Family Firms and the Contingent Value of Board Interlocks: The Spanish Case

Abstract

In the last three decades, interlocking directorates have become a prominent area of research in the Corporate Governance literature. An interlocking directorate is created when a person affiliated with the board of directors of one organization sits on the board of another organization (Mizruchi, 1996). Over the years, researchers have studied the embeddedness of commercial banks, insurance companies and industrial corporations in the interlocking directorates (e.g., Davis and Mizruchi, 1999; Davis, Yoo and Baker, 2003; Mintz and Schwartz, 1981; Windolf, 1998). Furthermore, scholars have sought to provide direct evidence of the value that interlocking directorates have for corporations. Previous studies showed that interlocking directors affect organizational learning (see, e.g., Haunschild, 1993, 1994), the corporations’ power and status (e.g., Davis and Robbins, 2004). Resource dependence theory argues that firms use board ties to manage their resource interdependencies (Pfeffer and Salancik, 1978), for instance, when banks directors sit on the boards of the companies to which they have lent financial resources (Davis and Mizruchi, 1999; Mizruchi, 1996). However, most studies on interlocking directorates have studied primarily US-based public companies and neglected the role of family firms in these networks.