Coordination, control, or charade? The role of board interlocks among business group members

Fabio Zona, Brian Keane Boyd, Katalin Takacs Haynes

Research output: Contribution to journalArticlepeer-review

7 Scopus citations


Purpose: How do business groups manage their internal processes? The purpose of this paper is to explore how board interlocks between members serve as control and coordination mechanisms within business groups. The authors propose that centrality of groups’ affiliates in the group network of interlocking directorates is shaped by agency and resource dependence forces. In particular, the authors examine the role of international board ties as a resource and information conduit. Design/methodology/approach: This study leverages proprietary information on firm-to-firm transaction ties among all 155 affiliates belonging to a large Italian business group. The authors use network analysis to develop multiple measures of the centrality of each group member, and link these to resource transactions, ownership patterns and geographic distributions. The authors test the hypotheses in a structural equation model using LISREL. Findings: The results demonstrate that both resource exchanges and the presence of cross-national relations increase an affiliate’s central position in the group’s network of board ties. In contrast, ownership ties between members were unrelated to affiliate centrality. Originality/value: Internal governance mechanisms of business groups are rarely studied. While groups are often portrayed as inefficient or value-destroying, the analysis of proprietary firm data suggests a very different scenario: inter-unit ties are much more supportive of a model of business groups as strategic portfolios, using internal ties to share information and resources.

Original languageEnglish (US)
Pages (from-to)2630-2652
Number of pages23
JournalManagement Decision
Issue number10
StatePublished - Oct 30 2019
Externally publishedYes


  • Boards of directors
  • Business groups
  • Interlocking directorates
  • Network analysis
  • Ownership

ASJC Scopus subject areas

  • General Business, Management and Accounting
  • Management Science and Operations Research


Dive into the research topics of 'Coordination, control, or charade? The role of board interlocks among business group members'. Together they form a unique fingerprint.

Cite this