Wanted: Independent Directors

BENECO is on to something unprecedented. And the company wants it done fast for the sake of transparency and upgrading.

This concerns the bid to increase the number of seats in the board of directors. Right now, there are 11 elected members of the board, six from Baguio City and five from Benguet. BENECO’s wish is to have additional seats in the board, say four or five seats more, which will be allotted as follows: one for a project supervisor and the rest for experts from the ranks of professionals, like electrical engineers and accountants or from members of consumers groups.

The appointment of independent directors is a clamor of the city’s association of retired persons headed by the unsinkable Federico Balanag. BENECO is amenable to the proposal. In the meantime, the appointment of a project supervisor is BENECO’s brainchild. The twin proposals met at the right time. They are now with the National Electrification and Administration. I hope the NEA would find merit in the proposals.

Not that the current crop of board of directors are performing below par. But the bid was meant to provide an opportunity for other stakeholders to sit in the board and learn the ropes of the industry, understand what a regulated industry is all about and participate in the deliberations. Given their background and training as professionals, these independent directors can supply inputs that could result to quality outputs from the board. In addition, their presence could address the cooperative’s detractors who continue to bash BENECO about its purported lack of transparency on crucial issues.

Until today, tongues continue to wag about the purchase of the South Drive lot, the more than P500 million capital expenditure plan for 2010-2013, the propriety of the expenses of the board’s corporate social responsibility and the net loss that appears in the cooperative’s books.

The independent directors will not merely sit on the sidelines of the board’s sessions and observe. No, that will not be the case. That’s why they are called independent directors since they will sit as directors who will be officially recognized as members of the BOD. They will participate in the deliberations, cast their vote on measures submitted on the table and give their views freely and without fear. Whether or not they will be entitled to a per diem will be up to the discretion of the NEA.

The project supervisor, meanwhile, will sit with the board to see to it that all matters taken up and decided upon by the board jibe with industry regulation, NEA policies and rules and performance standards.

Please take note that under PD 269, the NEA has the power to appoint a project supervisor to run the affairs of an electric cooperative whose operations are in shambles and that there is a need for an iron hand to put order in the house. In short, a project supervisor is appointed only when the circumstances warrant, such as when the electric cooperative is on the verge of bankruptcy or when it miserably fails to provide adequate service pursuant to its mandate. But that’s not the case in BENECO. It does not need a project supervisor but it is willing to engage a project supervisor.

This will be the first time in the history of electric cooperatives in the country that an electric cooperative will voluntarily open its doors to independent directors and a project supervisor.

Now, the BARP and the NASECORE have something to look forward to.