Specifically, in the first half of 2008, a Texas based group brought a class action alleging the following: excessive director compensation in the form of salary, benefits, bonuses, and retirement funding, lavish spending on company credit cards, and questionable spending conduct by Board officials.

Although the final legal status has not been fully resolved, actions to date have resulted in the resignation of both senior executives and Board Members as well as the repayment of several million dollars back to the electric cooperative.

It seems that the owner/members of electric coops are aggressively standing up for their rights and scrutinizing more closely the conduct of their appointed and elected leaders. The status quo, has been put on notice.

Electric co-ops are unique entities that exist to serve the core principles of member ownership - involvement and control. As a result of several recent high-profile Electric co-op Board related scandals, election and governance practices have come under increased scrutiny, as they will be for all co-ops.

In the current environment, some Electric co-op boards are perceived to perform "rubber stamp," or uncontested elections, in essence, continually electing themselves by proxy and voter participation levels are generally less than optimal.

Since many Electric co-ops site these core principles when defending their special status, it would, perhaps, be appropriate for those same Electric co-ops to examine how well they adhere to these principles as they relate to their own board election practices.

The need to uphold Electric co-ops' core principles, in addition to challenges from owners and competitors, are motivating many in the industry to take a fresh look at their entire election process.

Allow me to bring this issue into sharper focus. In a recent national survey of Electric co-ops, undertaken by the National CO-OP Board Association, (NCBA), several critical issues regarding nominations, elections, and term limits for Electric co-op directors surfaced. The NCBA survey results are clearly a wake-up call for all co-op boards, particularly in light of recent events.

Let us take a look at some facts relating to Electric co-op board elections. The survey indicated that almost 80% of Electric co-ops use nominating committees; of the responding co-ops, 67% indicated that their boards selected nominating committee members; 26% reported their Board Chairman selected board nominees!

These practices most certainly raise valid concerns as to whether some Electric co-op's election practices perpetuate their board's current composition.

The survey further revealed elections were contested "always" or "most of the time" among less than 28% of responding Electric co-ops. Board elections were contested "never" or "rarely" in 44% of Electric co-ops. On the topic of term limits, an astounding 85% of responding Electric co-ops reported they had no consecutive term limits!

The dearth of Electric co-op board term limits raises significant concerns. Specifically, in today's dynamic demographic environment, how can Electric co-op boards expect to reflect the changing face of their membership without tapping the wisdom of their dedicated, experienced volunteers?

To the outside observer, these Electric co-op election survey results seem indicative of a tinhorn dictatorship rather than democratic membership involvement, ownership and control.

Let me be clear that we would be the first to acknowledge that there are very real challenges when it comes to tapping and keeping qualified directors with the time and talent to serve. Our experience is that a professionally run election and nominating processes will attract a more robust board gene pool that will be more fully reflective of an Electric co-op's constituents.

A healthy organization will have an open nominating process, contested elections and term limit policies. Of course Electric co-ops current nomination, election, and terms of service practices need to be critically evaluated through the lens of political reality and revenue demands. However, the need to uphold an Electric co-op's basic democratic principles of membership involvement, ownership and control should be honored.

Many of the country's Electric co-ops, large and small, have found interesting solutions to these election concerns. Some have turned to independent, outsourced elections services providers, which encourages more qualified candidates to run for director positions.

Additionally, while observing specific organizational voting rules, the use of both paper and electronic balloting, results in an overall increase in voter participation, often at a reduced cost. Outsourcing election processes can results in boards more broadly reflecting membership demographic.

And, finally, Electric co-op staffs are relieved of onerous cost and staffing burdens associated with managing elections while increasing election participation

Through a more balanced and robust election process, questions regarding Electric co-ops board nominations, elections, and term limits can be effectively addressed.

Richard W. Taylor, Jr. is Chairman of Elections Services Corporation, Long Island, New York.

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