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The impact of political directors on corporate strategy for government-owned utilities: Evidence from Ontario’s electricity distribution sector

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We contribute to research on governance of state-owned electric utilities by examining the implications of
oversight by independent versus ‘political’ directors for corporate strategy. While policy think-tanks often
recommend that governments appoint independent professional directors to boards of state-owned corporations,
governments sometimes select politicians who bring a politically-oriented perspective to their oversight duties.
To examine the potential strategic consequences, we draw on a novel survey of 384 directors of municipallyowned local electricity distribution companies in Canada, of which about a third were elected municipal
councillors and the remaining were independent business professionals. The survey solicited individual director
views about strategic priorities, including mergers and acquisitions, business diversification, and corporate
financing options. Our statistical analysis of the survey response data finds that political directors, after controlling for prior executive experience and organizational context, were more risk-tolerant on average than independent directors, as evidenced by a greater willingness to diversify into unregulated business activities and to
acquire equit stakes in other utilities; but at the same time, they prioritized enhanced dividend payments to the
municipal government over re-investment in the corporation, a potential constraint on future business growth.

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Ketersediaan

EJ21412

My Library

Tersedia

Informasi Detil

Judul Seri

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No. Panggil

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Penerbit

Elsevier : ., 2020

Deskripsi Fisik

8 p.

Bahasa

English

ISBN/ISSN

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Klasifikasi

NONE

Tipe Isi

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Tipe Media

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Tipe Pembawa

online resource

Edisi

Energy Policy 143 (2020) 111529

Subyek

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Info Detil Spesifik

Ejurnal

Pernyataan Tanggungjawab

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Versi lain/terkait

Lampiran Berkas

Komentar

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