WESTERN ELECTRICITY COORDINATING COUNCIL
BOARD PRINCIPLES OF CORPORATE GOVERNANCE
Under Utah law, the Western Electricity Coordinating Council (“WECC” or “Company”) is
managed under the direction of an independent Board of Directors (“Board”). The Board establishes broad
corporate policies and authorizes various types of transactions, but it is not involved in day-to-day
management and operations. Its various responsibilities include but are not limited to the selection,
evaluation, and compensation of the Chief Executive Officer (“CEO”), the understanding and approval of
corporate strategies, and the understanding of the major issues and risks the Company faces on an ongoing
basis.
The mission of the Board is to foster the long-term success and corporate sustainability of the
Company consistent with its responsibilities to Members, other stakeholders, governmental authorities, and
end-use customers. The Board performs a central role in achieving this goal by ensuring that management
is capable of performing its duties and achieving its objectives consistent with the Company’s strategic plan
and core values.
Directors also have the obligation to ensure that the Company’s disclosures include accurate
information that fairly presents the Company and its operations to stakeholders and the public in
conformity with applicable laws and regulations. This is also consistent with the Internal Revenue Service’s
designation of the Company as a tax-exempt social welfare organization under Section 501(c)(4) of the
Internal Revenue Code.
The Board has adopted the following Governance Guidelines to provide a framework for the
general governance of WECC and its Board and committees.
BOARD OF DIRECTORS
1.
Role of the Board of Directors
The Board is elected by the Members to act on behalf of a broad and diverse stakeholder community that
looks to the Board for leadership on the reliability issues facing the electric industry in the Western
Interconnection. Each Director has a responsibility to be open and honest, though respectful, in
communications with others and to be fair and impartial in all aspects of his or her deliberations and
decision-making. Each Director has a responsibility to constructively engage in furthering WECC’s
mission, including a responsibility to raise issues or viewpoints of importance to that mission even when
those issues or viewpoints appear to be unpopular.
Specifically, in accordance with applicable law and the WECC Standards of Conduct for Members of
the Board of Directors, each Director has two primary duties:
•
•
Duty of Care requires the Director to use the care that an ordinarily prudent person
would exercise in a like position and under similar circumstances in respect to performing the
functions of a member of a board of directors. This duty of care is generally thought to have two
components: the time and attention devoted to the organization’s affairs (including preparation
for and attendance at meetings) and the skill and judgment reflected in decisions that affect the
organization.
Duty of Loyalty requires the Director to act at all times in the best interests of WECC and its
Members as a whole, unhampered by any personal pecuniary gain or the interests of another
person or organization. This duty includes maintaining the confidentiality of confidential
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information and communications as well as adherence to WECC’s conflict of interest guidelines
and policies (see Section 6).
In addition, Directors are expected to adhere to the law and to the highest ethical standards in
their own conduct and to assure that the organization operates to further its stated objectives in
compliance with legal requirements and the highest ethical standards. Directors will adhere to U.S.
Government rules with respect to the acceptance of gifts related to their position as a Director of
WECC, as briefed to the Board from time to time by the WECC General Counsel.
Director Succession
2.
The Board is committed to ensuring that WECC continues to have as effective a board as possible, given
the importance of its responsibilities. Achieving this goal involves balancing the value of maintaining
experience and continuity with the value of bringing in new ideas and fresh perspectives. Therefore, in
addition to applicable requirements contained in the WECC Bylaws, the Board recommends the WECC
Nominating Committee observe the following guidelines in proposing nominees for election as
Directors:
• Each year, the Nominating Committee should include in its nominating report to the Member
Advisory Committee (“MAC”) a calculation of the average tenure of the Directors based on the
tenure of candidates selected by the Nominating Committee and those Directors whose terms are not
expiring.
•
To the extent feasible, the Nominating Committee should determine, prior to soliciting
suggestions for candidates, whether the Committee expects that one or more incumbent Directors
will not be re-nominated.
While the Company’s Bylaws do not limit the number of terms that an individual may serve as a Director,
the Board believes that as a general rule directors should serve a minimum of two consecutive terms if he
or she has demonstrated fully acceptable performance, but should not be re-nominated or reappointed
after he or she has served on the Board for three (3) consecutive full terms; provided, however, that said
Director may stand for one (1) additional consecutive term upon sufficient justification provided to the
Nominating Committee.
