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Interlocking Directorate

   Also found in: Dictionary/thesaurus, Legal, Wikipedia 0.01 sec.
Interlocking directorate
Describes cross-memberships of directors on each other's company Board of Directors.

Interlocking Directorates
A situation or state in which one person is a member of the board of directors in more than one publicly-traded company. This creates the possibility of a conflict of interest; indeed, interlocking directorates are illegal when two companies are competitors.


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These kinds of ties have figured prominently in the interlocking directorate literature (Mizruchi 1996).
Larger boards increase the possibilities for interlocking directorates among board members and other firms, and can greatly assist a firm in its efforts to secure vital resources (Bazerman and Schoorman, 1983; Burt, 1980, 1983; Stearns and Mizruchi, 1993).
These contacts can be formal alliances, cooperatives, interlocking directorates, intergovernmental relationships, supplier/customer relationships, and joint ventures or they can be more informal, from chance meetings or relationships based on mutual goals that are not legally binding.
 
 
 
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