The dense web of connections allowed the inner circle to police the corporate ranks and present a unified, middle-of-the-road message to policymakers. Our own research, forthcoming in the American Journal of Sociology, finds that board ties are now too sparse to provide a means for business executives to forge common ground.
CEOs today rarely serve on two or more boards, and, as a result, they no longer have monthly opportunities to hear what peers who support another point of view might think. Those board connections turned out to be a force for political moderation, and annual gatherings in Davos are not enough to replace them.
These researchers argue this weaker network is not necessarily good:
When a single network connected corporate America, executives were forced to listen to opinions from a range of peers. And although the group skewed Republican on average, individual directors held a range of political opinions.
The most well-connected leaders converged on a preference for more moderate candidates and policies and often ended up donating to both parties’ candidates, not just one. The support of this group was useful, if not absolutely essential, for potential presidential candidates, and it is hard to imagine that a putative anti-establishment candidate like Trump would have passed muster.
This seems like a counterintuitive finding: even as academics like C. Wright Mills worried about the power elite, breaking up these networks can also have negative consequences. Many may not like the image of a good old boys network but that group could get things done. This reminds me of some of the research on term limits: many might want more turnover in political offices in order to limit corruption but such efforts can also limit effectiveness of politicians who no longer have the deep knowledge or connections built up over years. What if it turns out that neither outcome – dense corporate board networks or weaker networks – is particularly good? It is probably going too far to suggest that corporate boards should go all together…