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 ?
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.
end interlocking directorships at Citigroup is part of our continuing effort to assure that our corporate governance reflects best practices," Weill said at the time.
The corporate-governance reforms reviewed earlier altered several practices that actually produce the corporate network, and in view of the importance the reforms placed upon outside directors as custodians of shareholder value, we must distinguish between two kinds of interlocking directorships that arise out of board practices.
Potential conflicts of interest: Minimize the number of active investment bankers, legal counsel, commercial bankers, consultants, and interlocking directorships.
Here more about interlocking directorships could probably have been said if a little more formal network analysis were applied.
Going back even that far, Hawaii's corporate boards were dominated by an elite few - a quorum of interlocking directorships that made decisions for all the state's largest businesses.
For one particular mechanism of networking, early research[8] concluded that interlocking directorships have a direct bearing on the knowledge and influence of individual organisations; they can help generate business and can also be a way of limiting competition or repressing opposition.
In this section, the authors deal with a variety of aspects very competently--Mats Larsson on the banking difficulties of the 1920s; Kristina Bjorkegren on the banks' public image; Hans Sjogren on the distribution of bank loans; and Jan Ottosson on networks and interlocking directorships between finance and industry.
The significance of each of these structures is tested with a sample of the forty largest industrial firms and twenty largest financial firms in Japan across networks of equity ownership, interlocking directorships, and banking borrowing.
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.
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 primary textile industry was one of the country's largest employers between 1880 and 1950, and the history of cotton textiles is intricately linked to the rise of Canadian financial institutions and other industries through interlocking directorships.