Danish Think Tank Brundtland has mapped 262 municipally owned utility companies within water, heating, and waste management, along with their 1,994 board members. The analysis documents a generally high level of competence across the boards.
Original article by Flemming Linnebjerg Rasmussen, Danish District Heating Association
For the first time, the composition and competencies of all municipally owned utility companies in Denmark have been comprehensively analysed and mapped. The study, conducted by Think Tank Brundtland, concludes that, overall, the municipal utility sector is governed by competent boards.
Four out of five board members have professional experience from particularly relevant industries, three out of four have management experience, and half hold educational backgrounds within specialist areas of direct relevance to the utility sector.
Beyond their management experience, the mapping also shows that board members generally have a relatively high level of education. Significantly more board members in municipal utilities hold long-cycle and medium-cycle higher education degrees compared to board members in the wider private sector.
In other words, the analysis shows that board members in municipally owned utility companies largely possess the competencies required to fulfil their supervisory and leadership roles as described in the Code of Good Corporate Governance for Municipal Utility Companies.
Overall, the study demonstrates that the boards are built on a solid foundation of management experience, industry insight, and educational strength. At the same time, it highlights the need for utilities to pay increased attention to strengthening continuity, experience levels, and digital competencies if boards are to be fully equipped to lead the sector through the major transformations ahead.
Widespread skepticism put to rest
This conclusion contrasts with the common public perception of municipally appointed boards, which has often been marked by skepticism regarding their composition. With effect from next year, the Danish Parliament has decided that municipal district heating companies must appoint two external board members. A similar model is currently being discussed for water utilities in the national Water Regulation Committee, which published its first report in June.
The Danish Chamber of Commerce (Dansk Erhverv) has even proposed banning municipal politicians from serving on boards of municipally owned district heating companies.
“We must conclude that the competence level appears quite strong. Until now, proposals, legislation, and the public debate have largely been based on gut feelings. Now we have a solid knowledge base, and I hope the discussion about whether owners should be represented in the boardroom will stop. Not only may they be – they must be,” says Maj Baltzarsen, Deputy Director at Brundtland.
Key findings from the analysis
- 76% have management experience. On average, those with leadership backgrounds have held five different management roles, indicating long-term leadership experience.
- Board members hold an average of 6.4 active board positions. 45% of these are within the utility sector, and 16% within finance, law, and strategy, contributing broad networks and perspectives.
- 50% have education within particularly relevant specialist areas, and board members generally have a high level of education.
- 81% have professional experience from industries especially relevant to the utility sector.
This article is translated from Danish. The original was published by the Danish District Heating Association.
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