Corporate governance of public utilities
In recent years, corporate governance has been one of the most discussed issues among authorities, politicians, business people, scholars and commentators. Although this attention is particularly due to well-publicized governance failures and subsequent regulatory changes, this topic is an area of longstanding interest. OECD (2004) defined it as a set of relationships between a company and its stakeholders. Corporate governance provides the structure through which the objectives of the company are set, and the means of attaining those objectives and monitoring performance are determined.
In public utilities corporate governance assumes a much more complex and relevant role than in other companies: market regulation, public-private ownership, political connections and multiple agency relationships may change the company’s objectives and relationships, arising critical and interesting questions.
This issue of the Network Industries Quarterly will look at different aspects of corporate governance of public utilities. De Masi and Paci analyze the role of independent directors, focusing on corporate governance codes and independent directors’ influences over corporate objectives. Menozzi and Vannoni discuss the issue of politically connected directors, their role and their value for firms dominated by state shareholders. Smith, Thompson and Wright instead, debate the role of the governance mechanism ‘Say on Pay’, comparing UK utilities and non-financial companies. Cambini, Gugler and Rondi examine the dividend policy of EU telecommunications and electricity industries, showing differences between the sectors.Miriello and Castelnuovo study the mergers and acquisitions (M&A) activities in energy networks, looking at the effects of different owners on investment propensity.