Independent directors for the board-A A +A
Thursday, October 10, 2013
THE National Electrification Administration (NEA) has yet to issue the guidelines on the appointment of independent directors to the Board of Directors (BOD) of electric cooperatives but restless employees of BENECO already drew first blood by asking the agency to allow the cooperative to name independent directors to their board. The request was a tough act for it pushed an agenda right on NEA’s turf at a time when the agency appears to be not in the mood yet to tackle the issue.
The move wants to exploit the provision on independent directors under Republic Act 10531, the recently enacted law that revised the charter of the NEA. The motivations though are different. The law envisions that the appointments should be made when electric cooperatives are in dire financial and technical straits. But for the BENECO Supervisors Association (BSA) and the BENECO Labor Union (BELU), their call was prompted by the need to provide more technical and financial muscle to the board despite the cooperative’s plausible scorecard.
Indeed, judging from the way RA 10531 sounded, the appointment of independent directors becomes ripe when an electric cooperative will be tagged as “ailing” or in need of help. But the BSA and BELU wished to push the issue from a totally different perspective -- and that is to secure the presence of independent directors in the board even if BENECO’s books are not considered disastrous.
The position of the employees is to secure for independent directors the remaining four seats in BENECO’s supposed to be 15 man BOD. The idea is that the presence of independent directors can increase the stakes of board discussions with inputs coming from different fields of experience.
The employees have frankly asked Edita Bueno, NEA administrator, on who should be appointed as independent directors. The employees are saying that the electric cooperative must have a hand in the picking of independent directors -- those who are of professional competence, or engineers, management and financial experts whose presence in the board will provide a new dimension and direction.
Simply, BENECO wants to have independent directors that will participate in policy making and formulation of programs that would spell joy for the member consumers. Of course, nothing in this meant to denigrate the present ability of the elected members of the board. The measure though will provide an informal form of check and balance between the elected members of the BOD and the independent directors considering that their respective seats sprang from different sides of the fence.
As correctly stated by lawyer Janeene Depay-Colingan, BSA president, and Edison Casilio, BELU president, the independent directors will be a way the cooperative can address the frequent issues raised by BENECO’s critics. The employees said that the independent directors will be a “means to address the persistent clamor for transparency of our critics including but not limited to the officers of NASECORE-Cordillera and the Blessed Association of Retired Persons (BARP) and some consumers.”
We recall that even the BARP, headed by Federico Balanag, Sr. passed a resolution asking the NEA to appoint independent directors. The proposal, however, lost its wind.
While the NEA is inclined to appoint independent directors only for ailing ECs, we hope that it could up the ante by considering the appointment of independent directors to ECs even if the ECs have no distress signals but are more than willing to provide a room.
I believe this is legal.
Published in the Sun.Star Baguio newspaper on October 11, 2013.