How to Build an Energy Switching Strategy That Your Board Will Approve

Energy procurement is no longer a tick-box task. With costs now board-level concerns, decision-makers are under pressure to demonstrate not just savings but governance, resilience, and alignment with business goals. Here’s how to build a strategy that wins approval upstairs.

For many office administrators and facilities managers, “procurement” used to mean calling three suppliers, comparing quotes, and picking the cheapest. That world is gone. Today, energy sits alongside payroll, raw materials, and logistics as a core budget line. Boards demand not just savings, but visibility, compliance, and predictability. An ad-hoc buying approach won’t cut it. You need a strategy.

Why the board cares about procurement

Boards have three main concerns when it comes to energy:

  • Budget certainty: They want to avoid surprises. A sudden bill spike is harder to explain than a high but predictable cost.
  • Risk management: Energy volatility can wipe out margins. Leaders need assurance that exposure is controlled.
  • Reputation and compliance: ESG reporting and audit trails mean procurement decisions must stand up to external scrutiny.

A strategy that addresses these three drivers speaks directly to the board’s priorities, not just to procurement’s operational needs.

Step 1: Define your objectives

A procurement strategy without objectives is just paperwork. Start by clarifying what your organisation needs from energy contracts:

  • Cost control: Is budget certainty the overriding concern?
  • Opportunity capture: Does leadership want to benefit from market dips?
  • ESG alignment: Should procurement support sustainability or renewable sourcing targets?

These objectives shape whether you pursue fixed, flexible, or forward contracts. They also inform the metrics you’ll report to the board.

Step 2: Map your risk appetite

Boards differ in their tolerance for volatility. Some prefer to lock in costs even at a premium; others will ride the market to chase lower averages. Your job is to make risk explicit so leadership can sign off knowingly.

  • Low risk appetite: Prioritise fixed contracts, detailed forecasts, and clear cost ceilings.
  • Medium risk appetite: Consider hybrids, partial fixed, partial flexible, to balance security with opportunity.
  • High risk appetite: Flexible procurement with in-year buying decisions, requiring market tracking and governance.

By framing procurement as a risk management tool, you elevate the conversation from “what’s cheapest?” to “what aligns with our financial resilience?”

Step 3: Build governance into the process

Procurement strategies succeed or fail based on governance. Without it, decisions look arbitrary; with it, they appear professional and board-ready.

  • Approval frameworks: Define who signs off contracts, and at what thresholds.
  • Documentation: Record supplier comparisons, risk assessments, and rationale for decisions.
  • Audit trail: Ensure every decision can withstand internal and external audit.

Governance makes your strategy defensible — and it gives boards confidence they won’t face awkward questions later.

Step 4: Align with finance and operations

Energy procurement doesn’t exist in isolation. Finance cares about budget predictability; operations care about supply continuity. A winning strategy must address both:

  • Finance alignment: Present procurement decisions in terms of budget stability, variance reduction, and long-term planning.
  • Operational alignment: Ensure contracts fit operational realities – e.g., seasonal demand, new sites, or expansion plans.

When you frame procurement as an enabler of wider business goals, it stops looking like a cost centre and starts looking like a strategic tool.

Step 5: Scenario planning and stress tests

Boards don’t just want a plan, they want proof you’ve considered the “what ifs.” Scenario planning shows you’ve stress-tested procurement options under different conditions:

  • Price surge: What if wholesale costs rise 40% in 12 months?
  • Demand shift: What if operations expand or contract unexpectedly?
  • Regulatory change: How does the MHHS Programme affect your cost exposure?

By running these scenarios, you equip the board to make informed, confident approvals and avoid buyer’s remorse later.

Step 6: Communication that wins sign-off

Boards don’t want jargon or wholesale charts. They want clarity. Package your strategy in a way that speaks their language:

  • Executive summary: Two pages max: objectives, approach, expected outcomes.
  • Financial impact: Budget forecasts, variance bands, cost certainty.
  • Risk statement: Plain English explanation of exposure and mitigation.
  • Next steps: Clear procurement timeline and decision points.

When the board sees a structured, risk-aware, financially grounded strategy, approval is far easier to secure.

Avoiding common pitfalls

Even well-prepared strategies can stumble. Watch out for these traps:

  • Focusing only on price: Ignoring risk, governance, and supplier terms undermines credibility.
  • Overcomplicating the presentation: Boards don’t want technical detail; they want actionable clarity.
  • Forgetting cost leakage: Overlooking hidden charges and penalties erodes savings (see more here).

Final thought: strategy as reassurance

Tariff procurement is no longer about chasing discounts, it’s about proving to your board that costs are under control, risks are managed, and governance is solid. A clear, documented strategy does more than secure energy: it secures confidence, reputation, and resilience.

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