Corporate Elites and Intercorporate Networks (original) (raw)

Networks of corporate power revisited

Procedia - Social and Behavioral Sciences, 2011

This paper examines developments through the quarter century since the publication of Stokman, Ziegler and Scott's (1985) iconic ten-nation study of the structure of interlocking directorships. The surprising decline of research in the area following the publication of Networks of Corporate Power is in part testimony to the rigour of the comparative methods used, raising the standard of evidence required for subsequent director interlock studies. But it also reflected a critical weakness in director interlock research to that point, the limited ability to answer what Mark Mizruchi has called the "So what?" question. While replicated studies found clear structures in director interlocks, varying from country to country, and there was some speculative fit with the distinctive political economies of these countries, there was little evidence of any effect of these structures on firm performance or activity. The more recent resurgence in director interlock research is in some ways rooted in a second generation of the original drivers; the ready availability of now large masses of data on firm governance and firm level performance and further advances in social network analytical techniques. Where Stokman and his colleagues manually compiled lists of directors scoured from company reports, these data are now routinely collected and compiled in accessible databases by government agencies and business information services in many countries. And there has been a gradual accumulation of advances in addressing the "so what" question.

Who Killed the Inner Circle? The End of the Era of the Corporate Interlock Network

SSRN Electronic Journal, 2012

U.S. corporations shared members of their boards of directors since the early 1900s, creating a dense interlock network in which nearly every major corporation and director was connected through short paths and elevating a handful of well-connected directors to an influential "inner circle." This network remained highly-connected throughout the 20th century, serving as a mechanism for the rapid diffusion of information and practices, as well as a device for promoting elite cohesion. Some of the most well-established findings in the sociology of networks spring from this milieu. In the 2000s, however, board recruiting practices changed: well-connected directors became less preferred, and due to this shift in preference, the inner circle disappeared and companies are less connected to each other. Revisiting three classic studies on the diffusion of corporate policies, on corporate executives' political unity, and on elite socialization, we find that established understandings of the effects of board interlocks on U.S. corporations, their directors, and social elites no longer hold.

Statistical properties of corporate board and director networks

The European Physical Journal B - Condensed Matter, 2004

The boards of directors of the largest corporations of a country together with the directors form a dense bipartite network. The board network consist of boards connected through common directors. The director network is obtained taking the directors as nodes, and a membership in the same board as a link. These networks are involved in the decision making processes relevant for the macro-economy of a country. We present an extensive and comparative analysis of the statistical properties of the board network and the director network for the US Fortune 1000 corporations and the Italian Stock Market corporations. Some statistical properties are found to be specific to the director networks and the same in all the different cases of study. Some other statistical properties are instead found to be specific to the board networks but again the same in all the different cases of study. In particular the connectivity degree distribution of the director network has always a power law tail with similar exponent. On the contrary, the connectivity degree distribution of the board network is always rapidly decreasing. All the considered networks are Small World networks, assortative, highly clustered and dominated by a giant component. The presence of lobbies in boards turns out to be a macroscopic phenomenon in all cases of study. These results suggest a common underlying mechanism shaping the corporate control network over time and over different countries and should be taken into account in models of macroeconomic dynamics.

The Small World Network Structure of Boards of Directors

2004

In this paper we present a random graph model to explain the network structure of boards of directors. We investigate the conditions under which corporate boards can be said to be a "small-world". Our empirical results show that the random graph model is remarkably good at explaining board structure and connectedness in the United States, the United Kingdom and Germany. Although there are small-world traits such as "clustering" and "short-paths" in the corporate world, they are no more pronounced than would be expected by chance in a statistically similar, but randomly assembled corporate universe. Finally, our results show the existence of positive degree correlation: directors who sit on many boards do so in the company of other directors who sit on many boards. This result helps explain the distribution of board interlocks. * Acknowledgments: E-mail conyon@wharton.upenn.edu or M.Muldoon@UMIST.ac.uk with comments. We would like to thank Lori Rosenkopf and seminar participants at Manchester University for comments and discussions during the preparation of this paper. We are grateful to Lerong He for research assistance and to the Reginald Jones Center of the Wharton School for financial support.

The Small World of the American Corporate Elite, 1982-2001

Strategic Organization, 2003

This paper examines the degree of stability in the structure of the corporate elite network in the US during the 1980s and 1990s. Several studies have documented that board-toboard ties serve as a mechanism for the diffusion of corporate practices, strategies, and structures; thus, the overall structure of the network can shape the nature and rate of aggregate corporate change. But upheavals in the nature of corporate governance and nearly complete turnover in the firms and directors at the core of the network since 1980 prompt a reassessment of the network's topography. We find that the aggregate connectivity of the network is remarkably stable and appears to be an intrinsic property of the interlock network, resilient to major changes in corporate governance. After a brief review of elite studies in the US, we take advantage of the recent advances in the theoretical and methodological tools for analyzing network structures to examine the network properties of the directors and companies in 1982, 1990, and 1999. We use concepts from smallworld analysis to explain our finding that the structure of the corporate elite is resilient to macro and micro changes affecting corporate governance.

Interlocking directorates and corporate networks

Handbook of the International Political Economy of the Corporation, 2018

This chapter provides an introduction to the literature on interlocking directorates and corporate networks. It first traces the historical roots of the field back to the early 20th century, when researchers on both sides of the Atlantic started expressing concern about the threat to democratic process posed by the emergent corporate form, the potential for collusion allowed by the growing practice of interlocking directorate, and the general concentration of power in the hands of large firms and banks. It then outlines the major theoretical approaches employed, that focus on the corporate network as a set of both interorganizational and interindividual relationships. Third, it summarizes the main findings on the cohesiveness of the corporate community, the hegemonic position of banks, and historical changes and longitudinal dynamics of the network. Finally, it discusses most recent debates on the globalization, the emergence of a European corporate network, and the decline and recomposition of the corporate community.