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 ?
H3: There is relationship between interlocking directorship and audit quality.
Through interlocking directorships, elite networkers form a corporate community (Domhoff 2006), further concentrating economic power and giving the lie to "perfect competition." Studies of Canada's corporate elite have mapped the cohesive network of power into which large firms have been organized throughout the twentieth and now twenty-first centuries (Carroll 2004; Piedalue 1976).
Deeper knowledge about Congress and the interlocking directorships of the NGOs would also be extremely helpful in further analysis.
For the foreseeable future, directors on compensation committees must disclose their background, qualifications, and potential or existing conflict-of-interest relationships, including interlocking directorships that may have an impact on compensation policies for several companies on whose boards they serve.
last year amid concerns of potential conflicts from interlocking directorships. David C.
But then Silicon Valley's idea of corporate boards has long consisted of cosy, interlocking directorships which would be considered collusion in most other industries.
Lester and Cannella (2006) propose interlocking directorships as one means by which successful family firms might solve intra-family agency problems efficiently.
Reingold takes a swipe at interlocking directorships, particularly in the case of AT&T and Citigroup, the indefeasible rights of use (IRUs) and their accounting treatment.
By means of interlocking directorships, cross-shareholdings and other devices, groups of apparently different companies have formed, in fact, one enormous capitalist monopoly.
Chapter Three continues the economic analysis of elite unity by focusing on interlocking directorships in the Canadian economy.
In a study of what constitutes effective ownership of corporations, a historic House Committee report highlighted two critical factors: (1) institutional stock and bond holdings and (2) interlocking directorships (House Committee on Banking and Currency, 1968).