UMC Strategic Planning and Governance 2 — Questions and Answers
Question 1: Which governance framework element ensures utility board members understand their fiduciary responsibilities?
- Operational audits
- Board orientation and education programs (Correct answer)
- Rate case filings
- Capital improvement scheduling
Correct answer: Board orientation and education programs
Board orientation and education programs are the primary mechanism for ensuring board members understand their fiduciary duties to the utility and its customers.
Question 2: A utility's SWOT analysis reveals that aging infrastructure is a significant weakness. Which strategic response best addresses this finding?
- Increase customer service staffing
- Develop a long-term asset management plan with capital reinvestment schedules (Correct answer)
- Reduce operating expenses immediately
- Expand service territory boundaries
Correct answer: Develop a long-term asset management plan with capital reinvestment schedules
An asset management plan with capital reinvestment schedules directly addresses infrastructure weakness by providing a structured approach to renewal and replacement.
Question 3: In strategic planning, what does a 'theory of change' document primarily describe?
- The utility's rate structure adjustments over time
- How planned interventions will lead to desired long-term outcomes (Correct answer)
- Regulatory compliance timelines
- Engineering design standards for new facilities
Correct answer: How planned interventions will lead to desired long-term outcomes
A theory of change describes the causal logic connecting planned activities and outputs to the intended long-term outcomes the utility seeks to achieve.
Question 4: Which of the following best describes 'strategic alignment' in a utility context?
- Matching employee schedules to peak demand periods
- Ensuring all departmental goals and initiatives support the overarching utility mission and strategic objectives (Correct answer)
- Aligning pipe sizes with hydraulic model projections
- Coordinating billing cycles with fiscal year reporting
Correct answer: Ensuring all departmental goals and initiatives support the overarching utility mission and strategic objectives
Strategic alignment means every department's goals, budgets, and projects are directly linked to and supportive of the utility's overall strategic plan.
Question 5: A utility board is considering a major service expansion. What governance step should precede the final vote?
- Immediate construction procurement
- Independent feasibility study and public comment period (Correct answer)
- Hiring additional field crews
- Revising the utility's mission statement
Correct answer: Independent feasibility study and public comment period
An independent feasibility study and public comment period provide the board with objective analysis and stakeholder input before committing to major capital decisions.
Question 6: Which performance measurement approach links financial metrics, customer metrics, internal processes, and learning to strategic objectives?
- Gantt chart methodology
- Balanced Scorecard (Correct answer)
- Critical Path Method
- Monte Carlo simulation
Correct answer: Balanced Scorecard
The Balanced Scorecard integrates financial, customer, internal process, and learning/growth perspectives to give a comprehensive view of organizational performance relative to strategy.
Question 7: What is the primary purpose of a utility's strategic risk register?
- To list all approved vendors for procurement
- To document identified risks, their likelihood, impact, and assigned mitigation owners (Correct answer)
- To record customer complaints by category
- To track employee safety incidents
Correct answer: To document identified risks, their likelihood, impact, and assigned mitigation owners
A strategic risk register systematically documents risks with their probability and impact ratings and assigns accountability for mitigation actions to specific owners.
UMC Strategic Planning and Governance 2
Which governance framework element ensures utility board members understand their fiduciary responsibilities?