The rise of the European corporate elite: evidence from the network of interlocking directorates in 2005 and 2010

Abstract

The emerging European corporate network is becoming increasingly established. Here I compare the network of board interlocks among the largest stock listed European firms in 2005 and 2010. The findings show that, by 2010, the European network of corporate board interlocks was stronger than five years earlier. Whereas the European political elite was unable to counter the financial crisis through a common European approach, Europe is a fait accompli for the corporate elite. An analysis of the robustness of the network, its core, the central directors and the political geography suggests that there is a structural basis for overcoming the present Euro crisis that has been handled primarily at the political level.

Keywords:

• business elites
• interlocking directorates
• corporate governance
• networks
• board of directors
• European Union

Acknowledgements

Earlier versions of this paper have been presented at the 23rd SASE annual conference in Madrid, the 4th annual Political Networks conference in Ann Arbor, the 2011 Politicologen Etmaal in Amsterdam and the Global Economics Seminar at the University of Groningen. I am indebted to the participants in these meetings, as well as to Robert Mokken, Meindert Fennema, Froukje Demant and three anonymous reviewers for their comments and suggestions. Part of this research received funding from the Netherlands Organization for Scientific Research (NWO).

Notes

1. In 2005, the eight connected firms that were not part of the dominant component formed four distinct dyads. Four of these eight firms are also present in 2010, although only two are connected in the dominant component of 2010. In 2010 there is one dyad outside the dominant component, with one firm that was also present in 2010. Except for these cases, the consistently dominant firms are all part of the dominant components.

2. First, the location by latitude and longitude was established for all the headquarters of the corporations. Subsequently these location data were used to calculate the distance using the following formula: distance =ACOS(COS(RADIANS(90-Lat1)) *COS(RADIANS(90-Lat2))+SIN(RADIANS(90-Lat1))*SIN(RADIANS(90-Lat2)) *COS(RADIANS(Long1-Long2))) *6371.