The Performance Impact of Interlocking Directorates: The Case of Singapore

摘要: The board of directors has increasingly become the focus corporate governance research and policy making in emerging economies following Mexican Peso crisis 1990, Asian economic 1997, Russian Ruble collapse 1998, Brazilian Real Argentine 2002, among other financial crises. Observers have noted that lack standards weak enforcement existing laws are partly responsible for such crises inability companies to recover from them. At issue some unique features economies. dear strongly enforced property rights attenuate depth public capital markets, forcing many firms into private equity arrangements financing. Private friends family, coupled with family control, engender opaque boardroom practices between related companies. Emerging also characterized by extensive governmental involvement enterprises, ostensibly encourage development risk-taking, but instead discourage accumulation favor de facto taxed-based One result these is pervasiveness interlocking directorates corporations government In its most basic form, an directorate occurs when a person one organization sits on another company (Mizruchi, 1996). Hence, interlock may take several forms. It individual focal or company. Interlocks occur there simultaneous exchange individuals boards two They individuals, A B, different sit third company, X. B indirect while X interlocked B. For purposes this study, we chose stringent definition which current senior managers and/or simultaneously serve each others' boards. Since it unclear if theories generalizable outside non-Anglo-American context, study seeks understand phenomenon interlocks their relationship firm performance economy, namely Singapore. next section, reviewed, followed hypotheses. Next, methodology described, presentation results discussion implications. THEORIES OF INTERLOCKING DIRECTORATES Interlocking Directorates Class Integration theory proposes they exist class integration, defined as mutual protection interests social members (Koenig Gogel, 1981; Useem, 1982). This process driven identification appointment director candidates similar backgrounds, characteristics, political beliefs within personal networks incumbent members. "class hegemony" elite whose primary interactions purpose protecting welfare (1) and, extension, who belongs Koenig al, 1979; example, Useem's (1982) interviews 1,307 U.S. British executives uncovered network corporations, institutions, agencies, loosely held together common goal preserving collective positions society. …