interlocking directorates


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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.

interlocking directorates

Boards of directors of different firms that have one or more of the same people serving as directors. Interlocking directorates are illegal among competing firms.
References in periodicals archive ?
The Theories that Explain the Existence of Interlocking Directorates
This model does not view interlocking directorates as a strategy to manage environmental uncertainty (Bazerman, Schoorman, 1983); therefore, this theory does not explain why interlocking directorates exist, but rather why they do not exist.
The next set of theories explaining the existence of interlocking directorates can be divided into three groups.
From this point of view, interlocking directorates are interpreted as "traces of power", "class hegemony", and "as vehicles in the accumulation of capital along an integrated financial-industrial axis" (Carroll William K.
According to this model, interlocking directorates are not created by companies, but rather by individuals who are looking for position in additional boards of directors and who are acting in their own interests.
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).
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.
In order to understand interpersonal influence within and among EDOs, it is useful to understand that internally an EDO operates much like an interlocking directorate, which is "a network though which affect, evaluation, knowledge, opinion, influence and power are constantly passing among directors" (Koenig and Gogel, 1981: 40).