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 ?
Different types of corporate networks were studied before such as ownership networks, equity or interlocking directorates. This study will focus on the literature review about the latter, following the research questions explained below.
Interlocking directorates in Canada: evidence from replacement patterns.
Unlike the Clayton Act, the PCA does not contain any specific provision expressly prohibiting interlocking directorates in competing businesses.
Interlocking Directorates and Section 8 of the Clayton Act
One result of these features is the pervasiveness of interlocking directorates between corporations and the government in emerging economies.
Interlocking Directorates. Interlocking directorates are the final form of interorganizational relationship discussed in this section.
The interlocking directorate is an organizational mechanism for the control and coordination of actions of firms in business groups, and it may be found in conjunction with any of the other solidarity mechanisms (Granovetter 1994: 464).
Emerging research from Carroll (2017) provides a wide-angle view on the organization and architecture of the carbon sector in Canada, mapping its internal structure as a network of interlocking directorates and its ties to the financial sector and other segments of corporate capital--national and transnational.
Given that ICAP and Tullett Prebon would continue to compete after the transaction, the department had serious concerns that ICAPs ability to nominate a Tullett Prebon board member would create an interlocking directorate in violation of Section 8 of the Clayton Act.
In the third section, we review the theory of interlocking directorates, as we believe that director interlocks will form an important mechanism for information sharing and the creation of community-level social capital among family business owners.
Social network techniques have long been used in research on the interlocking directorate, where the firm is the unit of analysis, but this technique may also be fruitfully applied to the study of relationships between individual directors within boards (see Palmer, 1988, for a discussion of the "dual nature" of corporate interlocks).
Although never formally defined, weak governance is characterized by diffusion of shareholdings among outside owners, board passivity, minimal interlocking directorates, and managerial/board characteristics such as minimal equity ownership or an insider heavy board (Bethel & Liebeskind, 1993; Dalton & Dalton, 2011; Westphal & Fredrickson, 2001).