Decision Point: Should there be a minimum period of service for directors. If so, does this language bind or
merely inform directors who serve on the Nominating Committee?
3.
Process for Selection of Board of Directors Chair, Chair-Elect and Vice Chair
The Board will conduct annual elections for the Chair and Vice Chair positions coincident with the Annual
Meeting. The Governance Committee, meeting in closed session, will determine Chair and Vice Chair
candidates for recommendation to the entire Board. The Governance Committee should strive to
recommend only one candidate for each position, but may recommend up to two candidates per position for
consideration by the full Board. The Board may then discuss candidate qualifications and other
considerations in closed session with the candidate(s) absent. Election of the Chair and Vice Chair shall
then be by majority vote of the Board by secret ballot in open session with the candidate(s) absent.
Decision Point: Should Board officer elections be conducted by secret ballot?
It is generally intended that an individual selected to serve as the Chair shall serve for two consecutive
one-year terms. No individual will serve as the chair for more than three consecutive one-year terms.
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Decision Point: Should there be a limit to how many terms a director can serve as chair?
The Vice Chair shall perform the duties of the Chair in the Chair’s absence.
If the Chair leaves the position before the end of his or her expected service as Chair, the current Vice
Chair will not automatically become Chair, but will perform the duties of the Chair for the remainder of
the former Chair’s term, unless the Board determines to elect another Director to serve as Chair for the
remainder of that unexpired term. In that event, the Board may elect said Chair without prior
recommendation by the Governance Committee.
4.
Duties and Responsibilities of the Chair
The Chair is a peer of the other Directors; each Director has an equal voice in matters before the Board.
However, the Chair has the additional responsibility to plan, coordinate and conduct the business of the
Board. The Chair shall be unbiased in the conduct of Board business but is free to express personal
opinion, as are all Directors. The Chair, in consultation with the CEO and the Directors, shall prepare the
agenda for each meeting. As provided in the Bylaws and committee charters, the Chair may make
committee appointments and assignments after reasonable consultation with all Directors.
5.
Confidential Information
To the extent permitted by law, each Director must maintain the confidentiality of (1) any confidential or
proprietary WECC information disclosed or available to the Director; (2) any confidential or proprietary
information of WECC members to which the Director has access by virtue of his or her position with
WECC; and (3) any confidential or proprietary information of others that has been provided to WECC on
condition of confidentiality.
6.
Representation Policy
Individual Directors should act in a manner that recognizes that they do not represent WECC, nor are they
authorized to speak or communicate on behalf of WECC, unless authorized to do so by the Chair or the
CEO.
A Director may indicate that he or she is a WECC Director, provided that this is done for
identification purposes and provided that opinions expressed and statements made are attributed solely to
the individual involved rather than to the Board or WECC. Directors may state WECC policy where
this can be done accurately. They may also describe WECC activities, plans and involvement where this
can be done accurately and is consistent with requirements to maintain confidentiality.
Except as authorized above, WECC’s Chair and CEO, or any person authorized by them, shall represent
WECC and speak on its behalf on all matters.
BOARD AND COMMITTEE MEETINGS
7.
Policy with Respect to Meetings of the Board
Meetings (face-to-face and by teleconference) of the Board and of committees established by the Board
from time to time shall be open to WECC members and to the public, subject to reasonable limitations
such as the availability and size of meeting facilities; provided that a meeting may be held in or adjourned
to closed or executive session where the subject matter of the meeting so warrants, consistent with the
provisions of WECC’s Bylaws and these Governance Guidelines.
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8.
Types of Meetings
In general, a meeting of the Board or any committee established by the Board shall be conducted as one
of the following types of meetings:
•
•
Open Meeting. WECC members and the public may attend and observe the deliberations of the
Board or any committee during such meetings or portion of the meetings. WECC members and
the public may participate during the meeting in the sole discretion of the presiding officer for the
meeting.
Closed Meeting. WECC members and the public may not attend or observe the deliberations of
the Board or committees. The Board or committee may invite particular persons to participate in a
closed meeting where such participation would further the business of the Board or committee.
The Board may also gather in Executive Session. An executive session is not considered a separate
meeting of the Board because the Board takes no action in executive session. WECC members and the
public may not attend or observe the discussions of the Board in executive session. In addition, WECC
staff (including the CEO, as determined by the Chair) will be excused from the executive session except to
the extent necessary to further the Board’s discussion.
