interlocking directorates


Also found in: Dictionary, Legal, Wikipedia.

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 ?
An analysis, critique, and assessment of research on interlocking directorates.
Unlike the Clayton Act, the PCA does not contain any specific provision expressly prohibiting interlocking directorates in competing businesses.
the understanding of interlocking directorates and section 8 of the
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.
Since our study focuses in good part on the network of interlocking directorates, in constructing our C250s we replaced any firms lacking board data with the next largest corporation in the Financial Post 500, creating equally sized judgment samples of 250 firms, with complete data.
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.
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.
1967) The Controllers: Interlocking Directorates in Large Australian Companies.
Interlocking directorates can be incredibly complex, with relationships open to questions due simply to appearance.
Most think that acquisition behavior diffuses through the network of interlocking directorates (Haunschild, 1993; Davis, Diekmann, and Tinsley, 1995; Haunschild and Beckman, 1998).
The paper also reviews the six forms of interorganizational relationships most commonly pursued in practice and discussed in the litera ture, including joint ventures, networks, consortia, alliances, trade associations, and interlocking directorates.
She has published several articles on European banking and corporate finance, including "Relationship Banking, Liquidity, and Investment in the German Industrialization," Journal of Finance (October 1998), "Fiduciari and Firm Liquidity Constraints: the Italian Experience with German-Style Universal Banking," Explorations in Economic History (January 1998), and "The Rise of Interlocking Directorates in Imperial Germany", Economic History Review (May 1999).