Interlocking directorships: How multiple board roles shape governance

THE phenomenon of directors serving on multiple boards, known as interlocking directorships, is one of governance’s most enduring features. Celebrated for connecting organisations to wider networks and knowledge, interlocks are also criticised for perpetuating power imbalances and governance failures. In truth, they are neither good nor bad. Their value depends on how they are governed.

- NQOBANI MZIZI

Boards face a central question: when do interlocks enrich governance, and when do they undermine it, if ever?

In an era where scrutiny of boards has never been higher, interlocking directorships raise questions about fairness, inclusivity and accountability.

Shareholders, regulators and the public increasingly want to know not only who sits on boards, but how many other commitments they carry and what networks shape their judgement. This is no longer a niche governance debate; it goes to the heart of legitimacy.

Interlocks can bring tangible benefits. Directors exposed to multiple sectors often act as conduits for knowledge transfer. A board member who has sat through debates on cybersecurity at a financial institution may raise the alarm more quickly when similar risks appear on a retail or utility board.

Likewise, interlocks broaden access to networks, giving companies informal pathways to capital, partnerships or policy insights.

Exposure to multiple industries sharpens oversight, helping directors spot trends earlier than peers in isolated contexts.

Yet these very features that make interlocks valuable: shared knowledge and overlapping networks, can also become liabilities when governance falters.

When the same individuals dominate boardrooms, groupthink thrives. Directors recycle familiar arguments and avoid challenging colleagues they meet across multiple tables. Conflicts of interest also loom large, particularly in overlapping sectors. A director might hesitate to press management on a competitive risk if it touches on another company wherethey hold a seat.

Power can become concentrated in a small club of individuals, limiting the entry of new voices and perspectives that are vital for diversity and transformation. Worse still, reputational contagion means that if a director is implicated in a failure on one board, the taint spreads to every other board on which they serve.