Amsterdam Institute for Social Science Research (AISSR)

The financial collapse and the impact on corporate elites

17 March 2016

The 2008 financial collapse posed the biggest challenge to the global economy since the Great Depression. Unlike the 30’s the global economic governance system survived. A study of the University of Amsterdam explains how. The results are published in the journal `Global Networks',

Eelke Heemskerk, Meindert Fennema (UvA) and William K. Carroll (University of Victoria) show that global actors did not withdraw into their national business communities after the financial crisis. Instead of securing one’s particular (national) interest, as happened in the 1930’s, corporate elites sought consensus. At all costs a collapse of the world financial system had to be avoided.  

How to measure common understanding among business elites?

The authors take a network perspective to measure consensus among business elites. They investigate the architecture of the social networks that connect business leaders and the decision-making spaces they occupy. The researchers focus on interlocking directorates: members of a corporate board of directors serving on the boards of multiple corporations. 

The authors argue that networks of interlocking directorates serve as channels of communication between directors thus building consensus and direction for change. As such, these networks are the cornerstones of national business communities throughout the world.

Robust transnational networks of interlocking directorates

The study covers four decades of transnational networks of interlocking directorates. While national business communities fragmented, transnational networks remained resilient during these decades. It is striking that already by 1976 the international corporate elite established a social network of interlocking directorates that remains in place today.

From big linkers to single linkers after the financial collapse

Heemskerk, Fennema and Carroll do find that the networks of interlocking directorates have changed. While big linkers (one person occupying many positions) have become an exception, single linkers (corporate elite members with only two positions among firms) are increasingly carrying the network.

From a national to a transnational orientation

The authors conclude that we witness a recomposition of the corporate elite from a national to a transnational orientation. In addition, the network has become less hierarchical and more diffuse.

They forecast that this network may well collapse into a fragmented corporate elite in the near future. An elite that is unable to provide the sort of leadership that could persuasively construct a notion of the general interests of society. The system survived, but for how long?

About the researchers

E.M. Heemskerk

Eelke Heemskerk

Eelke Heemskerk is associate professor of political science at the University of Amsterdam (UvA). Eelke published on corporate governance, corporate elites, social networks and institutional reform in the Netherlands and Europe and directs the CORPNET research group
Profile page Eelke Heemskerk

M. Fennema

Meindert Fennema

Meindert Fennema is emeritus professor in Political Theory at the University of Amsterdam. He published extensively on anti-immigration parties, ethnic mobilisation, political theory and political violence.   
Profile page Meindert Fennema

William K. Carroll

William K. Carroll

William K. Carroll is a critical sociologist at Victoria University with research interests in the areas of social movements and social change as well as the political economy of corporate capitalism. In his current research he investigates the networks, discourses and practices of counter-hegemonic knowledge production and mobilization.
Profile page William K. Carroll

Publication details

‘The global corporate elite after the financial crisis: evidence from the transnational network of interlocking directorates’, Global Networks 16, 1 (2016) 68-88.

Published by  AISSR