During the next open meeting of the Board following a closed meeting or executive session, the Chair shall
provide a high-level synopsis of the discussion and, with respect to a closed meeting, any action the Board
took during the closed meeting or executive session.
9.
Criteria for Holding Closed Meetings and Executive Sessions
A meeting or a portion of a meeting may be closed for purposes described in the WECC Bylaws. The
Board may enter into executive session when, in the opinion of the Chair, it is appropriate to excuse
WECC staff (including the CEO, as determined by the Chair) to encourage candid discussion
regarding Directors, management and personnel matters. It will be the customary practice of the Board to
hold an executive session in conjunction with regularly scheduled meetings. Any Director may request a
closed meeting or executive session.
In accordance with the WECC Bylaws, it is contemplated for all committees established by the Board, that
all meetings shall be considered open meetings. Notwithstanding the foregoing, Board Committees may
meet in closed session in accordance with the Bylaws and their respective Board-approved charters.
10.
Procedures for Meetings
Notice to the public of the dates, places, times and status of meetings of the Board and committees
established by the Board shall be provided in accordance with the WECC Bylaws and the respective
committee charters. WECC will post all non-confidential meeting materials within 24 hours of when such
material is provided to Directors.
The Board will operate in accordance with Roberts Rules of Order, recognizing that the Board may
deviate from the Rules in the interest of efficiency with the consent of a majority of the Directors present.
11.
Minutes of Meetings
The Board, Board committees, standing committees, standing committee executive committees,
subcommittees, task forces and working groups shall each keep and post written, professional minutes of
each meeting. Minutes are generally not kept for executive sessions of the Board; however, any Director
may request that any discussion of the Board be minuted. The Secretary is responsible for the creation and
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maintenance of all minutes. The person assigned to take the minutes for each meeting shall ensure the
draft minutes are thereafter reviewed and approved by the applicable group and provided to the Secretary
in a manner suitable for maintaining as a WECC corporate record.
MATTERS RELATING TO EXECUTIVE MANAGEMENT
12.
Process for Reviewing Conflicts of Interest
Annually, WECC’s General Counsel shall distribute to each Director a copy of WECC’s conflict of
interest policies and a list of the registered entities from the WECC Compliance Registry, together with a
questionnaire that requires the disclosure of potential conflicts of interest. New independent Directors
and employees should complete the questionnaire upon joining WECC. The General Counsel shall
review the completed questionnaires each year and communicate with the individuals involved about any
potential conflicts. Each individual must recuse himself or herself from any particular matter involving
an entity that presents a conflict of interest until such time as the conflict of interest is resolved. The
General Counsel shall report the results of the review of the conflict of interest questionnaires to the
Governance Committee and the Chair. The General Counsel shall provide consultation and advice on
matters of possible conflicts of interest as the occasion warrants.
Except for mementos typically given for a speech, retirement or similar occasion, a Director may not
accept any gift, regardless of monetary value or source, given because of his/her position as a Director of
WECC.
Decision Point: Should the document address gifts to directors?
13.
Relationship of the CEO to the Board
In accordance with the Bylaws, the Board may appoint the CEO to the Board. Directors and the CEO
should at all times maintain a close professional relationship while avoiding a personal relationship that
could lead to or be perceived as causing a conflict of interest regarding the respective roles of the Director
and the CEO; provided however that the CEO is all times free to seek professional development advice and
mentoring from any Director.
14.
Assessment and Compensation of Chief Executive Officer and Other Officers
The HRCC shall complete a performance assessment of the CEO for consideration by the Board. The
annual compensation, including the bonus, of WECC’s CEO shall be determined by the Board, after
review and recommendation by the HRCC and after taking into account the degree to which WECC and
the CEO have achieved established goals. In its deliberations, the HRCC shall make use of market data
as it deems appropriate. The Board Chair and HRCC Chair will communicate the Board’s assessment to
the CEO.
The CEO shall recommend annual compensation, including bonuses, of WECC’s other officers to
the HRCC. The HRCC shall then recommend annual compensation, including bonuses, for each officer to
the Board for approval. The HRCC shall make use of market data as it deems appropriate, and shall also
consider the degree to which WECC and the officer have achieved established goals.
15.
Amendments to these Guidelines
These Governance Guidelines may be amended by the Board from time to time. The Governance
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Committee shall from time to time review these Governance Guidelines and recommend any amendments
to the Board.
Approved by Board of Directors ____________
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