By Rich Heidorn Jr.
MILWAUKEE — MISO’s Board of Directors will generally be limited to three three-year terms, while the board chairman will be allowed to hold the gavel for a maximum of five years, under rule changes approved amid much gnashing of teeth last week.
The three-term limit comes with a caveat: Directors may petition for a waiver allowing a single additional term upon the determinations by the board and the Corporate Governance & Strategic Planning Committee “that a director’s continued service is necessary to retain his or her skills or expertise, to maintain geographic or other diversity of the board, or is otherwise in the best interest of” MISO.
The board rejected setting an age limit, accepting the Corporate Governance Committee’s position that “directors should be evaluated on their knowledge, skills and engagement, rather than an arbitrary limitation based on age.”
The five-year maximum for the chairman is up from the current two-year limit. That would allow Walsh, who was elected to a second one-year term for 2016, a longer tenure.
The board tabled action on a proposal to expand the Nominating Committee — currently three directors and two stakeholders — to add more stakeholder representatives. It will consider the expansion again in October, when they said they would have the benefit of the stakeholder governance discussions. (See related story, MISO Straw Man: Eliminate 10 of 27 Committees.)
The term limits vote was unanimous, although Director Mike Evans expressed misgivings, saying the board was getting sufficient turnover without the rule. “At some time in the future I’m going to say, ‘Why in the blazes did we do that?’” he said.
Director Paul Feldman objected to the fourth-term waiver, saying it was inconsistent with term limits and could create a “nasty dynamic” among board members. “Everyone is replaceable,” he said.
Director Thomas Rainwater said he supported the term limit, citing research suggesting directors are no longer independent after about 11 years.
But Director Mike Curran joined Evans in expressing unease, recalling a discussion with Howard Schneider, who has chaired PJM’s Board of Managers since its formation as an independent panel in 1997. “‘Why are you guys doing this to yourself?’” Curran said Schneider asked him after hearing that MISO was considering limits.
“A four-[term] limit would clear the decks at PJM,” joked Feldman.
Actually, PJM adopted both term and age limits in May. Directors will be ineligible for re-election once they either turn 75 or have served five terms. (See New PJM Board Member Elected, Re-election Eligibility Changed.)
The PJM board’s action was announced at the RTO’s Annual Meeting in Atlantic City, N.J., without any explanation — let alone the public debate that the MISO board engaged in before voting. Unlike MISO, PJM’s board does not meet in public.
