Who Killed the Inner Circle? The Breakdown of the American Corporate Elite Network, 1999-2009

This paper analyzes the properties of the board interlock network connecting the largest American corporations between 1999 and 2009. We find that the former stability of the network—in which a handful of banks and multinationals held positions at the center, a few dozen directors served on a large number of boards, and thus the distance between any two companies or directors was short—has largely collapsed during the past decade. There is no longer a stable core of companies that reliably occupies a center, and the mean geodesic has gone up continuously since 2002. The proximal cause is that no cohort of super-connector directors has arisen to take the place of those who have retired. This contrasts with prior generations, in which ambitious individuals sought out multiple board seats for the benefits they provided in status, business connections, and monetary compensation. We speculate that the Sarbanes-Oxley Act, along with other corporate governance reforms, has made serving on several boards costly, resulting in the decline in one of sociology’s most-studied networks