Eelke M. Heemskerk

The Corporate Elite Community Structure of Global Capitalism

A key debate on the merits and consequences of globalisation asks to what extent we have moved to a multipolar global political economy. Here we investigate this issue through the properties and topologies of corporate elite networks and ask: what is the community structure of the global corporate elite? In order to answer this question, we analyse how the largest one million firms in the world are interconnected at the level of corporate governance through interlocking directorates. Community detection through modularity maximisation reveals that regional clusters play a fundamental role in the network architecture of the global political economy. Transatlantic connections remain particularly strong: Europe and North America remain interconnected in a dense network of shared directors. A distinct Asian cluster stands apart as separate and oriented more towards itself. While it develops and gains economic and political power, Asia remains by and large outside the scope of the networks of the incumbent global (that is, North Atlantic) corporate elite. We see this as a sign of the rise of competing corporate elites. But the corporate elites from the traditional core countries still form a powerful opponent for any competing faction in the global corporate elite.

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.

Network dynamics of the Dutch business elite

This article investigates the cohesion of the Dutch business elite during the 20th century. First it considers the old boys’ network, where social cohesion builds on shared family and educational background. Second, the board-meeting network of corporate directors in the Netherlands is analysed as an expression of the cohesion of the corporate elite. Unlike most studies on interlocking directorates, this article focuses on the interpersonal perspective of the network instead of the intercorporate perspective. The study finds that social cohesion declined between 1976 and 2001. The meeting network of the Dutch corporate elite has become the realm of brokers rather than a device of social cohesion and social closure. It no longer serves the purpose of creating trust among the corporate elite. As a result, norms of corporate governance have become blurred.

The community structure of the European network of interlocking directorates 2005-2010.

The boards of directors at large European companies overlap with each other to a sizable extent both within and across national borders. This could have important economic, political and management consequences. In this work we study in detail the topological structure of the networks that arise from this phenomenon. Using a comprehensive information database, we reconstruct the implicit networks of shared directorates among the top 300 European firms in 2005 and 2010, and suggest a number of novel ways to explore the trans-nationality of such business elite networks. Powerful community detection heuristics indicate that geography still plays an important role: there exist clear communities and they have a distinct national character. Nonetheless, from 2005 to 2010 we observe a densification of the boards interlocks network and a larger transnational orientation in its communities. Together with central actors and assortativity analyses, we provide statistical evidence that, at the level of corporate governance, Europe is getting closer.

Where is the global corporate elite? A large-scale network study of local and nonlocal interlocking directorates

Business elites reconfigure their locus of organization over time, from the city level, to the national level, and beyond. We ask what the current level of elite organization is and propose a novel theoretical and empirical approach to answer this question. Building on the universal distinction between local and nonlocal ties we use network analysis and community detection to dissect the global network of interlocking directorates among over five million firms. We find that elite orientation is indeed changing from the national to the transnational plane, but we register a considerable heterogeneity across different regions in the world. In some regions the business communities are organized along national borders, whereas in other areas the locus of organization is at the city level or international level. London dominates the global corporate elite network. Our findings underscore that the study of corporate elites requires an approach that is sensitive to levels of organization that go beyond the confines of nation states.

Uncovering Offshore Financial Centers: Conduits and Sinks in the Global Corporate Ownership Network

Multinational corporations use highly complex structures of parents and subsidiaries to organize their operations and ownership. Offshore Financial Centers (OFCs) facilitate these structures through low taxation and lenient regulation, but are increasingly under scrutiny, for instance for enabling tax avoidance. Therefore, the identification of OFC jurisdictions has become a politicized and contested issue. We introduce a novel data-driven approach for identifying OFCs based on the global corporate ownership network, in which over 98 million firms (nodes) are connected through 71 million ownership relations. This granular firm-level network data uniquely allows identifying both sink-OFCs and conduit-OFCs. Sink-OFCs attract and retain foreign capital while conduit-OFCs are attractive intermediate destinations in the routing of international investments and enable the transfer of capital without taxation. We identify 24 sink-OFCs. In addition, a small set of five countries – the Netherlands, the United Kingdom, Ireland, Singapore and Switzerland – canalize the majority of corporate offshore investment as conduit-OFCs. Each conduit jurisdiction is specialized in a geographical area and there is significant specialization based on industrial sectors. Against the idea of OFCs as exotic small islands that cannot be regulated, we show that many sink and conduit-OFCs are highly developed countries.

