Governance For NRECA

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National keynote presentation on governance basics for directors of electric cooperatives.

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Governance For NRECA

  1. 1. 1/12/2008 NRECA CEO Close‐Up Indian Wells, California Ellen‐Earle Chaffee, President Valley City State University January 16, 2008 • Great governance is a quest. • The basics are well‐known and change little.  • Greatness and misery lie in the human factors. • Prevent major mistakes. • Automate the basics. • Revisit them on a regular schedule. • Expect greatness. • Learning, partnership, values  • Applied to strategy and interpretation. 1
  2. 2. 1/12/2008 Short Stories that Made Headlines • Board of Regents includes • three US Senators,  • three US Representatives,  • the Vice President, and  • the Chief Justice of the United States 2
  3. 3. 1/12/2008 • Board member heads a teachers union,  pickets. k • Board member expected favors, coach was  fired. • Board member recommended hiring a  bodyguard investigated for child molestation. yg g http://www.ajc.com/metro/content/metro/clayton/stories/2007/12/15/clayethics_1216_3DOT.html • Board member heads a teachers union,  Conflict of interest Conflict of interest pickets. k • Board member expected favors, coach was  Personal power fired. • Board member recommended hiring a  Old boy network bodyguard investigated for child molestation. yg g http://www.ajc.com/metro/content/metro/clayton/stories/2007/12/15/clayethics_1216_3DOT.html 3
  4. 4. 1/12/2008 • Spying on employee, misappropriation of Spying on employee, misappropriation of  resources, favors for friends, illegally large  surplus • Director arrested (felony), fired, 16 mo. pay • 5 whistleblowers; one fired, one suspended p • AG investigation of management • AG investigation of board chair • Roles and responsibilities report • New Chancellor to strengthen the “system ”  New Chancellor to strengthen the  system, supervise Presidents • One powerful President went renegade • Chancellor intervened 4
  5. 5. 1/12/2008 • Support for Chancellor: 10/11 presidents,  statewide faculty, all but one newspaper • Board reaffirmed “roles and responsibilities” • Board negotiated Chancellor’s resignation.   Cost: $200,000 5
  6. 6. 1/12/2008 • Four‐year terms, no board education • Trappings do not replace education • R&R report detailed the confusion, not  the expectations  • Power trumped policy We Know What To Do. We Just Don’t Always Do It. Why? 6
  7. 7. 1/12/2008 • Too complicated • l Personality trap • Hunky Dory • Discourage questions • The buck stops where?? “Everything is perfect, Mr. Chairman. Blue skies.  Spring is right  around the corner.”                                      ‐‐CEO Jones • Oversimplify • Focus on decisions  d • Personality trap • Hero complex • Hold back Hey, this is FUN! I can do this! Chairman Smith 7
  8. 8. 1/12/2008 Put it in Writing Co‐ Co‐op CEO Board 8
  9. 9. 1/12/2008 Ensure  organization  • Are we doing what we  fulfills its  are supposed to do? mission Ensure  organization’s  • Will it exist and succeed  long‐term  for a long time? viability Duty of CARE Duty of LOYALTY Duty of OBEDIENCE • Decide and act in good  • Decide and act in the  • Faithful to founding  faith best interest of the  documents • Prudent person level of  organization, protect  i ti t t • Obey the law care and support Where does it say, “Focus on finances???” 9
  10. 10. 1/12/2008 Transparency Roles Mission HOW WHAT • Codify it (policy manual) • Mission fulfillment • Annual calendar  • Organizational longevity • Flow chart it • Accountability • Hang it • Roles and responsibilities • Set criteria • Transparency • Make it into a form • Leadership succession • Assign it to a Board committee Assign it to a Board committee • Strategic goals Strategic goals • Measure it • Conflict of interest • Headline it • Legal issues • Review it routinely • Performance improvement Fiduciary, Strategy, and Interpretation I S F 10
  11. 11. 1/12/2008 Governance Pyramid INTERPRETIVE Cultural, Social Systems Integrated Systems  Theory STRATEGIC Biological Systems FIDUCIARY Mechanical Systems E. Chaffee.  "The Concept of Strategy:  From Business to Higher Education."  Higher Education:  Handbook of Theory and  Research, Vol. 1.  New York: Agathon Press, 1985, 133‐171. Governance as Leadership: Reframing the Work of Non‐Profit Boards by Richard P. Chait, William P. Ryan, and Barbara E. Taylor, NY:: Wiley, 2004. Raising Rates Example INTERPRETIVE Re‐examine assumptions Contrarian scenarios Tell the story: Communication plan STRATEGIC New technologies Alternative sources FIDUCIARY Analyses Efficiencies 11
  12. 12. 1/12/2008 There ELEVATION 100’ •Mission •Longevity Here ELEVATION 10’ I S F I S http://www.balancedscorecard.org/basics/bsc1.html F 12
  13. 13. 1/12/2008 There Th •Customer Benefit •Internal Business Processes •Learning and Growth •Financial I S F • Learn • Governance, Industry • Communication skills • Values and priorities Expectations,  soft  • Expectations “soft automation” I S F 13
  14. 14. 1/12/2008 • Written, reviewed, revised, enforced member  expectations; term limits • Focus on Quality • Speak the headlines • Round the table Round the table • Distinctly different Board candidates • Governance staff and budget I S F • Well educated board  Well‐educated board • Shared vision and strategies • 50+ percent discussion – no vote • Strong, trusted board committees • Consent agendas Consent agendas I S F 14
  15. 15. 1/12/2008 Governance Pyramid Summary INTERPRETIVE LEARN TOGETHER, BUILD INTO THE AGENDA . STRATEGIC PARTNER, BUILD INTO THE BALANCED SCORECARD FIDUCIARY AUTOMATE, BUILD INTO THE CULTURE • Great governance is a quest. • The basics are well‐known and The basics are well known and  change little.  • Greatness and misery lie in the  human factors. • Prevent major mistakes. • Automate the basics. • Revisit them on a regular  schedule. schedule • Expect greatness. • Learning, partnership, values  • Applied to strategy and  interpretation. 15

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