Every month, CEO/General Manager Tony Mallory has a message for our members in Your Co-op Connection in Rural Missouri.
May 2024
Directors play critical role to safeguard co-op's interests
Steering is hard.
Does anyone remember using a stick shift – four on the floor or five on the tree? If so, you may also recall times when your vehicle’s steering wheel was near-to-impossible to turn. Power steering was a terrific innovation.
The world has moved on from having vehicles with clunky, slow steering. Now, it’s super simple to make your directional choices in a motor vehicle. These days, even lawn mowers have fancy zero-turn steering.
This is another terrific innovation, but it does take some getting used to. For those who have never used one, a zero-turn mower requires the operator to use levers rather than a steering wheel. The levers are quite sensitive, and the response to a lever push is immediate. This can be a humbling experience for a first-time user. I admit, this is how I felt the first time I used one.
Why am I talking about steering? Well, we’re well into mowing season at this point. But that’s not my motivation. Thinking about steering is directly related to the role of the board of directors of this cooperative.
This month is the start of the petition period for members interested in serving on the board. We have an open nominations process in which any consumer-member who meets the qualifications defined in the member-approved bylaws can choose to run. See elsewhere in this newsletter for more specifics on the process.
What I want to focus on is the critical role members of the board play in steering the cooperative.
Being a director is an important and sometimes difficult role. A person must be able to step away from day-to-day operations and see the big picture. This is required, no matter the background or expertise of an individual board member. Directors must analyze complex situations and make tough decisions in the best interests of the cooperative.
In order to fulfill this critical role, a director must be willing to dedicate the time and brain power necessary to become familiar with the electric utility industry as a whole and the electric cooperative network specifically. A director need not be a utility expert or a financial wizard. But a director must be able to learn and understand some unique and complex things.
Methods of financing, planning, budgeting, and accounting are somewhat unique in our not-for-profit cooperative business model. Plans for utility operations and engineering can be hard to understand. Requirements for robust cybersecurity, legal compliance, and governance transparency also pose unique challenges to a cooperative board of directors.
In fact, steering the cooperative at the board level is not at all like handling a zero-turn lawn mower. It’s more like steering an ocean liner!
Decisions made in the boardroom must be long-term and strategic, not “zero-turn.” The focus must be on the sustainability of the cooperative, both in financial terms and in terms of continued service to our members and our communities.
There are a number of key challenges facing the electric utility industry in the near future. Potential candidates, and ultimately the members who vote in the director election, should think about the critical role directors play in steering the cooperative. You deserve smooth sailing.