Priority to Group Management Interest and Interlocking Directorates System within the Same Group Management
131 , 2018-02-28
This study identified my critical opinion underlying the prevailing view that outside directorates are considered as an effective vehicle for gaining the enlargement of management performance. These outside director are one form of the interlocking directorates. And interlocking directorates mean a phenomenon in which directorates at the same time sit on more than one corporate board. Its interlocking directorates consist of outside directors and inside directors. The former of interlocking directorates, outside directors, are usually widely accepted and on the overestimated its usefulness in Japan. But excess use of outside directors for interlocking directorates are likely to draw the attention of directors on the focal management performance. Indeed outside directors are a member of directors but not engaged in management itself. As a member of board of directors, they take a responsibility for the supervision of what directors have executed. To the contrary, inside directors who are interlocking directorates within the same group corporations have an important roles in making enlargement of management performance. Finally I conclude that interlocking directorates system which is consisted of inside directors has a significant role especially in group management according to the studies of Germany interlocking directorates group management in Germany.