Defining the Social Capital of the Board of Directors: An Exploratory Study

ABSTRACT This paper advances the resource dependence and social networks literature by investigating a board's structural social capital created as a consequence of interlocking directorates. Using approaches and measures developed by social network analysis we compare the interpersonal directo...

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Bibliographic Details
Published in:Journal of management & organization 2004-01, Vol.10 (1), p.54-72
Main Authors: Nicholson, Gavin J., Alexander, Malcolm, Kiel, Geoffrey C.
Format: Article
Language:English
Subjects:
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Boards of directors
Corporate governance
Directors
Interlocking directorates
Social capital
Social network analysis
Social networks
Studies
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Summary:ABSTRACT This paper advances the resource dependence and social networks literature by investigating a board's structural social capital created as a consequence of interlocking directorates. Using approaches and measures developed by social network analysis we compare the interpersonal directorship networks of the top 250 companies in the United States and Australia. We find that the smaller, sparser Australian network is only marginally less compact and connected than the larger US network at the firm level of analysis. However, at the director level of analysis the US network is much larger and more connected than its Australian counterpart. As a result, we argue that scholars studying the resource dependence role of boards should consider using measures of interpersonal links as well as traditional measures of inter-firm links.
ISSN:1833-3672
1839-3527
DOI:10.1017/S1833367200004612