Two or more corporations have interlocking directorates when they share members of their boards of directors or each shares directors with a third firm. A person that sits on multiple boards is known as a multiple director.[1] Two firms have a direct interlock if a director or executive of one firm is also a director of the other, and an indirect interlock if a director of each sits on the board of a third firm.[2]
This practice, although widespread and lawful, raises questions about the quality and independence of board decisions. In the United States, antitrust law prohibits interlocking directorates within the same industry over collusion concerns, though legal observers have noted that this has long been unenforced.[3][4] In 2022, the Department of Justice signaled it would enforce laws on anti-competitive interlocking directorates, leading to the resignation of seven directors at five companies in October 2022.[4]