Understanding theoretical orientation and consequences of board interlock: Integration and future directions

Abstract

Board interlock represents a phenomenon where organizations are connected via overlapping board members and executives. Board interlock is an important area of research in governance study because of its potential to impact governance outcomes through the flow of information, resources, and status. Despite its potential significance, the role of board interlock in governance has not been explicitly discussed in the nonprofit board governance literature. I review and synthesize corporate and nonprofit board governance literature and link this literature to the study of board interlock. Then, I review the extant literature on the antecedents and consequences of board interlock. I conclude by identifying gaps in the literature and proposing directions for future research.

Nonprofit Board Governance Policy Adoption: Toward an Integrated Board Interlock Network and Institutional Perspectives

“…In particular, the role of board interlock has rarely been discussed as potential carriers of governance practices in nonprofit organizations (except for Bloch et al, 2020; Galaskiewicz & Wasserman, 1989; Yoon, 2021). While previous research neglects to take board linkages into account and overlooks the implication of network embeddedness (except for Guo & Acar, 2005; Ihm & Shumate, 2019), this article offers evidence on network presence and network position conferred through interlocking board members.…”

“…Board interlock literature is instructive because it views that actors such as organizations and individuals are socially constructed and embedded in a surrounding context. Board interlock study is a natural extension of board governance research given its theoretical reliance on the role of boards of directors (for synthesis of antecedents and consequences of nonprofit board interlock, see Yoon, 2021). Although scholars are increasingly paying more attention to investigating board interlock in recent nonprofit literature (Esparza & Jeon, 2013;Faulk et al, 2016Faulk et al, , 2017Moore et al, 2002;Paarlberg et al, 2020;Vidovich & Currie, 2012;Willems et al, 2015;Yoon, 2021), they do not explore the question regarding how board linkages such as interlocks shape governance decision-making on board practices (except for Bloch et al, 2020).…”

Whom you connect with matters for transparency: Board networks, political embeddedness, and information disclosure by Chinese foundations

“…Though many studies have examined myriad impacts of interlocking directors on nonprofit organizations (Yoon, 2020), whether and how interlocking board networks influence transparency remains unclear. This study confirms that the size of and position in interlocking board networks affect the extent of information disclosed by foundations.…”

“…Because board interlocks provide a channel for information exchange and learning, disclosure practices adopted by peers are more likely to be imitated by focal foundations. During this process, interlocking directors may serve multiple roles, including monitoring, advisor, and boundary spanner (Yoon, 2020), increasing the board's strategic guidance and monitoring. This study implies that with a board abundant in interlocking directors, foundations can make adaptive responses to environmental demands and thus exhibit a higher level of transparency.…”

The Antecedents of Nonprofit Board Interlock: A Longitudinal Examination on Network Structure, Homophily, and Organizational Attributes

“…A growing number of scholars have begun to explore interorganizational networks via board members in nonprofit organizations. In a recent review of literature on antecedents and consequences of board interlock in corporate and nonprofit sectors, Yoon (2021a) notes that while corporate board interlock studies focus on the role of interlocking board members in channeling information and resources, nonprofit board interlock studies pay attention to investigating the role of interlocking board members in signaling the status of the organizations. For instance, scholars report that interlocking board members influence corporate governance outcomes such as diffusion of management practices by channeling information to top management (Bouwman, 2011; Connelly et al, 2011) and financial performance by improving monitoring effectiveness of the boards (Mizruchi & Stearns, 1994).…”