Interlocks or Ownership: New Zealand Boardroom Power

Abstract

Interlocks - so what do they add to an understanding of the power of the boardroom? Here it is argued that the sociological study of interlocks (that is, the links created by a director who is on the board of more than one company or organization) will reveal some but not all dimensions of corporate power. The study of directional interlocks (using only board members from primary organizational positions) will reveal the following traceries of power: first, a map showing inter-firm power links; second, the direction of the flow of corporate information. Third, the links will identify which sector (e.g. productive, financial or service) is at the political center of business relations. A case study of New Zealand big business is chosen here to illustrate the centrality of interlocks. It is shown that industrial companies dominate the interlocking network with the most heavily interlocked director being (verified through other sources) class leaders. However, a triangulation of the interlock data with ownership data from annual company reports, shows that ownership of the means of production is still the key to power relations in this context. The ownership of top companies in New Zealand is, primarily, in the hands of a consortium of overseas finance capital.