Forum for Science, Industry and Business

Sponsored by:     3M 
Search our Site:

 

Market forces in utilities industries benefit company and not society

24.09.2007
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:
http://www.tudelft.nl

More articles from Business and Finance:

nachricht Corporate coworking as a driver of innovation
22.11.2017 | Fraunhofer-Institut für Arbeitswirtschaft und Organisation IAO

nachricht Mathematical confirmation: Rewiring financial networks reduces systemic risk
22.06.2017 | International Institute for Applied Systems Analysis (IIASA)

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: Towards data storage at the single molecule level

The miniaturization of the current technology of storage media is hindered by fundamental limits of quantum mechanics. A new approach consists in using so-called spin-crossover molecules as the smallest possible storage unit. Similar to normal hard drives, these special molecules can save information via their magnetic state. A research team from Kiel University has now managed to successfully place a new class of spin-crossover molecules onto a surface and to improve the molecule’s storage capacity. The storage density of conventional hard drives could therefore theoretically be increased by more than one hundred fold. The study has been published in the scientific journal Nano Letters.

Over the past few years, the building blocks of storage media have gotten ever smaller. But further miniaturization of the current technology is hindered by...

Im Focus: Successful Mechanical Testing of Nanowires

With innovative experiments, researchers at the Helmholtz-Zentrums Geesthacht and the Technical University Hamburg unravel why tiny metallic structures are extremely strong

Light-weight and simultaneously strong – porous metallic nanomaterials promise interesting applications as, for instance, for future aeroplanes with enhanced...

Im Focus: Virtual Reality for Bacteria

An interdisciplinary group of researchers interfaced individual bacteria with a computer to build a hybrid bio-digital circuit - Study published in Nature Communications

Scientists at the Institute of Science and Technology Austria (IST Austria) have managed to control the behavior of individual bacteria by connecting them to a...

Im Focus: A space-time sensor for light-matter interactions

Physicists in the Laboratory for Attosecond Physics (run jointly by LMU Munich and the Max Planck Institute for Quantum Optics) have developed an attosecond electron microscope that allows them to visualize the dispersion of light in time and space, and observe the motions of electrons in atoms.

The most basic of all physical interactions in nature is that between light and matter. This interaction takes place in attosecond times (i.e. billionths of a...

Im Focus: A transistor of graphene nanoribbons

Transistors based on carbon nanostructures: what sounds like a futuristic dream could be reality in just a few years' time. An international research team working with Empa has now succeeded in producing nanotransistors from graphene ribbons that are only a few atoms wide, as reported in the current issue of the trade journal "Nature Communications."

Graphene ribbons that are only a few atoms wide, so-called graphene nanoribbons, have special electrical properties that make them promising candidates for the...

All Focus news of the innovation-report >>>

Anzeige

Anzeige

Event News

Innovative strategies to tackle parasitic worms

08.12.2017 | Event News

AKL’18: The opportunities and challenges of digitalization in the laser industry

07.12.2017 | Event News

Blockchain is becoming more important in the energy market

05.12.2017 | Event News

 
Latest News

Making fuel out of thick air

08.12.2017 | Life Sciences

Rules for superconductivity mirrored in 'excitonic insulator'

08.12.2017 | Information Technology

Smartphone case offers blood glucose monitoring on the go

08.12.2017 | Information Technology

VideoLinks
B2B-VideoLinks
More VideoLinks >>>