Corporate Governance Of Network Utilities

Focused on the differences with traditional competitive enterprises, this text analyzed the critical stakeholders and the corporate governance goal of network utilities based on resource-dependence theory and contractual theory. It also investigated the corporate mechanism characteristics of network utilities through the case studying of Network Railway Company and JR East Company and the analysis from the angle of managers' multiple accountabilities in network utilities. The text found that due to the characteristics of network economy, natural monopoly, externality, public product attribute and public welfare attribute, different from traditional competitive enterprises, in network utilities government, other enterprises in the network and consumers were also the critical stakeholders. The corporate governance goal was to guarantee and moderate the benefits of the stakeholders such as shareholders, government, consumers and other enterprises in the network. Consumers' benefit was the first to consider. The characteristics of network utilities' corporate mechanisms were as follows: Regulation was an external corporate governance mechanism and played important role in guarantying and moderating the benefits of shareholders, government, consumers and other enterprises in the network; The power to control was not assigned according to the capital investment; The board dedicated to guarantying stakeholders' especially the consumer' s benefits and had close relation with government; the stimulated system was not only focused on profit.