Academic journal article Management Quarterly

The Board's Job in a Competitive Utility Environment

Academic journal article Management Quarterly

The Board's Job in a Competitive Utility Environment

Article excerpt

Part 1 of this article addresses the question, What is the role of a rural electric board of directors in an industry that is changing rapidly? Part 2, which will appear in the next issue of MQ, focuses on how your board can best ensure that it is able to fulfill its role.

Analyzing your board's current focus and key concerns: How does your board spend its time now?

Just for a moment, think about how your board uses its meeting time. After all, it is only as a whole board, collectively, that rural electric directors can make decisions and take action. If you were to list the top half-dozen agenda items in terms of the amount of time spent on them, what would they be?

For example, how many of the following items might appear on your list?

* Reviewing the Form 7.

* Reviewing the list of checks written by the cooperative.

* Reviewing operating policies (like line extensions and delinquent bills).

* Discussing the details of personnel policies.

* Discussing line items in the budget and workplan.

Now consider a different question: What are the issues and concerns that your board finds most difficult to address - those that give you heartburn, those that keep you awake at night after a board meeting?

I asked this question of a group of 50 directors in a recent meeting at their Statewide Association headquarters. Here are some of their responses:

* Economic development.

* Loss of load.

* Loss of territory.

* Service reliability.

* Consolidation or merger.

* Rates - both wholesale and retail.

* Being competitive.

* Large loads considering self-generation or co-generation.

If you ask yourself these two questions - what your board spends its time on, and what your board finds most difficult to address - and you end up with lists that do not have the same items on them, what might that mean? According to John Carver, author of Boards That Make a Difference, it would mean that your board is much like many other public and non-profit boards:

. . . most of what the majority of boards do either does not need to be done or is a waste of time when done by the board. Conversely, most of what boards need to do for strategic leadership is not done.

Now, this may seem a bit harsh. In fact, when Carver's book was first published, it was not universally welcomed by nonprofit executives. The problems that the book addresses, though, and the solutions that it proposes, may have real value for rural electric boards today. But I am getting ahead of myself . . .

If you really want to be objective about answering these two questions, you might try a simple exercise. First, figure out how much time your board has together in duly constituted meetings, regular or special:

Length of your typical board meeting = _____ hours

x 12 Monthly Meetings = _____ hours

+ Hours spend in special board meetings = _____ hours

Total available board meeting time = _____ hours

Next take a look at a few of your board meeting agendas, and estimate the time you spend, over the course of a year, on each of the items on the two lists described earlier. Be brutally honest with yourself. If your board really does tend to extensively discuss vehicle purchases, estimate the time spent realistically. If your board routinely spends the first 30 minutes of each board meeting asking questions about the check list, for example, that's 30 minutes times 12, or 6 hours (360 minutes) per year.

Now add up the total time your board spends on your heartburn issues (the ones that appear on your list of answers to the second question), and divide that by the number of total available board meeting hours. If the answer is less than 50%, you may have a problem. If the answer is much less than 25%, you are almost certainly micro-managing. More importantly, you are spending so much time doing or reviewing management's job that you are almost certainly not doing the board's job. …

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