Great results depend on great governance practices.
Strong governance provides a solid foundation for the E&S program by ensuring that there are clear goals, policies, responsibilities, and accountabilities.
Our experience with clients is that those with strong E & S Governance practices almost always get good results while those without, almost never do.
Good governance, at a minimum, requires clarity around three things:
- The goals and objectives for the E & S program;
- The E & S policies that will guide the activities of program participants; and
- The respective responsibilities and accountabilities of program participants.
E & S goals must be very specific in terms of what will be accomplished and by when.
Energy Advantage can assist in setting suitable goals based on its deep industry knowledge and its experience with many other clients. However, at the end of the day, the goals are the client’s and must be based on something that has meaning for the client. Once goals are established, good governance requires the regular tracking of progress against goals.
Clear E & S policies are critical to ensure program participants do not waste time developing projects and proposals that do not meet policies and therefore have no chance of being approved.
E & S policies can relate to a number of different factors including:
- Financial hedging activities relating to energy commodities;
- Required returns for E & S investments; and/or
- General predisposition towards environmental issues.
Even with clear E & S goals and policies, programs will struggle if there is a lack of clear responsibilities and accountabilities around activities relating to the program. Thus, clarity around what needs to be done, who will do it, and who will be accountable if it is not done is critical.