Centrality in the global network of corporate control

Corporations across the world are highly interconnected in a large global network of corporate control. This paper investigates the global board interlock network, covering 400,000 firms linked through 1,700,000 edges representing shared directors between these firms. The main focus is on the concept of centrality, which is used to investigate the embeddedness of firms from a particular country within the global network. The study results in three contributions. First, to the best of our knowledge for the first time we can investigate the topology as well as the concept of centrality in corporate networks at a global scale, allowing for the largest cross-country comparison ever done in interlocking directorates literature. We demonstrate, among other things, extremely similar network topologies, yet large differences between countries when it comes to the relation between economic prominence indicators and firm centrality. Second, we introduce two new metrics that are specifically suitable for comparing the centrality ranking of a partition to that of the full network. Using the notion of centrality persistence we propose to measure the persistence of a partition’s centrality ranking in the full network. In the board interlock network, it allows us to assess the extent to which the footprint of a national network is still present within the global network. Next, the measure of centrality ranking dominance tells us whether a partition (country) is more dominant at the top or the bottom of the centrality ranking of the full (global) network. Finally, comparing these two new measures of persistence and dominance between different countries allows us to classify these countries based the their embeddedness, measured using the relation between the centrality of a country’s firms on the national and the global scale of the board interlock network.

The fading of the state: Corporate–government networks in the Netherlands:

This article contributes to an understanding of how business–state relations have evolved over past decades by analyzing elite interlocks between the corporate sector and the state over the period 1969–2006 in the Netherlands. These interlocks create links between the top decision centers of the largest corporations and public administration. A comparative analysis over time of the network of corporate–state interlocks for the years 1969, 1996 and 2006 reveals that ties that were very frequent in 1969 are in decline, reflecting and confirming a rapid disentanglement of the corporate sector from what was until the 1980s an example of neo-corporatist socio-economic arrangement. The disappearance of industrial policy, privatization of state-owned corporations, the emergence of autonomous administrative units, and the ‘hollowing out’ of the state, all contribute to the fading of the state. The network structure that remains in place – albeit thin – is not dominated by either the state or business but rather a partnership between separate forces. At the same time many of the previous state–business relations are now established outside the span of control of the state. The state is left out. Our study suggests that by the time the financial crisis hit in 2007, the social fabric making for fruitful state–business cooperation was gone.

Close Communication and 2-Clubs in Corporate Networks: Europe 2010

Corporate networks, as induced by interlocking directorates between corporations, provide structures of personal communication between their boards. This paper studies such networks using the framework of a previous paper by Laan et al. (Soc Netw Anal Min, 2016. doi:10.1007/s13278-016-0326-0) where close communication is defined by sub-networks, so that each pair of nodes (boards of a corporation) are either neighbours or have at least one common neighbour. These correspond to sub-graphs of diameter at most 2, designated by us earlier as 2-clubs of three types (coteries, social circles and hamlets), and conform three levels of close communication in social networks. They are all contained within the disjoint boroughs of a network, supercommunities which envelope all close communication between nodes of a network. This framework is applied here to an analysis of corporate board interlocks between the top 300 European corporations 2010, using the data from an earlier study by one of us (Heemskerk in Econ Soc 42:74–101, 2013). While the results corroborate the main findings of the earlier studies, our approach also uncovers additional, thus far unrevealed patterns. A single dominant European borough with the Francophone network as its centre and that of Germany only regionally and internally connected. The UK business elite on the other hand is very present and prominent in this European structure of corporate close communication.

Wat maakt goed onderwijsbestuur? De gedragsmatige determinanten van taakuitvoering door raden van toezicht in het voortgezet onderwijs

What determines good educational governance? Behavioral determinants of supervisory boards’ task performance in secondary education. We investigate how task performance by supervisory boards in secondary education is determined by the social dynamics that play within a board. We show how the controlling task plays out different from the advising task. The internal, behavioral dynamics about task conflict, the use of expertise, effort norms and social cohesion all determine the task performance. The outcomes of a survey study among all secondary schools in the Netherlands serves as the empirical underpinning for a process oriented model of good educational governance. As such we contribute to the emerging literature on behavioral governance. Implications of our study includes that anticipating governance that combines both the controlling and the advising task is best served by diversity of ideas and opinions within a board. Particularly since task conflicts in supervisory boards do not lead to less but rather to more social cohesion.