Directors in Herds: Multiple Interlocks of Taiwan's Corporate Elites

John S. Liu ； Chyan Yang

《企業管理學報》 72期 (2007/03) Pp. 218-247

並列摘要

This study contributes to the corporate governance literature in two aspects. First, it is the first study that explores the multiple interlocks phenomenon of corporate world in detail. Second, it hypothesizes and confirms that the multiple interlocks of boards and directors in corporate Taiwan is formed by controlling shareholders and their associates when these individuals monitor their investments together. Multiple interlocks is formed when a group of corporate elites who sit side-by-side in not just one but on several company boards in Taiwan. Two or more directors sitting on more than one corporate board at the same time is a phenomenon deserves further examination, because it takes a strong strategic intention to form such tight mutual relationships. Sample statistics show that multiple interlocks of corporate boards and directors in Taiwan is not as extensive as that in the U.S. and Australia based on the measurement with a bipartite clustering coefficient. The reason for directors to go in herds is analyzed with binary logistics regression model. We adopt a research unit that includes a pair of boards and a pair of directors. This is different from the common approach that uses either the board or the director as the research unit. Under such a design, we are able to investigate the effects of the attributes of board and directors at the same time and are able to differentiate between multiple interlockers' status on each of the board they serve. Statistical analysis results indicates that directors who control a large amount of effective assets in the corporate world, own a high percentage of equity in a company, or hold an inside management position are more likely to be involved in multiple firm interlocks. Taken together, controlling shareholders and their associates are the main individuals who are involved in multiple interlocks. Finally, company financial performance is negatively correlated with multiple interlocks.

並列關鍵字

Multiple interlocks ； board of directors ； interlocking directorates ； corporate governance ； Taiwan

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