Good for the goose
It’s no news by now that Duke Energy Corp (NYSE:DUK) stock is in new hands. The utility’s announcement last week put a face to Duke’s new leadership as Chairman and CEO Jim Rogers transitions out of his current positions. Ideally, Rogers’ exit will put an end to bad blood between regulators and utility. Sour relationships went bitterly bad when, during a massive 2012 merger, Rogers ended up continuing to lead Duke after Progress’ CEO was poised to take over.
Now, with current CFO Lynn Good behind the corporate steering wheel, shareholders can hope that regulators will play nice on future rate requests, unlike this month’s 50% haircut.
The real celebration
Utilities like Duke Energy Corp (NYSE:DUK) rely heavily on good relationships with regulators to ensure sustainable profits, and Good’s election will hopefully bring in a new era of positivity. But there’s a new reason to celebrate Duke Energy’s recent leadership transition.
The utility announced this week that it has elected lead director Ann Gray to serve as its new chair when Rogers steps down in December. Gray has a nearly 20-year history with Duke Energy, and her institutional knowledge will undoubtedly help during Rogers’ transition out and Good’s transition up.
But more important than any qualifications or past experience, this latest announcement brings something else, something absolutely essential, to Duke’s board: leadership diversity. While Jim Rogers held the positions of CEO, president, and chair, this latest announcement officially splits those three positions among two separate individuals. For strategic-level thinking, a diversity of opinion is absolutely essential to creating a progressive company, and Duke Energy Corp (NYSE:DUK) stock is gearing up to do just that.
Join the crowd
Duke’s latest move might seem innovative, but it’s really behind the times. Exelon Corporation (NYSE:EXC)‘s board includes Chair Mayo Shattuck and President and CEO Chris Cane. Exelon Corporation (NYSE:EXC) also underwent a major merger in 2012, and Mayo was added to Exelon Corporation (NYSE:EXC)’s board from his previous position as chair, president, and CEO of Constellation Energy. Similar to Duke Energy Corp (NYSE:DUK)’s Lynn Good, Cane made his way up from COO, and has worked in the nuclear industry for 30 years.
Atlantic Power Corp (NYSE:AT)‘s chair, Irving Gerstein, comes as an outsider to the utilities industry. But what he lacks in energy history, he makes up in corporate and political wherewithal. With a medical background, Gerstein has served on more than half a dozen other boards — and has been a Canadian senator since 2008.
Barry Welch has served as Atlantic Power Corp (NYSE:AT)’s president and CEO for almost 10 years and comes from a financial background. With Atlantic’s “growth by acquisition” strategy, his longer history and investing knowledge make him a seemingly sensible choice.
Don’t be bored with boards
While it’s easy for investors to look beyond boards at on-the-ground operations, these corporate bodies are essential to a company’s long-term success. Duke’s newly diversified board paves the way for new ideas, different opinions, and creative conflict, in general. With Rogers out of the hot seats, Duke Energy Corp (NYSE:DUK) stock is another step closer to sustainable profits.
The article 1 Sign Duke Energy Stock Is Headed Higher originally appeared on Fool.com and is written by Justin Loiseau.
Fool contributor Justin Loiseau has no position in any stocks mentioned, but he does use electricity. You can follow him on Twitter, @TMFJLo, and on Motley Fool CAPS, @TMFJLo.The Motley Fool recommends Exelon.
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