Networks of Power and Influence: Board Interlocks in India 1995-2007 – An Empirical Investigation

70 Pages Posted: 29 Sep 2012

See all articles by S. Chandrashekar

S. Chandrashekar

Indian Institute of Management Bangalore

K. Muralidharan

Duisenberg School of Finance

Date Written: September 28, 2012


The Board interlock networks for 166 Indian companies have been studied for the period 1995 to 2007. The most well connected companies and the most well connected directors have been identified from this data set. The Indian network has also been compared with the networks of other countries for which similar data is available. Apart from studying the trends in the evolution and the dynamics of change in this network, the continuity of relationships between companies during this period has been a special focus of our study. This reveals that 45 percent of all companies in our sample set have remained continuously connected for more than ten years indicating a very stable core network. Family, caste and to some extent geography seem to be the important factors that determine this inner core network. The education and background of the Directors of the inner core network have also been compared with those of the Board interlock network for 2007. Based on our empirical findings and a survey of the Board Interlock literature a research agenda is suggested. This not only tries to address the specific issues that could be studied using Board interlock data but also covers the larger issues of institutions for corporate governance in the Indian context. Two theories - transaction cost theory and evolutionary game theory - that are complementary to each other show promise for addressing problems of institution evolution and change. Both of them also depend on network theory and open system dynamic models to look at evolution and change. If these domains of knowledge can be integrated a new thrust and direction can be given towards addressing the problems of corporate governance and institutional change. The Indian corporate scene could be a promising starting point for driving such a research agenda. A brief on the origins and dynamics of the Satyam episode as seen through the Board interlock lens is also provided.

Keywords: Board Interlock, Corporate Governance, Institutional Change, Networks

Suggested Citation

Chandrashekar, S. and Muralidharan, K., Networks of Power and Influence: Board Interlocks in India 1995-2007 – An Empirical Investigation (September 28, 2012). IIM Bangalore Research Paper No. 374, Available at SSRN: or

S. Chandrashekar (Contact Author)

Indian Institute of Management Bangalore ( email )

Bannerghatta Road
Bangalore, Karnataka 560076

K. Muralidharan

Duisenberg School of Finance ( email )

Gustav Mahlerplein 117
Amsterdam, 1082 MS

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