In his opinion, interlocking directorships
can, firstly, result from the accidental overlapping of business activities conducted by two people and, secondly, they can also reflect the conscious and intentional manner of establishing links between enterprises at the level of the people involved, or be geared towards intensifying or stabilising existing links.
Weill said: "My decision to step down from these two boards and thus end interlocking directorships
at Citigroup is part of our continuing effort to assure that our corporate governance reflects best practices.
McNeill has advised the Federal Energy Regulatory Commission of his decision to leave NorthWestern's board since he may be considered to hold interlocking directorships
with nonaffiliated utilities by serving on both the NorthWestern and PGE boards.
This detects the presence of disclosure issues such as interlocking directorships
, interests in vendors or customers of the company, personal connections to members of the management team -- any of which could raise a question about the director's independence.
The 20 standards include the requirement that each Director stand for re-election annually, the prohibition of anti-takeover devices, the restriction of interlocking directorships
, and the requisite annual evaluation of the CEO.
Interlocking ownership coupled with interlocking directorships
does not make for good corporate governance
Potential conflict of interest: Minimize the number of active investment bankers, legal counsel, commercial bankers, consultants, and interlocking directorships
The main tenets of the guidelines include an annual CEO evaluation by independent directors, annual assessment of board effectiveness, no interlocking directorships
permitted, and a requirement that directors each hold a pre- established level of stock in the company.
In a shift from the insular boardroom of a generation ago -- where directors were primarily close friends and confidantes of the CEO, interlocking directorships
were common, and the board was essentially an extension of management -- companies now realize they must complement the management side of the equation with a wide range of outside intelligence and expertise if they are to expand their horizons to new markets or remain viable competitors in old ones.
There are no interlocking directorships
, which would occur if a Campbell executive served on the board of another company while an executive of that company served on Campbell's board.
May 3 /PRNewswire/ -- Interlocking directorships
-- two or more directors serving on two or more of the same corporate boards -- have become frequent occurrences in America's boardrooms.
was required to resign under the Federal Reserve Board's Regulation L, which prohibits interlocking directorships
among principal officers and directors of financial institutions.