At New Hampshire Electric Cooperative (NHEC), it’s that time of year again – the annual CEO appraisal process. Don’t think that it is a quick fill-in-the-blank checklist. Now in its initial stages, the CEO evaluation won’t be complete until mid-April.

Led by the co-op vice-chairman, the appraisal process will involve not only the CEO and board, but also members of the co-op’s senior management team working with the co-op’s human resources director.

“It’s almost like a corporate 360-degree professional review of the CEO as a leader and manager. It is very complete and detailed,” said NHEC Board Chairman Joe Kwasnik. He added that the present review will be followed up in October with a lighter evaluation.

Kwasnik, who has served on the board since 2010, said the review is mandated by a long-standing board policy. It results, he said, in a board and CEO relationship that is open, transparent, frank, and above all, fair.

CEO Evaluation is a Shared Responsibility

The review is led by the board’s vice-chairman, Kwasnik explained. It begins with a series of questions that the CEO answers as a self-assessment in carrying out the board’s strategic goals and operational objectives. All the questions are vetted by the board and deal with a number of issues ranging from achieving strategic goals to personnel management to dealing with the members and public.

NHEC’s assessment also includes senior managers in the co-op. They, too, respond with written comments to questions relating to the CEO’s operational and managerial skills. Kwasnik stressed that this phase is conducted so neither the CEO nor the board is aware of any of the respondents’ identities. The comments are then gathered by the co-op HR director and forwarded to the vice-chairman.

Following the assessments by the CEO and senior managers, the Board then provides its own assessment of the CEO performance. This year there are 7 questions that the Board members will respond to.

By the middle of April, all of the material will be included in a detailed report that is then presented to the CEO by the vice-chairman along with the board secretary and assistant-treasurer.

The interaction between the CEO and the vice-chairman is a bonus for the co-op, Kwasnik said. It elevates the vice-chairman to a more active role, plus it increases the working relationship between the two – a necessary dynamic for board officer succession.

Detailed Process Provides Deep Insights, Respects CEO’s Position

Kwasnik agreed that the process is detailed but he said that it works well for the co-op.

“It is designed to promote a lot of cross-pollination with all the appropriate parties. A lot of good insights come from it. We believe that it is part of good governance. The CEO is our only employee, yet our concern is for the whole co-op. If there is a part that’s broken or needs some repair, we need to know about it.”

Though the process is designed to yield detailed knowledge about the CEO’s successes and failures, the board is careful not to overstep its responsibility or micromanage. “In terms of how to fix or remediate, that’s up to the CEO.”

“In an organization, CEOs are often alone. They are in a position of isolation in many cases,” said Kwasnik, whose day job is as a consulting engineer in climate change and sustainability. Much of his career was at National Grid, an investor-owned energy supplier to about 20 million customers in Massachusetts, New York and Rhode Island. He served as Vice President of Environment for U.S. Operations and eventually headed the company’s Climate Change Initiative.

NHEC’s process respects the CEO’s special position, Kwasnik said. Executives at that level, he said, are already motivated and knowledgeable. Such an individual deserves deep and actionable feedback.

It also fulfills the duty of care that a board must demonstrate.

“We like the formalized approach. It provides significant focus by the Board, the CEO and management on our respective roles in service to members. It works for us,” Kwasnik said.