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
Date Written: May 8, 2016
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
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