CEO Close-Up
CEOs Urged on Best Practices
MARCO ISLAND, Fla.—There’s an old adage that “bad publicity is better than no publicity,” but participants at the CEO Close-Up here were warned not to believe that.
“We’re looking at issues that have arisen in multiple states,” Ty Thompson, NRECA senior corporate counsel, told a general session audience. “And this adverse attention has come from a number of sources.”
Thompson offered a list of potential areas of unfavorable attention along with some suggestions for avoiding it.
“First of all, assuming your state law allows it, it’s probably a good idea to allow either voting by mail or proxy in director elections,” he said, because it increases the ability of consumer-members to participate.
On the matter of directors’ compensation, Thompson said it should be “consistent with your state law and, in particular, consistent with your electric cooperative act.” And, he strongly encouraged accuracy when entering on IRS Form 990 the number of hours worked by directors.
“I have read a number of newspaper articles in the past few years that have looked at an electric cooperative’s Form 990, and looked at the total number of hours it lists that individual directors have devoted to cooperatives,” he said, “And historically, those numbers are awfully small.”
Thompson said that instead of simply basing the hours on the length of the average monthly board meeting, co-ops must consider the full commitment directors make, including time spent on education and training.
While co-op boards in many states can legally hold closed meetings without even notifying consumer-members, Thompson warned there have been moves to change some laws, so he cautioned, “The more you can do voluntarily, the better.”
His suggestions included developing a procedure to allow consumer-members to attend meetings and participate. “By opening up those meetings you do, in fact, increase transparency, which is a good thing,” he said. “And you probably improve relations with your membership.”
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