Forum for Science, Industry and Business

Sponsored by:     3M 
Search our Site:


Market forces in utilities industries benefit company and not society

Liberalised companies in the utilities sector are expected both to earn profits, and to take the interests of the public to heart, such as by ensuring reliable and affordable power or by providing rail services with high on-time rates.

Recent discussions with regard to top salaries in the energy sector and the privatisation of Schiphol Airport indicate that politicians, as well as average citizens, are concerned about these seemingly conflicting interests. In her inaugural address as professor of Law and Infrastructures at TU Delft, Prof. Helen Stout asserts that market forces nor legislation is satisfactory. “Public interests can best be safeguarded in utilities industries by strengthening the desired standards and values within companies and organisations.” Prof. Stout is scheduled to deliver her address on Friday 21 September.

Market forces can, in the liberalised utilities industries such as the telecom, electricity, gas and public transport branches, endanger the interests of the public. A realistic concern. Nowadays, the overcapacity on the electric power system ensures that the chance of a power failure is very small. But just who looks after the interests of the public if privatised utility companies decide to cut down on overcapacity?

Market forces are, therefore, according to Helen Stout, insufficient motivation to encourage companies to take responsibility for public values. In Prof. Stout’s opinion, legislation and rules are also ineffective. Stout: “A system of licences, such as is now the case in the railway industry, completely negates the benefits of liberalisation. The price and quality of rail services are not achieved in the give and take between supply and demand, but rather is decided unilaterally by one side.” In her speech, Stout calls for the institutionalisation of public interests in the company itself.

According to Stout, institutional anchoring can be achieved on three levels: the executive board, the board of commissioners and the shareholders meeting. In her opinion, the inspiration for this can be drawn from the Corporate Governance Code of the Tabaksblatt Commission of 2003. Concrete examples include the requirement for the board of directors to report their compliance with this type of code in its annual report; the creation of a permanent consultation circuit with representatives from government, users and social organisations; a “broad” base profile, laid down by statute, of a member of the board of commissioners; and permitting social organisations to own stocks.

All of this, Stout says, can be implemented without the need for additional legislation. Stout is optimistic about the possibilities of changing the culture within companies. “To an increasing degree, businesses are starting to describe themselves as entities that are both aware of, and dare to take, their social responsibilities. Rein Willems, CEO of Shell Netherlands, expressed a similar sentiment recently in the NRC Handelsblad, saying: “Life is about more than simply earning a living.”

Maarten van der Sanden | alfa
Further information:

More articles from Business and Finance:

nachricht Blockchain Set to Transform the Financial Services Market
28.09.2016 | HHL Leipzig Graduate School of Management

nachricht Paper or plastic?
08.07.2016 | University of Toronto

All articles from Business and Finance >>>

The most recent press releases about innovation >>>

Die letzten 5 Focus-News des innovations-reports im Überblick:

Im Focus: Etching Microstructures with Lasers

Ultrafast lasers have introduced new possibilities in engraving ultrafine structures, and scientists are now also investigating how to use them to etch microstructures into thin glass. There are possible applications in analytics (lab on a chip) and especially in electronics and the consumer sector, where great interest has been shown.

This new method was born of a surprising phenomenon: irradiating glass in a particular way with an ultrafast laser has the effect of making the glass up to a...

Im Focus: Light-driven atomic rotations excite magnetic waves

Terahertz excitation of selected crystal vibrations leads to an effective magnetic field that drives coherent spin motion

Controlling functional properties by light is one of the grand goals in modern condensed matter physics and materials science. A new study now demonstrates how...

Im Focus: New 3-D wiring technique brings scalable quantum computers closer to reality

Researchers from the Institute for Quantum Computing (IQC) at the University of Waterloo led the development of a new extensible wiring technique capable of controlling superconducting quantum bits, representing a significant step towards to the realization of a scalable quantum computer.

"The quantum socket is a wiring method that uses three-dimensional wires based on spring-loaded pins to address individual qubits," said Jeremy Béjanin, a PhD...

Im Focus: Scientists develop a semiconductor nanocomposite material that moves in response to light

In a paper in Scientific Reports, a research team at Worcester Polytechnic Institute describes a novel light-activated phenomenon that could become the basis for applications as diverse as microscopic robotic grippers and more efficient solar cells.

A research team at Worcester Polytechnic Institute (WPI) has developed a revolutionary, light-activated semiconductor nanocomposite material that can be used...

Im Focus: Diamonds aren't forever: Sandia, Harvard team create first quantum computer bridge

By forcefully embedding two silicon atoms in a diamond matrix, Sandia researchers have demonstrated for the first time on a single chip all the components needed to create a quantum bridge to link quantum computers together.

"People have already built small quantum computers," says Sandia researcher Ryan Camacho. "Maybe the first useful one won't be a single giant quantum computer...

All Focus news of the innovation-report >>>



Event News

#IC2S2: When Social Science meets Computer Science - GESIS will host the IC2S2 conference 2017

14.10.2016 | Event News

Agricultural Trade Developments and Potentials in Central Asia and the South Caucasus

14.10.2016 | Event News

World Health Summit – Day Three: A Call to Action

12.10.2016 | Event News

Latest News

How nanoscience will improve our health and lives in the coming years

27.10.2016 | Materials Sciences

OU-led team discovers rare, newborn tri-star system using ALMA

27.10.2016 | Physics and Astronomy

'Neighbor maps' reveal the genome's 3-D shape

27.10.2016 | Life Sciences

More VideoLinks >>>