Edited by Henk Folmer, H. Landis Gabel, Shelby Gerking and Adam Rose
Chapter 11: Corporate governance in the presence of major technological risks
Marcel Boyer and Bernard Sinclair-Desgagné 1 INTRODUCTION Most analysts and forecasters of the new economy adopt an optimistic view of technology. Together with globalization, technology is seen as the main engine of economic growth. It lies at the heart of the ‘knowledge-based economy’. And it provides comforting answers to the advocates of pessimistic scenarios based on climate change, natural resource depletion, endangered species and overpopulation. Technology, however, does not only yield beneﬁts. The other side of the coin is that, ﬁrst, technology itself often produces new hazards, such as industrial accidents and pollution.1 Secondly, by increasing the power of mankind over nature, technology also exacerbates the impact of human errors, as the deadly gas leak at Bhopal, the Exxon-Valdez oil spill and the threat of extensive destruction posed by modern warfare dramatically illustrate. Finally, technology often increases the extent of damages linked to natural events. This was shown in the Durunqa disaster of 1994, in Egypt, when over 100 people were killed by ﬂoods that destroyed a petroleum storage facility and carried burning oil into the heart of the town (Smith, 1996, p. 266), and also in the January 1998 ice storm that hit southern Québec, provoking a huge blackout which left more than 3 million electricity-dependent people without heat and power in the middle of the Canadian winter. Several institutions and management systems have therefore progressively been designed and implemented in order to control technological risks and enhance the net beneﬁts associated with technological development.2 There...
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