What Is The Definition Of Interlocking Directorates?
What Is The Definition Of Interlocking Directorates?. Boards of directors of different firms that have one or more of the same people serving as directors. The concern is that officer or director interlocks between competitors could result in inappropriate coordination or the sharing of competitively sensitive information, in violation of antitrust laws.
Interlocking directorate the relationship that exists between the board of directors of one corporation with that of another due to the fact that a number of members sit on both boards and, therefore, there is a substantial likelihood that neither corporation acts independently of. The concern is that officer or director interlocks between competitors could result in inappropriate coordination or the sharing of competitively sensitive information, in violation of antitrust laws. However, when the firms that a board director serves are mutual competitors, the waters become a little murky.
Legal Definition Of Interlocking Directorate.
Interlocking directorate refers to the practice of members of a corporate board of directors serving on the boards of multiple corporations. The interlocking directorate is an organizational mechanism for the control and coordination of actions of firms in business groups, and it may be found in conjunction with any of the other solidarity mechanisms (granovetter 1994: Interlocking directorate refers to the practice of members of a corporate board of directors serving on the boards of multiple corporations.
Interlocking Directorates Is A Business Practice Wherein A Member Of One Company's Board Of Directors Also Serves On Another Company's Board Or Within Another Company's Management.
What does interlocking directorate mean? The purpose of section 8 is therefore to. Interlocking directorates does not prevent a board director from serving on a client's board.
Because The Same Persons Occupy Seats On The Boards Of Companies That Are Supposed To.
Boards of directors having some members in common, so that the corporations concerned are more or less under the same co. In simple terms, board directors who accept positions on the boards of two or more companies are called interlocking directorates. Interlocking directorates is a business practice wherein a member of one company’s board of directors also serves on another company’s board or within another company’s management.
The Concern Is That Officer Or Director Interlocks Between Competitors Could Result In Inappropriate Coordination Or The Sharing Of Competitively Sensitive Information, In Violation Of Antitrust Laws.
Interlocking directorate the relationship that exists between the board of directors of one corporation with that of another due to the fact that a number of members sit on both boards and, therefore, there is a substantial likelihood that neither corporation acts independently of. Since the two companies are competitors, they would have violated antitrust laws if they had not taken steps to separate their boards. Boards of directors of different firms that have one or more of the same people serving as directors.
Under Most Circumstances, That Arrangement Is Legal And Perfectly Acceptable.
Interlocking directorates are illegal among competing firms. § 19, prohibits “interlocking directorates.”. Interlocking directorates definition at dictionary.com, a free online dictionary with pronunciation, synonyms and translation.
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