Strategic corporate covernance: the case of Reykjavík Energy

Abstract

This article is about strategic corporate governance based on a case study of Reykjavik Energy (OR). OR is a partnership owned by three municipalities. Due to legislative changes requiring electricity production and sales to be operated in a separate company from its distribution, OR was reorganised in 2014 to a parent company and three subsidiaries. At that time OR’s partnership agreement was renewed as well as the ownership strategy and the governance procedures were revised to reflect the new structure. A close look is taken at the processes and practices of strategy and governance that have been developed within OR to ensure that all business units operate in accordance with the ownership strategy. The main findings reveal the practices that enable the board of directors of OR to have the necessary oversight to fulfill its obligations after the reorganization of the company. The study also reveals that the specific conditions after the collapse of the financial system in Iceland in 2008 had an impact on the development of corporate governance within OR.