It is unfortunate, but necessary, to explain some of the details and events which led to the termination of board members Kelleen Potter and Heidi Franco. I do not wish to publicly humiliate these individuals, but it is important that the public understand the incompetence and breach of fiduciary duties that occurred, making the release of these board members necessary.
Let me give a little background on the situation to help you better understand what occurred. As per the organizational agreement for the Heber Light & Power Company, the Heber City board member representatives are there only under the direct appointment of the Heber City Mayor. The Mayor can remove his appointees at any time, for any reason and at his discretion. Board members are not elected nor is the city council’s consent to the Mayor’s appointees on the Heber Light & Power board required. Appointed board members are completely under the direction of the Mayor, he is their boss. There are six members of the Heber Light & Power Board. These six board members work together to resolve issues within the company. The Board as a whole determines what action the company will take and which policies will be changed.
As more information regarding the problems at Heber Light & Power came to light, Ms. Potter and Ms. Franco took it upon themselves to give a presentation to a local association without the knowledge or consent of the other board members. Sadly, a number of the statements they made in this presentation about Heber Light & Power were inflammatory, misleading, and even false. This unilateral action defamed the board and created unnecessary and damaging chaos, confusion, and distrust between Heber Light & Power employees and the public. This action alone was enough reason for the Heber Light & Power Board to dismiss Board Members Potter and Franco. They had no apparent or expressed or implied authority as board members to represent the company or the board. The unauthorized presentation of inaccurate information was a violation of their fiduciary duties as members of the Board of Directors of Heber Light & Power. It also became a great stumbling block in our efforts to clean up and resolve the myriad issues Heber Light & Power was facing.
When I took the seat as chairman of the Heber Light & Power Board, the new board inherited a number of problems that had to be dealt with including: embezzlement from an employee, previous board members giving themselves unwarranted and unlawful pay increases, poor company management, and deep feelings of public mistrust for Heber Light & Power employees. I had hoped that Ms. Potter and Ms. Franco would work with other board members to resolve the issues plaguing Heber Light & Power. However, when it became clear that Ms. Potter and Ms. Franco were adding to the problems and animosity at Heber Light & Power and jeopardizing company stability and viability with their improper conduct, action had to be taken.
One of the Mayoral board members made this statement about their misconduct as a board member,“ Because of your presumptive actions, you have brought discredit to your fellow board members in the eyes of Company employees. As for myself I ask you to write an open letter to these employees letting them know that your approach as a Board Director is not necessarily shared by other Directors.”
The Heber Light & Power board called a special board meeting to deal with their improper conduct as board members and address why they were making such statements about the employees and management, misrepresenting the Heber Light & Power board in the process. Although Franco and Potter created this new problem, they refused to take responsibility and never showed up to the meeting to face the employees, management, or the board for the crisis they had created.
Although board members are free and even encouraged to share their opinions and thoughts as various issues are worked through, the belligerent and condescending way in which board members Potter and Franco addressed Heber Light & Power staff and fellow board members created stifling contention. It seemed their sharp comments were intended to belittle and to score political points rather than to aid in the healing and rebuilding process needed to restore the company. They repeatedly sought to publicly humiliate employees through insults and by challenging their knowledge and abilities in daily operations. This hostile behavior made them dysfunctional board members.
Anyone who has ever run a business understands how important it is keep the morale of your employees high. Ms. Potter and Ms. Franco failed to realize that morale has a tremendous impact on how well your company runs, and can have a major impact on your productivity, ability to retain talent, and your bottom line. Ultimately, if we do not have employees to run the company efficiently, we cannot produce the necessary power for the valley. Their inability to communicate with the employees in an effective and professional manner seriously damaged employee morale. Their comments were so offensive and inflammatory that employees asked for a special meeting to discuss what Franco and Potter had been saying on the internet about their jobs, their wages, and their benefits. I called a special company meeting with employees, management, and all board members. Again, Potter and Franco never came to the meeting to address the issues the employees had with them.
The definition of and expectations associated with a closed meeting are common knowledge, when you come out of the meeting you are under oath not to talk about what went on there. If you do speak of what occurred in the closed meeting it is considered a breach of your fiduciary duties. The board had been in a number of closed meetings reviewing the lawsuit pertaining to the CFO’s embezzlement. Board members were specifically told not to talk to the news media about what occurred in these meetings to prevent further damage to the company while data was still being analyzed to determine the best course of action. However, the Tribune newspaper came asking board members to talk about the case. Staying faithful to the oath they had made, no one disclosed anything, with the exception of Board Member Franco. She broke her oath and disclosed some of what the company was doing to the newspaper. This was another of many code of conduct and ethics violations that were violated. Leaking out closed meeting information is irresponsible and inappropriate and grounds to fire the board member for breach of their fiduciary duties as a Heber Light & Power Board member.
When Board members allow personal and political agendas to cloud their decision-making, and continually propose moves that benefit them personally or politically, but endanger the viability of the company, the image of the company is compromised. Both Franco and Potter had multiple breaches of their fiduciary duties which compromised the company publicly.
Finally, as a result of their reckless and incompetent behavior, I had numerous requests to terminate Ms. Potter and Ms. Franco. The other board members requested that they be released from the board, employees of Heber Light & Power sent me a written letter requesting that they be released from the board, and other members of the city council asked that they be removed. My decision to finally release them from the Heber Light & Power board was supported by the board, the employees, and other city council members. Unfortunately, the list above were just a few of their fiduciary responsibility violations.