Legal gaps in the peruvian corporate network: Negative practices in boards of directors

Abstract

Introduction: The networks generated among firms’ boards through their shared directors can cause conflicts of interests, generating potential negative business practices. Objective: This paper identifies the risks of negative managerial practices driven by theabsence of proper regulations to control the formation and behavior of interlocking directorates in Peru. Methodology: It discusses the interlocking directorates’ literature, and reviews current Peruvian regulation. Results: In addition to the identified risks, itemphasizes in the expectations of a proper behavior of directors as a decision of their own, due to the nature of their role. Conclusions: This interdisciplinary study between management and law evidences gaps in Peruvian regulation for the operation of interlocking directorates and suggests the development of future empirical research in Latin America towards the prevention of these negative corporate practices.