Interlocking Directorates

MAJOR COMPANIES operate under the control of steep hierarchies, with ultimate vested power, in principle, in the board of directors. Interlocking directorates occur in situations where a particular person sits on the board or is in the top management of two or more companies. An interlock occurs when an individual serves on the board of directors of two companies (a direct interlock) or when two board members of competing companies serve in the board of a third company (indirect interlock). This concept, in the way it is often used, is considered by some as a cornerstone of western capitalism.

When interlocks occur, there is the potential for cohesiveness, common action, and unified power. This is one of the mechanisms that promotes everincreasing concentration of the size ...