An interlocking director is a person who serves as a director on the boards of two or more companies that have business relationships or shared interests. This arrangement can create connections between organizations, potentially influencing their decisions and strategies. Understanding the role of interlocking directors is important for grasping corporate governance and the dynamics of business relationships.
The term "interlocking director" is primarily used in corporate law. It is relevant in contexts such as corporate governance, antitrust law, and compliance. Interlocking directors may raise legal issues, particularly regarding conflicts of interest and anti-competitive practices. Users may find legal forms related to corporate governance, board resolutions, and compliance documents useful for managing these situations effectively.
Here are a couple of examples of abatement:
Example 1: A director serves on the boards of both a manufacturing company and its supplier. This relationship could influence decisions about pricing and supply contracts. (hypothetical example)
Example 2: A director is on the board of a tech firm and a competing tech startup, which may lead to concerns about sharing sensitive information. (hypothetical example)
Examples of state differences (not exhaustive):
| State | Key Differences |
|---|---|
| California | Strict regulations on interlocking directorates to prevent anti-competitive practices. |
| Delaware | Allows interlocking directors but requires disclosure of potential conflicts of interest. |
| New York | Regulations focus on transparency and potential anti-trust implications. |
This is not a complete list. State laws vary, and users should consult local rules for specific guidance.
| Term | Definition | Key Differences |
|---|---|---|
| Interlocking Director | A director serving on multiple boards of related companies. | Focuses on shared interests and potential conflicts. |
| Corporate Director | A person elected to the board of a corporation. | Does not imply service on multiple boards. |
| Conflict of Interest | A situation where a person's decisions may be influenced by personal interests. | Broader concept, not limited to board service. |
If you are involved with interlocking directors, consider the following steps:
For complex matters, seeking professional legal help is advisable.
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An interlocking director is a person who serves on the boards of multiple companies that have business relationships.