With the municipal elections last month, NOTL Hydro is likely to get two new Board members. Both Betty Disero, who was not re-elected as the Lord Mayor, and John Wiens, who did not rerun as a Councillor, are resigning from the Board.
NOTL Hydro is a touch unusual as a corporate entity. We were incorporated under a section of the Electricity Act of Ontario. Among other things, this means the company can be owned by the Town of Niagara-on-the-Lake. Municipalities, under the Municipality Act of Ontario, are normally not allowed to own shares in private companies. In most other respects, NOTL Hydro is just like any other corporation and must comply with the Ontario Business Corporations Act; including the need to have a Board of Directors.
NOTL Hydro currently has seven Directors: three are traditionally representatives of the Town and four are “independent”. Our regulator, the Ontario Energy Board, requires that at least one-third of the Board be “independent” in the sense that they are not affiliated with any other related organization (like the Town).
All the Directors are appointed by Council as the Town is ultimately the sole shareholder of NOTL Hydro. Council can remove or add Directors at any time.
The three Town representatives are appointed by Council for a term coinciding with the four-year term of Council. They have traditionally been the Lord Mayor, the Chief Administrative Officer (currently Marnie Cluckie) and a Councilor. Based on this, Lord Mayor Gary Zalepa and one Councilor (to be determined) will be appointed to the Niagara Hydro Board.
The terms of the independent Directors are staggered and they are appointed at the Annual General Meetings which are usually in May. The four independent Directors are currently:
|Jim Ryan||Chair||21||Business executive (retail, energy)|
|Philip Wormwell||Director||9||Ontario Government, former VP Finance, NOTL Hydro|
|Jim Huntingdon||Director||8||Former President, NOTL Hydro|
|Nick Miller||Director||7||Former executive (telecom)|
The following are some of my personal thoughts on the Board and its composition:
- It is appropriate that the majority of the Board be independent. The electrical utility industry is complicated and independent Directors have the time to get up to speed. Many also have background experience and are retired. Town representatives have all the demands of their Town responsibilities (which can be considerable) so may not be able to devote the same amount of time and energy to their Director role.
- Town representation on the Board is still appropriate and needed. The Town is the shareholder and there is substantial overlap between Town and Hydro activities. These Directors provide a direct channel of communication going both ways.
- This Board is cognizant of the difference in roles between a Board and management. That is not always the case in this industry.
- If there is one shortfall with the Board it is the shortfall in female representation. Two of the seven were female and with the loss of Betty Disero we could be down to one depending on which Councilor is appointed. This is being worked on. Unfortunately, a recent offer of a Board position to a qualified female was declined.
The role of the Board is extremely important. The primary responsibilities of the Board are to appoint the executive management and to set the overall strategy. More importantly though, the Board sets the “tone” for the organization. Many of the attributes I have been discussing in this blog (safety, independence of thought, fiscal prudence, long term viability, customer focus, etc.) stem from the Board. Much of the success of NOTL Hydro can be attributed to quality of Board direction that has been received over the past 20+ years.