Interlocking directorates and different power forms: An explorative analysis in the Italian context

The purpose of the present paper is twofold. The first is to update the contribution by Drago et al. (2011) about cross-shareholdings and interlocking directorates in Italian listed companies (FTSE MIB) to 31 December 2016 and to reinforce theory of enlarged collusion. The second is to find how interlocking directorates can contribute to understanding the power structure. By using the social network analysis, we map the network structure of interlocking boards and employ centrality measures like degree, eigenvector and betweenness centrality along with the network density and average degree. We interpret eigenvector centrality as a measure of “effective power” of the connections because it can be seen as a weighted sum of not only direct connections but indirect connections, while betweenness centrality as a measure of “potential power” because it is a proxy of the volume of information that passes through the nodes. In this way, we provide a framework for selecting Italian firms with effective and potential power – around whom interactions and processes can be traced and analysed. In addition, we find that the position assumed by the controlling group of the Mediobanca Galaxy is definitely downsized.