What is the relationship between the governance of the electricity companies and the current crisis derived from the increase in the price of the kilowatt ? A priori, none. The price increase is a derivative of many factors, most of them, surely the most relevant, exogenous to governance itself, at least as it is usually interpreted.
These factors include fluctuations in fuel pricesfossils, derived from geopolitical conditions, and the structure and composition of the rates and taxes set by governments; not to mention that the majority of consumers, who do not have to know the value chain of the electricity sector, tend to confuse the different links in it and their influence on setting prices. However, good corporate governance , essential for any company and especially relevant when it comes to an oligopoly and a sector as regulated as electricity, can have media implications and consumer perception, with potential high impact on accounts of results.
The governing bodies of these companies should be able to promote the mechanisms and actions necessary to influence the regulator, so as to minimize the impact of market fluctuations . And it is clear that Spanish companies in this sector, especially the larger ones, take this matter seriously, but not always in the best possible way. In Spain, lobbies do not work in the same way as, for example, in the United States., where its function is perfectly regulated and its activity is very evident.
There are numerous levers here that must be handled with exquisite sensitivity in a complex puzzle in which many actors participate: from political forces to different pressure groups and society as a whole, which is, in short, the one that suffers the consequences. consequences of a good or bad regulation and the future government will decide with its vote.
Two do not agree if one does not want to, but it is evident that there is a challenge of improvement that is not simple in the way of interacting between the governing bodies of the electricity industry companies and the political forces sitting on the blue bank of the current one. government.
The good governance model of a company is one that focuses, among others, on two points: the long term and the contribution of value to all the stakeholders linked to it. The combination of both manages to generate value for the shareholder, although this takes time. This value will also be produced indirectly, that is, when it has also had an impact on all stakeholders, some of whom are frequently forgotten or are relegated to the background, and also on the rest of the stakeholders. the value chain and in society itself as a whole. The strategic issues that are settled within the governing bodies of the organizations have a lot of impact, but in the medium and long term. They are “fine rain” that is seeping and does not work quickly. Faced with it,global context where speed and short-termism seem to dominate almost all aspects of life, and therefore it is easy to lose sight of the long term; however, time passes and it may happen that when “we see a fire in the kitchen, it is too late to save the stew”.
On the other hand, the concept of “triple bottom line” coined by John Elkington in 1994, has been slow to take hold, but it is here to stay. It is no longer worth thinking only about the economic performance of investments from a purely financial perspective. In fact, dealing only with the classic exclusively financial bottom line implies a total misalignment with the trends of society; it is something that is no longer tolerated by the markets and that will expel or relegate to irrelevant positions those companies that do not understand it.
The design and implementation of a well-designed business strategy that is piloted by the corporate governance bodies, that clearly defines a purpose, that identifies all the stakeholders and how to add value to them, and that draws a vision in the medium and long term, is a condition sine qua non to lead the company in its day to day to the benefit that its shareholders expect.
From now on, companies that want to build a sustainable future , and I am not referring only to the planet but to their own future, and that seek to be competitive, have no choice but to convert to the cause and have capable people in their governing bodies. to understand what the market demands,with enough empathy and courage to promote and implement excellent governance models; otherwise they are doomed to extinction.
The large size of the companies in the electricity sector allows them to better weather some storms, but the inertia of the large ocean liners is powerful and, therefore, dangerous because it can hide serious errors that surface too late to be corrected. It takes vision and courage on the bridge to change course when hardly anyone sees beyond what is perceived from the engine room, especially when one is not the owner of the ship and does not risk his own heritage if it runs aground .