termination.
Senior management executives – retirement allowance payment in the amount specified in the CCLA, in an amount based on the length of service – in the event of termination of employment on the date on which the employee has fulfilled the conditions for retirement, or in accordance with the Labour Code – if he retires after that date. Severance payments resulting from termination of employment are paid in accordance with the Labour Code.
Retirement benefits
Senior management executives – the opportunity to join an Employee Pension Plan after one year of service, and in connection with the termination of the employment contract at the time of retirement, a retirement severance payment in the amount specified in the CCLA, in an amount depending on the length of service – in the event of termination of employment on the date when the employee has met the conditions for retirement, or in accordance with the Labour Code – if he retires after that date, and compensation for the loss of energy cost subsidies.
The ratio of total annual remuneration for 2022 of the organisation's best-paid person to the median of total annual remuneration for all employees (excluding the best-paid person) is 8.24 including employees hired under the employment contract along with the contracted Management Board.
The ratio of total annual remuneration for 2022 of the organisation's best-paid person to the median of total annual remuneration for all employees (excluding the best-paid person) is 6.14 including employees hired under the employment contract (excluding the contracted Management Board).
The ratio of the percentage increase in total annual remuneration for 2022 of the organisation's best-paid person to the median of the percentage increase in total annual remuneration for all employees (excluding the best-paid person) is 0.97 including employees hired under the employment contract along with the contracted Management Board.
The ratio of the percentage increase in total annual remuneration for 2022 of the organisation's best-paid person to the median of the percentage increase in annual total remuneration for all employees (excluding the best-paid person) is 1.23 including employees hired under the employment contract (excluding the contracted Management Board).
The calculations included the total income of employees in 2 options, including the Management Board and excluding it.
Keeping in mind the legal requirements and responsibilities incumbent on us as TSOs, the sustainable development goals and the assumptions of the EU directives on non-financial reporting, our organisation has assumed a number of obligations.
In addition to the Business Strategy, our company's regulatory map consists of policies, rules and numerous operational documents: procedures, instructions and regulations.
The Management Board expresses declarations about the company's intentions and directions in documents called policies. Some of them are an integral part of the certified management systems implemented at PSE. The declarations promulgated in the policies are at the same time a promise to provide adequate resources, means, and improve processes aimed at implementing the commitments made.
Key operational regulations on three main ESG areas
The regulations adopted by the organisation oblige us to, among other things:
- maintain an appropriate level of power and energy security in a socially and environmentally responsible manner,
- win the favour of the investment environment for investment tasks – so that they can be implemented with the acceptance of local communities, in a manner that does not collide with the broadly understood public interest,
- provide employees with professional development opportunities and building corporate culture based on accepted values,
- monitor the working environment in terms of occupational safety and the natural environment,
- develop and retrofit the network infrastructure in a manner ensuring safe work performance, respect for the landscape, protected areas and areas of high nature value,
- ensure employee compliance with ethics and applicable regulations,
- respect for good practices accepted in communities,
- strive to build partner relations with local communities.
In the implementation of its commitments, the PSE Management Board is supported by committees, area attorneys and commissions.
Ownership structure of the company
The PSE Capital Group was established in order to perform the tasks resulting from the Programme for the Power Sector adopted by the Council of Ministers on 28 March 2006. That programme assumed equipping the electric power transmission system operator with transmission assets and tools for maintenance, operation and expansion of these assets in the form of special purpose vehicles (companies). The PSE Capital Group currently comprises PSE SA and two subsidiaries: PSE Inwestycje SA and PSE Innowacje Sp. z o.o., in which PSE SA holds 100 percent of the share capital. PSE is also related by capital with two foreign-owned entities: Joint Allocation Office SA and TSCNET Services GmbH.
PSE Inwestycje SA
Due to changes in the PSE SA organisation structure, on 8 October 2018 the Extraordinary General Meeting of PSE Inwestycje SA passed a directional resolution to suspend the company's operations. The company's business operations remained suspended in 2022.
PSE Innowacje Sp. z o.o.
The company is a provider of consulting services for analysis, research, new technologies and IT solutions in the power sector.
It carries out the following tasks for the PSE:
- construction of new information systems,
- development and modernisation of existing IT systems,
- conducting research and development works,
- conducting ongoing analysis and research, including technical and economic analysis for development plans,
- organisation of training for TSO Operating services.
JAO
Joint Allocation Office SA provides cross-border capacity allocation services to PSE SA for long-term transmission capacity and as a back-up process under SDAC, among others, and handles settlement of the SDAC process and established balancing platforms. As required by grid codes, the aforementioned services are provided as part of a centralized common European platform. JAO acts as the operator of that platform.
PSE SA owns 1/25 of the JAO shares.
TSCNET
TSCNET was one of Europe's leading Regional Security Coordinators until June 30, 2022, and has served as a Regional Coordination Centre since 1 July 2022. The company provides integrated services to transmission system operators to maintain the operational security of the power system. Services provided by TSCNET include, among others: coordinated transmission capacity calculation, preparation of security analyses, development of common grid models, and creation of system adequacy forecasts at the regional level.
PSE SA owns 1/16 of the TSCNET shares.