The “ties that bind” board interlocks research: a systematic review

Abstract

Purpose Board interlocks are a phenomenon of widespread prevalence and one of the most vibrant topics in corporate governance research. However, despite sustained academic interest in interlocks, there has not been a comprehensive review of the literature in nearly two decades. To address this need for an up-to-date review, this paper aims to conduct an assessment and integration of the empirical research on board interlocks. Design/methodology/approach In reviewing the board interlocks literature, the “systematic review” approach, which emphasizes methodological rigor and transparency, has been used. Using this method, 81 empirical papers that became the focus of this analysis have been identified. Findings This review reveals that board interlocks research can be categorized based on the theoretical lens used, its focus on antecedents or outcomes of interlock activities and the perspective of the study (i.e. firm- or director-level). Moreover, a number of commonly examined themes have been identified. Several unexpected omissions in the literature have also been uncovered. For instance, it was found that scholars have neither examined the implications of engaging in interlocks in a global context nor have they explored the phenomenon of international interlocks (i.e. interlocks between firms located in different countries). Originality/value In developing a deeper understanding of the board interlocks literature, this review identifies several topics and disciplines that, if pursued, could enrich the literature and open promising avenues for future research.

An Institutional Contingency Perspective of Interlocking Directorates

“…The importance of the research on board interlocks, which has rapidly developed and expanded in the last 100 years, rests in the lessons for corporate governance and our understanding of how social elites impact economic organization. This growing attention can be ascribed to new challenges that companies face in multiple contexts and to theoretical advancements in the fields of strategic management, and sociology (Lamb and Roundy ). This review provides a partial answer to Mizruchi's () question ‘What do interlocking directories really do?’ by introducing the institutional context to the theory.…”

The United States of America’s interlocked information industry: An examination into seven U.S. media sectors’ boards of directors

“…A board directorship provides corporate governance and oversight for publicly traded organisations (Artero, 2009). Directors are recruited for their power, prestige, and prowess and these individuals are asked to serve on the board of directors because of what they can bring to or offer the organisation through resources, expertise, or reputation (Lamb & Roundy, 2016;Mizruchi, 1996;Schoorman, Bazerman, & Atkin, 1981;Zajac & Westphal, 1996). In the media sector, corporate governance is often handled by the board of directors (Artero, 2009).…”

“…A conglomerate's chief executive officer (CEO) serves as board president (Mizruchi, 1996;Zajac & Westphal, 1996) and the CEO and directors govern the highest level of operations to provide oversight regarding legal, financial, political, social, and personnel matters (An & Jin, 2005, 2004Artero, 2009;Han, 1988;Mizruchi, 1996;Mizruchi & Stearns, 1988;Palmer et al, 1986;Simmons, 2012). Directors are recruited to serve on media conglomerate boards for their expertise in the industry, perceived prestige in the media industry, or because that person is well connected to resources of interest for the media organisation (Lamb & Roundy, 2016;Mizruchi, 1996;Schoorman et al, 1981;Zajac & Westphal, 1996).…”

“…When a person affiliated with one business or "firm," sits on the board of directors of another, an "interlocking" of the two firms create a networked interfirm tie (Mizruchi, 1996, p. 271). Interfirm interlocks create connections between organisations and influential individuals for mutual benefit (Lamb & Roundy, 2016). These benefits range from personal to organisational.…”

“…This study applies a network perspective as both the theoretical and methodological approach to examine interlocks among media conglomerates in the U.S. Past approaches to studying the phenomenon of board interlocks have included network analyses Koenig & Gogel, 1981;Lamb & Roundy, 2016;Palmer, Friedland, & Singh, 1986;Xia, Wang, Lin, Yang, & Li, 2018), but none such network studies have focused on board interlocks across U.S. media sectors (Picard, 2006). The current research addresses this gap in the interlocking, media studies and the network literatures.…”