French connection: interlocking directorates and the ownership-control nexus in an insider governance system

Tristan Auvray () and Olivier Brossard ()
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Tristan Auvray: CEPN - Centre d'Economie de l'Université Paris Nord - UP13 - Université Paris 13 - USPC - Université Sorbonne Paris Cité - CNRS - Centre National de la Recherche Scientifique
Olivier Brossard: LEREPS - Laboratoire d'Etude et de Recherche sur l'Economie, les Politiques et les Systèmes Sociaux - UT Capitole - Université Toulouse Capitole - UT - Université de Toulouse - UT2J - Université Toulouse - Jean Jaurès - UT - Université de Toulouse - Institut d'Études Politiques [IEP] - Toulouse - ENSFEA - École Nationale Supérieure de Formation de l'Enseignement Agricole de Toulouse-Auzeville

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Abstract: We reveal the non-separation of ownership and control for multiple blockholders in the French insider governance system. We show that overlapping directorships of large listed corporations are explained by their ownership connections. Both large and small stakes, from 20% to 1% of cash-flow rights or voting rights, have high explanatory power. Some shareholdings are control rather than monitoring related. We provide evidence also that cross-ownership allows CEOs to entrench themselves. Finally, we demonstrate that causality goes from ownership to interlocking directorates, for both unilateral stakes and cross-shareholdings.

Keywords: Corporate Governance; Ownership networks; Board interlocks; Multiple blockholders (search for similar items in EconPapers)
Date: 2013-05
Note: View the original document on HAL open archive server: https://hal.science/hal-00842582v1
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