Strategic Planning and Governance Flashcards

A utility is facing pressure from both regulators and customers to reduce rates while maintaining service quality. Which strategic planning approach best addresses this tension?

Answer: Conduct a comprehensive efficiency review to identify cost reductions that preserve service quality without sacrificing sustainability

A comprehensive efficiency review identifies sustainable cost reductions without compromising service, balancing regulatory, customer, and financial pressures simultaneously.

What is the primary function of an independent financial audit in utility governance?

Answer: To provide an objective assessment of the accuracy and completeness of the utility's financial statements

An independent financial audit provides an objective, third-party opinion on whether financial statements fairly represent the utility's financial position, supporting board oversight and public accountability.

In a strategic planning retreat, stakeholders disagree on whether to prioritize growth or reliability. Which facilitation technique best helps reach consensus?

Answer: Using structured prioritization tools such as multi-voting or weighted criteria matrices

Structured prioritization tools like multi-voting or weighted criteria matrices give all stakeholders a voice while systematically narrowing options to reach a defensible group decision.

Which metric is most useful for measuring a utility's progress toward long-term financial sustainability?

Answer: Debt service coverage ratio (DSCR) over a multi-year trend

The debt service coverage ratio tracked over multiple years reveals whether the utility generates sufficient revenue to meet its debt obligations, a core indicator of long-term financial health.

A utility adopts a 'utility of the future' vision in its strategic plan. Which capability is most central to realizing this vision?

Answer: Integrating data analytics, smart infrastructure, and customer engagement platforms to enable adaptive operations

A utility of the future vision centers on integrating data analytics, smart infrastructure, and digital customer engagement to enable proactive, adaptive, and efficient utility management.

When a utility's strategic plan is updated, which stakeholder group should be formally engaged through a structured process?

Answer: Board members, management, employees, customers, and regulators as appropriate

Effective strategic planning engages a broad set of stakeholders — board, staff, customers, and regulators — because their input improves plan quality and increases buy-in for implementation.

What does 'policy governance' (Carver model) emphasize for utility boards?

Answer: The board should focus on defining ends (outcomes) and executive limitations, delegating all means to the CEO

The Carver policy governance model directs boards to define desired outcomes (Ends) and set boundaries on management behavior (Executive Limitations), leaving the means of achieving outcomes to the CEO.