In the debate reported in recent days in the media between Sophie Brochu, CEO of Hydro-Québec and Pierre Fitzgibbon, appointed Minister of Economy, Innovation and Energy on Thursday, it is curious to note that the company’s board of directors seems to be absent.
It is possible, and almost certain, that he was consulted, and it is likely that the CEO relies on his opinion. But that the media absolutely does not evoke the council, here is what is revealing and brings us in the classic film of the opposition between the main shareholder of a company and its CEO We know the end; the latter is usually thanked.
The substance of the debate, in the present case, is far from trivial: the needs to achieve carbon neutrality by 2050 are 100 TWh, while the industrial projects supported by Mr. Fitzgibbon require 15 TWh more. Choices have to be made and deserve an informed, rigorous debate concerning all of the impacts, advantages and disadvantages of the components of Hydro-Québec’s future strategy.
We do not wish to address this analysis here, but rather to emphasize that it is within the board of directors that this analysis must be carried out serenely, and not in the tumult of a mediatized fight.
The current Hydro-Québec board does not appear to us to be constituted to ensure a substantive debate where all the stakeholders would bring their point of view, according to a model that is emerging in the contemporary world and which comes under what is commonly called “the stakeholder capitalism” instead of shareholder capitalism.
This new vision of governance is based on the fact that capital is no longer the only factor in a company’s success. A company’s results today depend first on talent, then on capital, and finally on aligning its interests with those of its ecosystem.
Comprised of 17 people, 15 of whom are independent and undoubtedly competent but essentially from the private sector, Hydro-Québec’s board of directors has only one director representing the state shareholder, in this case the Deputy Minister of the Department of Energy.
Why not have a board that reflects Hydro-Québec’s stakeholders: a few directors representing the state as shareholder (with, why not, a few elected officials from key regions), a few directors representing employees, a few directors representing users and citizens (consumers, SMEs, etc.) and, finally, suppliers?
In the new economy taking shape all over the world, particularly in what the Americans call the Purpose Economy, the board defines the “raison d’être” of the company; he is its guardian and oversees its integration into the strategy. But the raison d’être, beyond the classic mission of serving customers, defines the usefulness of the company with regard to society.
In this perspective, Hydro-Québec would quickly make the link with its DNA, namely the development of Quebec as Adélard Godbout and René Lévesque had imagined it, but by adding to it today the imperative decarbonization of our economy.
The board would also have to define Hydro-Québec’s dividend policy each year after ensuring that the profits go first and foremost to financing investments… which promise to be colossal. We would obviously change the situation — 75% of the profits are automatically given to the State shareholder — which surprises, by its generosity, its “gluttony” one should say, because the greediest financiers on Wall Street (companies listed in the most generous stock market) distribute only 40 to 50% of their profits. This would no doubt prevent this drain on profits from inevitably leading to an increase in electricity tariffs, the required investments not being able to be self-financed from profits, but financed, alas, to a large extent by price increases. .
It is with a “new ca” that Hydro-Québec could and should, in our opinion, approach this gigantic new phase of its development. Hydro-Québec can also be an example for all businesses in Québec: to be the leader of a humanist economy, fully responsible to future generations, at the service of humans and nature, and no longer ‘reverse !