Determinants of Board Interlocking in the Brazilian Capital Market

The objective in this article was to identify the main determinants of Board Interlocking in the Brazilian capital market. As the theoretical structure, the Agency theory and Corporate Governance, the Resource Dependence theory and the Board of Administrators and the Characteristics of Board Interlocking. The sample consists of 58 Brazilian companies that participate in the Bovespa Index (Ibovespa). An empirical analytic study was undertaken. With regard to the objectives, it is characterized as exploratory and, with regard to the procedures, a documentary research was undertaken. The data on the Boards of Administrators were collected from the Reference Forms available on the website of the São Paulo Stock Exchange (BM&FBOVESPA). The results found demonstrate the generalized presence of Board Interlocking in these companies, normally associated with four factors: (1) economic group formation; (2) governmental control; (3) formation of pension funds; and (4) presence of professionals with acknowledged market experience. The results also suggest that the first three factors give rise to long-lasting links and that these connections are hard to break. On the other hand, the links established through professionals with market experience tend to be more unstable because the presence of these professionals is highly demanded to serve on the board of different companies