Interlocking Directorate


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Interlocking Directorate

The relationship that exists between the board of directors of one corporation with that of another due to the fact that a number of members sit on both boards and, therefore, there is a substantial likelihood that neither corporation acts independently of the other.

Because the same persons occupy seats on the boards of companies that are supposed to compete in the marketplace, there is a potential for violations of federal antitrust acts, particularly the Clayton Act (15 U.S.C.A. §§ 12-27 [1914]) which prohibits the existence of inter-locking directorates that substantially reduce commercial competition.

References in periodicals archive ?
An Analysis, Critique, and Assessment of Research on Interlocking Directorate, Annual Review of Sociology, Vol.
One result of these features is the pervasiveness of interlocking directorates between corporations and the government in emerging economies.
Although Zajac's data are indicative for interlocking directorates among competing firms, the opposite may well hold for interlocks among cooperating organizations such as EDOs.
Stearns, 1988, "A Longitudinal Study of the Formation of Interlocking Directorates," Administrative Science Quarterly 33, 194-210.
In chapter 2 a descriptive analysis is performed for capital networks and interlocking directorates in six countries: Germany, Britain, France, Switzerland, Netherlands, and the United States.
So, too, are special interest shareholders, non-participating family members, interlocking directorates, and personal friends of the CEO.
NRES, GNCP and Senior may be deemed to be affiliates due to their interlocking directorates, common stockholders and business relationships.
I am writing to request that the Federal Trade Commission investigate the apparent illegal interlocking directorates of John C.
Despite extensive documentation and periodic popular complaints, the existence of interlocking directorates among large corporations has not generated much concern across a wide segment of American business and society.
Stipulate that this committee has only outside directors, none of whom is "beholden" in any way to the company or CEO, and none of whom has interlocking directorates.
NRES and VAOM may be deemed as affiliates due to their interlocking directorates, common shareholders and business relationships.
Key components of governance include the absence of anti-takeover devices, the requirement that all directors stand for election every year, the fact that 15 of the 16 directors are independent, the absence of interlocking directorates, and entirely independent assessment of CEO performance.