NRG Energy’s award for best corporate governance team of the year (large cap) was largely in recognition of its ability to handle many complex transactions during the past year, including the IPO of one of its business units, while keeping its business running smoothly.
With the IPO in July 2013, NRG became two separate public companies: NRG Energy and NRG Yield. A small team comprising deputy general counsel and corporate secretary Brian Curci, two other lawyers and a few paralegals handles all the public company transactions, including corporate M&A deals, corporate finance and securities filings, for both companies.
Because of Curci’s past transactional experience, his role is much more wide-ranging than the typical corporate secretary’s task of liaison with the board of directors in co-ordinating all board matters. ‘I’m fully embedded with senior management and often lead major transactions and financings,’ says Curci. ‘It’s a jack-of-all-trades position, which makes it more interesting. When dealing with board issues, it all flows through. If you’re also managing board processes and governance issues, it’s much easier to have your mind on the right matters as it relates to those issues.’
NRG Energy has nearly 1,000 subsidiaries, twice as many as the number it had roughly two years ago. Even so, the company’s governance function runs very efficiently, and Curci believes his cross-functional responsibilities facilitate this. He adds that his priority is to protect the board, but he also believes that to be effective as a corporate secretary and properly monitor corporate issues requires knowing the company strategy and understanding what it is trying to accomplish and the right ways to do it. ‘It’s easier then to get in front of governance issues,’ he notes.
The business thesis for the NRG Yield IPO was based on NRG’s belief that it wasn’t receiving enough value for certain power generation assets. The spin-off created a lower cost of capital for the NRG family of companies that enables them to bid more aggressively for acquisitions, Curci explains. ‘Internally, we knew we could get value out of these assets that other companies couldn’t. We get the benefit of share price appreciation from being a public company, but growth in the dividend that ultimately goes back to NRG.’
As a company that buys assets from the parent and with a board of seven members, four of whom also serve on NRG Energy’s board, NRG Yield will have conflict issues to deal with, such as those regarding related-party transactions between the two firms, Curci says. His team has made sure corporate disclosures tell shareholders how the relationship will work, including the valuing of all the parent company’s assets on an arm’s-length basis before any are sold to NRG Yield. That will require a review by the three independent directors on NRG Yield’s board.
For photos of the awards, click here.