Interlocking Directorates in Corporate Governance

Comparative Analysis of Corporate Governance
The Role of interlocking directories in corporate governance

Supervisor:                                                                   Student:
Dr. Maria Aluchna                                                     Andrea Tundo

Academic Year 2009/2010

“They sit on the board of the largest companies in America, many sit on government committees. They make decisions that affect our lives. They rule”
The quotation above, explains, somehow, the reasons why I chose this topic. Taking into consideration the historical changes of corporations in the last 20years, with the massive expansion of global companies, top management teams had to be read to face new challenges in order to maintain their competitive advantages towards rivals. Consequently, there have been several changes in corporate governance, with the substantial increase of interlocking directorates. Actually, interlocking directorates, like globalization, have always existed, especially between banks and firms, then they are a long-run historical evolution within board of directors and top management teams. These links boost particularly among SMEs. Hence, defining this phenomenon, we can say that this happen when we have two board of directors which share, at least, one director in common and it is illegal if the two companies are competitors.
Coming back to the quotation, the choice of this topic is mainly driven by personal reasons, indeed being a passionate of political issues, the following theme, will demonstrate how interlocking directorates are an effective tool that influence political decisions. In fact, the majority of political decisions in the U.S. or in EU are made in order to facilitate the progress and growth of determined industries or companies, therefore to facilitate the elite groups. In fact, highlighting the last line of the quotation, it explains easily how political decisions affect our lives. Besides, I chose this...