Corporate interlock
To a certain extent, given that it can be measured, interlocking corporate directorates offer unique insight into the “black of box” of corporate decision-making and business politics. While we may not be at the table to eavesdrop on the conversation, we can identify the table, how it is set, and who is seated.
The phenomenon of corporate interlock refers to members of corporate boards of directors serving on multiple boards simultaneously, thus creatinga network of multiple directors and interlocking boards.
This phenomenon occurs worldwide and is a primary mechanism whereby corporations as a network form business associations to lobby, influence, and capture the State. One study examined the “global board interlock network, covering 400,000 firms linked through 1,700,000 edges representing shared directors between these firms.”
According to PODER (Mexico), “The case of Mexico is especially flagrant. As of last count, 37 people own or maintain influence over 28% of the national economy through interlocking corporate directorships, the revolving door, and corruption, making it arguably the most unequal country on the planet. Since the 1960s one organization – the Mexican Council of Businesspeople – comprised of the owners of Mexican capital meets regularly with the president or his proxy to engage in a simple quid pro quo: the executive branch provides privileged information to the elite prior to announcing official decisions, for example about megaprojects such as the new airport or the recent oil and electricity privatization, in exchange for the business sector publicly expressing support for the president and his government so as to confer legitimacy. Essentially, in Mexico corporate capture has become institutionalized.”
While corporate interlock is not inherently indicative of capture, it significantly facilitates collective corporate action by fostering communication and mutual trust among board directors. This often results in corporations presenting a unified front with shared goals or interests. Consequently,interlocking directorates provide corporations with the resources or linkages to maintain or increase their power, making it a common precursor to corporate capture.