COLUMBUS, Ohio—At a time when Americans are increasingly losing trust in institutions large and small, NRECA President Phil Carson urged fellow co-op leaders to strengthen their focus on governance.
"Trust is essential for the success of electric cooperatives, and in major part it's built and maintained by good governance," Carson told the Regions 1 & 4 meeting on Sept. 7.
He stressed that "my gut feeling is that by and large, our cooperatives are practicing good, solid governance." That said, Carson suggested five areas where leaders can take a closer look, starting with the process for nominating and electing directors.
"Is it open? Is it transparent? Is it democratic?" he asked.
Carson, a director at Tri-County Electric Cooperative in Mount Vernon, Illinois, also said leaders can look at compensation for everyone at the co-op, including directors and the CEO.
"If we put that compensation on the front page of the newspaper, how would our members feel about that?" he asked. "Can it pass the front-page test?"
Third, noting that "members are not only members, they're the owners," Carson said to consider "what they have the right to look at." He called for having processes in place for when requests are made for various materials.
That led to item No. 4, with Carson asking when it comes to co-op assets, "do we treat these assets as the assets of members, or, over time, have we developed attitudes and practices that say, 'We're directors or we're employees. We have a special privileged position'" with regard to those assets.
Finally, Carson said to reinforce protections against fraud, noting that "fraud tarnishes image. It damages member and public confidence."
Ultimately, Carson said, "the goal is to embed a culture of good governance at co-ops and cultivate it."
For more on governance,
check out this new series of online educational videos in which co-op and industry experts offer comments on today's most important governance issues.