Persistence in corporate networks

Abstract

We examine the bipartite graphs of German corporate boards in 1993, 1999 and 2005, focusing on their projections onto directors (the “personal” network) and onto companies (the “institutional” network). The novel feature here is our focus on the temporal evolution of the two projections. The personal networks exhibit cores of highly central directors who are densely connected among themselves, while the institutional networks show a persistent core of large corporations whose identity remains mostly the same. This results in the persistent presence of a core network of very large corporations, despite substantial turnover in the identity of directors and significant changes in Germany’s corporate governance during the investigated period. Our findings strongly suggest that core persistence originates from the board appointment decisions of the very largest corporations and is largely independent of personal destinies.