The Social Organization of the American Business Elite and Participation of Corporation Directors in the Governance of American Institutions

Abstract

Recent analysis suggests that the American business elite is differentiated along an axis. At one end of the axis are those business people who are primary owners or top managers of several major corporations, collectively labeled the inner group, while at the other end are those who are connected with only a single major corporation. It is reasoned that, by virtue of their multiple corporate connections and the resulting transcendence of parochial corporate interests, inner group members would be more often involved in the governance of other institutions than would be other members of the business elite. Institutional governance includes the occupancy of top administrative posts and governing and advisory board positions of three types of institutions: nonprofit, nongovernment organizations, such as economic development and cultural organizations; local, state, and federal agencies; and major business policy associations. Drawing on a set of 2,003 directors of the nation's largest 797 corporations in 1969, and on director biographical information acquired from several sources, this study found that inner group members are substantially more likely, compared with other members of the business elite, to be involved directly in the governance of a range of institutions. Moreover, available evidence also indicates that the higher participation rate of inner group members is at least partly a result of their capacity to mobilize greater corporate resources and their involvement in a common, transcorporate social network. The evidence presented tentatively supports the thesis that the American business elite is differentiated along an inner group axis, at least with respect to the selection of business people to assist in the governance of other institutions. The inner group may be an important source of political leadership capable of promoting the more general interests of the entire capitalist class.