Not Available for Download

Who Killed the Inner Circle? The Decline of the American Corporate Interlock Network

American Journal of Sociology, Forthcoming

Posted: 17 May 2012 Last revised: 2 Jun 2016

Johan S. G. Chu

University of Chicago - Booth School of Business

Gerald F. Davis

University of Michigan, Stephen M. Ross School of Business

Date Written: May 8, 2016

Abstract

U.S. corporations shared members of their boards of directors since the early 1900s, creating a dense interlock network in which nearly every major corporation was connected through short paths, and elevating a handful of well-connected directors to an influential “inner circle.” This network remained highly-connected throughout the 20th century, serving as a mechanism for the rapid diffusion of information and practices, and promoting elite cohesion. Some of the most well-established findings in the sociology of networks sprang from this milieu. In the 2000s, however, board recruiting practices changed: we find that well-connected directors became less preferred. As a result, the inner circle disappeared and companies became less connected to each other. Revisiting three classic studies, on the diffusion of corporate policies, on corporate executives’ political unity, and on elite socialization, shows that established understandings of the effects of board interlocks on U.S. corporations, directors, and social elites no longer hold.

Keywords: Collapse, Elites, Corporate Governance, Social Networks, Corporate Interlocks, Network Dynamics, Diffusion, Political Contributions

Suggested Citation

Chu, Johan S. G. and Davis, Gerald F., Who Killed the Inner Circle? The Decline of the American Corporate Interlock Network (May 8, 2016). American Journal of Sociology, Forthcoming. Available at SSRN: https://ssrn.com/abstract=2061113 or http://dx.doi.org/10.2139/ssrn.2061113

Johan Chu (Contact Author)

University of Chicago - Booth School of Business ( email )

5807 S. Woodlawn Avenue
Chicago, IL 60637
United States

Gerald Davis

University of Michigan, Stephen M. Ross School of Business ( email )

701 Tappan Street
Ann Arbor, MI 48109-1234
United States
734-647-4737 (Phone)
734-936-0282 (Fax)

Paper statistics

Abstract Views
4,484