Market Indicator: The Chief Energy Hedging Officer's Litmus Test

Can your Chief Energy Hedging Officer (most likely known as your CEO, president, owner, CFO or board of directors, among others) do the following?

• Develop, execute and manage a sound hedging program based on a thorough understanding of your company's needs and risk tolerance?
• Accurately define your company's hedging goals and objectives and turn said goals and objectives into a proper energy risk management policy?
• Assess the company's hedge position(s) relative to your defined goals and objectives and realign it if your position is off-course?
• Create and modify your hedging objective(s) for the next quarter, the next year, and the next three years as well as determining the most appropriate success benchmarks?
• Take responsibility for not only ensuring that you are utilizing a solid energy hedging strategy(s) but also ensuring that the strategy is being properly executed?
• Ensure that you are receiving the best possible prices from your bank, broker or marketer?
• Stay up to date regarding "new" hedging instruments (i.e. Clearport products) and strategies as well as best practices?
• Understand the accounting implications of your hedging strategies?
• Accurately and efficiently explain your hedging strategies and positions to your owners, shareholders, management, board of directors, and/or auditors?

Here's your scorecard:

9 Out of 9: Perfectly suited as a Chief Energy Hedging Officer. Now, go execute.

8 Out of 9: Ready to take the reins but be sure you have the right team to help you deliver winning results.

7 Out of 9: One more skill-set and you'll be ready to lead.

6 Out of 9: On the right track. Close your skill gaps (i.e. attend an energy hedging seminars) then, apply them.

Less than 6: It's time to bring in an energy hedging expert.

What's your score?  What are you doing to improve your hedging expertise?