Interlocking Directorates

Got global corporate skull and bones conspiracy theory on the brain? Well, you’ll need it when you think about this term.

An interlocking directorate happens when a number of companies share directors, so that each company is, uh…friendly with the other. The heyday of interlocking directorates was the Rockefeller Era, when the former wealthiest man in the world wanted to control more or less everything in and around Big Oil. The discovery, the drilling, the storage, the distribution, etc.

So there was the Rockefeller interlocking directorate, with about 9 white men on each board. And yes, in those days they were all white and all men. Three of them on his board, overseeing the Rockefeller holdings in drilling would also be on the board of his company holdings in oil storage. And these other three who sat on his oil storage board would also sit on his train, plane, and automobile distribution businesses.

The boards were interlocked to ensure that each of the vertically integrated monopolies played nice with each other. And the party raged on.

Interlocking directorates get a lot of grief in the U.S., or at least they did. And that's noteworthy, because in Japan, Korea, and other countries which make big products like cars and washing machines and cell phones that are competitive with the big U.S. companies, interlocking directorates are the norm.

"Norm!" (CUT TO: shot from Cheers)

If gravity still exists, over time, those interlocking directorates carry a structural advantage over the U.S. system, which is sorta every company for him-or-herself.

Interlocking directorates are not necessarily evil; they’re just a component of a globally competitive industry, where the structure of company ownership needs to reflect the basic concept that each share of common stock could and should carry one vote.