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Interlocking Directorates Of Transnational Corporations

In modern society, it is evident that the globalization of business worldwide has had an effect on production possibilities. Globalization can have a very positive outcome on developing countries, and can be seen as first world nations lending a helping hand to economically suffering countries. However, companies that expand to a multinational level have been accused of exploiting lower income nations. North America is so advanced economically, that companies have been able to understand how to capitalize on international business opportunities. The board of directors of multinational corporations have power and control when deciding how to maximize business profits. “One consequence of the global economy is that a small number of businesses, operating internationally, now control a vast share of the world’s economic activity. According to one estimate, the six hundred largest multinational companies account for one half of the world’s economic output” (Kidron & Segal, 1991). It has been proven advantageous for companies to network with one another to maximize earnings and benefits.
A company’s board of directors is elected by and responsible to shareholders, but also stakeholders in the company, such as it’s employees and business associates. The board monitors the performance of the CEO and senior management to ensure shareholders’ interests are being served. The board must confirm that the CEO is providing effective leadership for the company both long and short term. As a CEO of a company that is constantly being evaluated by the company’s board, one must prove that his/her greatest concern is for the profit of the company’s shareholders. This implies that the CEO would do whatever he/she could do in order to maximize profitability. One avenue for this, is a global market structure.
Globalization can be an issue for any company with a large number of employees and breadth of countries in which they work. The global industry trend to relocate...