Business Council

https://whorulesamerica.ucsc.edu/power_elite/interlocks_and_interactions.html

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enlarged corporate network also includes companies that were formed to liquidate bankrupt companies, such as BB Liquidating, which sold the remaining assets of Blockbuster Video to Dish Network in April, 2011, for $233 million. There's also upcoming companies such as Take-Two (T2), a major producer of interactive entertainment software, including Grand Auto Theft, whose four directors, all major investors, are collectively members of 48 other corporate boards.

Studying the 222 members of the Forbes 400 in the corporate network, 71 of whom are directors of 65 different Fortune 500 companies, also leads to new findings. For example, the J3SG.com information reveals that Bill Gates, #1 on the Forbes 400 list, and Warren Buffett, #2 on the billionaire list, are far more than the major owners of Microsoft (#36 on the Fortune 500) and Berkshire Hathaway (#11 on the Fortune 500). Both of them are also "insiders" in smaller public companies as well, as shown by Table 2. It is also noteworthy that Gates serves on the board of Buffett's Berkshire Hathaway and that Buffett is a trustee of the Bill and Melinda Gates Foundation, which is by far the largest foundation in the United States.

As a final step in building the corporate network, we added the leaders of six major corporate policy-discussion and leadership groups: the Business Roundtable, the Business Council, the Committee for Economic Development, the National Association of Manufacturers, the U.S. Chamber of Commerce, and the Conference Board. We found that the members of these six groups tended to come from major corporations; overall, 239 of the Fortune 500 companies in our database had at least one link to one of the six groups. Other members of these six groups were on the Forbes 400, or were owners or directors from large "privately held" corporations (which means their stock is not traded on any stock exchange) and financial companies (especially hedge funds).

Table 3 presents the number of members in four of the six main business groups and the percentage of those members who were directors of at least one of the Fortune 500 companies in the corporate network. Note the dramatic difference between the conservative Business Roundtable and Business Council on the one hand and the ultraconservative National Association of Manufacturers and the U.S. Chamber of Commerce on the other, which may tell us something about their relative importance.

As can be seen, the Business Roundtable and National Association of Manufacturers have about the same number of members (209 vs. 224), and so too for the Business Council and the U.S. Chamber of Commerce (132 vs. 139). Nevertheless, the Business Roundtable and the Business Council have many more connections with large corporations than do the National Association of Manufacturers and the U.S. Chamber of Commerce. More specifically, the combined 271 members of the Business Roundtable and the Business Council, which includes the 70 members they share in common, had direct connections to 386 other organizations in the overall network. Although most of the connections are to corporations, including such well-known names as IBM, Citgroup, DuPont, General Electric, American Express and Verizon, there are also direct connections to 47 other organizations (the other four business leadership groups, nine think tanks, four foundations, 27 universities, and seven government advisory committees).

Then, too, the shared members among the six business leadership groups generate a revealing network, as seen in Figure 4. It shows, as might be expected from the results we just presented, that the Business Council and Business Roundtable are closely linked at the center of the six-group network. What makes the network even more interesting is the fact that the ultraconservative National Association of Manufacturers and U.S. Chamber of Commerce are on the right side of the network and the mildly conservative Committee for Economic Development is on the left side, which reflects the reality that they are "distant" from each other in a people sense as well as a policy sense. At the same time, the smaller and far less policy-oriented Conference Board, which primarily generates information of use to business and sponsors conferences, appears to be aloof from any policy differences and above the fray.

Figure 2: The network created by interlocks among six major business groups

There's another way to study the interconnections between the corporations and the six major business groups. That's by finding all the corporate executives from any one company who are in one of the six groups, not just the chief executive officer (CEO) and directors in our database. This analysis is of interest because many of the trustees of the U.S. Chamber of Commerce, the National Association of Manufacturers, and the Committee for Economic Development are vice presidents who do not sit on any corporate boards, and hence are not in our database. (The interlocks created by several executives from the same company are called "company interlocks.") We feel confident in making use of company interlocks in our work because it is inconceivable that mere vice presidents who work under the chief executive officer are not part of a closely-knit leadership team given the hierarchical nature of the corporate world. Vice presidents are the eyes, hears, and strong right arms for CEOs that can only be stretched so thin.

After totaling all the company interlocks, there were nine large corporations that had direct connections with four or more of the six groups, including Procter & Gamble with six such interlocks and Aetna and IBM with five. If company interlocks had been included in the network analysis, it might have shown that the six groups are closer than they seem when only CEOs (who are always on the board of directors) and other directors are included. Perhaps it then might be more accurate to say that the Business Roundtable and the Business Council are the organizations for the top dogs in the corporate world, and that the National Association of Manufacturers, the U.S. Chamber of Commerce, and the Committee for Economic Development are at a secondary level, since they are directed by vice-presidents of the biggest companies and the CEO's of smaller companies. It is at this point that interviews and a careful reading of newspapers and documents in organizational archives would become imperative in order to have a richer picture of the relationships among the organizations in this network. This example therefore warns us about one of the limitations of relying exclusively on network analyses alone to understand the business world.

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policy network