Interlocking directorate


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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.
References in periodicals archive ?
The subject of the study was interlocking directorates in Polish joint-stock companies.
Keywords: Interlocking directorates, board of directors, supervisory board.
Studies concerning interlocking directorates have been carried out over many years, and during this time some theories have been proposed to explain the reasons for this phenomenon.
The Theories that Explain the Existence of Interlocking Directorates
According to Pfeffer (1987), interlocking directorates are the most appropriate and least costly form of inter-organizational coordination when the ownership of the industry is legally prohibited or impossible owing to resource constraints.
The literature review discusses two perspectives on the impact of interlocking directorates on firm performance.
It therefore appears that in crisis situations, inter-industry interlocks support Pfeffer and Salancik's (1978) resource dependency argument for interlocking directorates.
Cooptive Corporate Actor Networks: A Reconsideration of Interlocking Directorates Involving American Manufacturing.
By taking the different governance systems (one tier versus two tier) into consideration, significant overlaps between interlocking directorates and ownership networks are identified although differences have to be stated.
definitions of capital networks and interlocking directorates, explanation of differences between corporate and elite networks, delineation of differences between ownership structures in Germany on the one hand and Britain and the United States on the other hand).
Hunter's simultaneous service on the boards of competitors Penford and Hercules appears to be a clear violation of the prohibition of interlocking directorates and officers as stated in Section 8 of the Clayton Act, 15 U.
Such an election would result in a violation of Section 8 of the Clayton Act, which prohibits interlocking directorates between competitors.