Interlocking Directorates

Interlocking directorates – connections between firms based on shared board members – have the potential to create substantial governance and ethical issues for corporations. Collusion, corruption, resource capture, poor monitoring and the stagnation of ideas can result from directors who are too closely tied to one another. 

Company directors exert considerable influence over firms. Throughout the twentieth century, personal and family capitalism gradually gave way to professional management, with individuals sitting on the boards of multiple companies. While putatively a source of objective decision-making, the involvement of non-executive directors across different firms gives them the opportunity to share ideas with directors and stakeholders in different industries. Connections between board members may be positive for diffusion of innovations and mitigation of risk, while concentrating corporate control within a small group may have pejorative implications for business ethics, leadership, and diversity.

Interlocking directorates may develop for a number of reasons. The class hegemony perspective argues that interlocks are the result of cohesion amongst an elite group. Interlocks also have implications for corporate governance, with networks forming to monitor the company’s management team, add legitimacy to operations, and stabilize access to investment. On the other hand, interlocks may indicate busy board members with less time to monitor the firm. Interlocks may also improve access to resources, with networks forming between a company board and its bank in order to obtain financing. Interlocks may contribute to information diffusion, which may encourage the development of new ideas and techniques, improve co-ordination, and highlight new business opportunities.

In response to the myriad possible causes and consequences of interlocking directorates, this project examined the nature and effect of this phenomenon in Australia throughout the twentieth and early twenty-first century. It interrogated the composition and diversity of the elite (particularly the importance of professionals), the broad structure and creation of director networks, and their influence of these connections on knowledge and strategy within firms. By combining prosopography, social network analysis, and archival analysis, this provided a nuanced understanding of director networks within the Australian context, whilst also disentangling the complex long-run effects of firm connections on knowledge.


Latest happenings

Claire Wright, business historian, interviewed by the Australian regarding composition of corporate boards

Feature article: "How the Big Four firms have ‘infiltrated’ top corporate boards", The Weekend Australian, Helen Trinca and Joe Lam, 10th June 2023.

The boards of Australia’s Top 100 companies are heavily populated by people drawn from the ranks of professional service firms, with almost 25 per cent of directors with multiple seats coming from the Big Four – PricewaterhouseCoopers, EY, KPMG and Deloitte.

The revelation that one in four of so-called “interlocked” directors – those who hold two or more board seats in the top companies – has worked at the Big Four comes as the firms reel from the controversy surrounding PwC’s tax advice to the ­federal government.

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Article: Above board? Interlocking directorates and corporate contagion in 1980s Australia

This paper re-examines the 1980s era of corporate misconduct, assessing the role of interlocking directorates for corporate governance of diversified business groups, and the way professionalism has been weaponised within Australian managerial capitalism.

Article: Board games: Antecedents Australia’s interlocking directorates, 1910-2018

The first systematic, longitudinal analysis of the antecedents of interlocking directorates in Australia. Argues that the network has been characterized by a relatively consistent long-run level of connection but substantial variation in the causes of interlocks. Interlocks have responded to the pragmatics of the board member occupation, with corporate governance regulations, the progress of the professions, banking and prudential practices, and the form of large organizations encouraging ties that were built on professional expertise and geographic proximity.

Article: Managerial capitalism and white-collar professions: Social mobility in Australia’s corporate elite

With Hannah Forsyth, this article examines the interdependence of managerial capitalism with the historical constitution of professional work in Australia. Uses data on the composition of top company board members to show a deep connection between the professional expertise and signals of legitimacy of the managerial class and the top layers of professional hierarchies. Low levels of professional enclosure in the late nineteenth and early twentieth centuries created opportunities for Australians from middle- and working-class backgrounds to move into the capitalist elite. As time went on these opportunities were reduced, as pathways to managerial roles themselves enclosed and managerialism – as a mode of production – increasingly dominated global capitalism.

Newspaper interview: Helen Trinca, “Gaming online training a test for corporates”, Weekend Australian, 18 September 2021.

In this interview with the Weekend Australian’s Helen Trinca, Claire reflects on the history and effectiveness of standardised compliance training for creating trust in professions such as accounting.

Newspaper interview: Helen Trinca, “Their path to power: The domination of the big four”, Weekend Australian, 12 September 2020

If your ambition is to join one of the nation’s top corporate boards you could do worse than opt for a degree in accounting or the law. Then do all you can to join one of the big four professional service firms and hang on till you make partner. Around 50 or so you can happily say goodbye to your colleagues with the expectation that your professional experience and accreditation will prompt an invitation to join an ASX publicly listed company board.

In this article, Helen Trinca and Claire discuss the career paths of top company directors, particularly the increasing dominance of the corporate elite by professionals such as lawyers, accountants and bankers.

Article: The boarding pass: Pathways to corporate networks in early twentieth century Australia

Examines the network of board members of large Australian corporations in the 1910s. Social network analysis is used to identify the structure of the network, and prosopography is used to understand the characteristics of the group and the possible pathways through which interlocking directorates developed. The evidence reveals a heavily interlocked business sector in Australia in the 1910s. Multiple directorships were the result of professional skills, prior business experience, kinship, marriage, class, gender and empire.

Column: Claire Wright, ‘Painting Qantas chief executive Alan Joyce as a superhero is part of a long Australian tradition’, ABC News via The Conversation, 9th October, 2019.

Alan Joyce is Australia’s highest paid chief executive.

Alan Joyce is one of the Financial Review’s ten most covertly powerful people.

Alan Joyce writes heartwarming notes to children.

Alan Joyce is getting married.

And he is apparently some sort of superhero.

Something about chief executives brings forth testimonials like this, published in the News Corporation tabloids last month, which followed the revelation that Joyce was Australia’s highest paid corporate chief (taking home $24 million in 2018-19).

In this column, Claire discusses the history of media representations of corporate leaders, and the way that painting leaders as exceptional and untouchable justifies exorbitant their often pay.



ARC DECRA Fellow at UTS Business School


I acknowledge the Traditional Custodians of country throughout Australia and their connections to land, sea and community. In particular, I acknowledge that I live and work on the unceded lands of the Dharawal and Gadigal people. This always was, and always will be Aboriginal land. I pay my respect to their Elders past and present and extend that respect to all Aboriginal and Torres Straight Islander peoples today.

All thoughts and opinions posted on this website are my own, and not reflective of the institutions I may represent.

Copyright 2022 Claire E. F. Wright