Board interlocking network in the Brazilian stock market : a hypothesis on the conflicting manager

Abstract

Brazilian law establishes a set of provisions regarding the defense of competition, usually with a dissuasive effect on the conflicting performance of the multi-company manager. However, research highlights that practices such as interlocking directorates (i.e., interconnected directorates with board members operating in multiple companies) are widespread, especially in the stock market. The present article explores this paradox by analyzing a social network of 347 Brazilian listed companies. An E-I (externalinternal) index and a permutation test are used to verify the occurrence of direct and indirect intermediation within and among economic sectors. The paper advances towards a hypothesis on the effectiveness of the Brazilian antitrust legislation.