How to use the board of directors to build a more resilient enterprise.
Utility boards of directors tend to resemble each other. Pick up any annual report and you're likely to find a group portrait comprising a representative of the investment community, a distinguished accountant, the president of a local bank, the owner of a small but growing local business, perhaps a venerated athletic coach, a responsible public activist-an assortment of indisputably sterling individuals representing the community served by the utility's franchise. Such a board reflects a "stakeholder" view of the utility as an enterprise engaged in the judicious balancing of multiple claims and interests.
These boards efficiently perform the legal functions expected of them, such as approving budgets, and audit reports and officer appointments. They review and approve Sabanes-Oxley compliance meaures. They receive briefings about the utility's business filled with facts, statistics, and organizational charts. They review significant business initiatives and investments and provide (usually) or withhold (rarely) approval. They receive binders filled with performance statistics. They proffer business judgment when solicited. Their very presence imposes a form and regularity to the enterprise, as well as a process discipline around important decisions. Their stakeholder sensitivities help ensure that the company remains sound, sensible, and mainstream.