From Canadian corporate elite to transnational capitalist class: transitions in the organization of corporate power

Canadian Review of Sociology and Anthropology, The, August, 2007 by William K. Carroll

In our 2002 study, Meindert Fennema and I began with a systematic comparison of the global network in the mid-1970s and the later 1990s (Carroll and Fennema, 2002; 2004; 2006). We took up two questions: whether a transnational business community has developed, and whether the Anglo-American corporate governance regime has been diffusing not only to Canada, but internationally, along with neo-liberal globalization. The Anglo-American system has been centred more around the stock market and the quest for shareholder value than around relationship-based finance and patient money. In a system of corporate governance that is stock market-oriented and dominated by exit-based strategies, there is little need for interlocking directorates to control or monitor firms. Interlocks are thinner and carried by outside directors, as in Canada today. They become devices more for hegemony--for consensus formation, for building a business community. Three findings stood out from our comparison of the global network of corporate interlocks in 1976 and 1996:

1. In the closing decades of the 20th century, ties among the world's largest corporations continued predominantly to respect national borders. There was no massive shift from a national to a transnational pattern of interlocking, but only a modest increase in cross-border interlocking. The process of transnational class formation did not fragment national corporate networks, but occurred along with their reproduction; thus, the transnational network formed a thin superstructure atop rather resilient national bases. However,

2. There was a loosening of the global network, a decline in strong interlocks involving corporate executives or multiple directors, which may reflect a tendency toward exit-based rather than voice-based corporate governance. Even so, the basic contrast between Anglo-American and European business systems remained evident at the century's close, with the Continental European segment more highly organized than the Anglo-American one. Finally,

3. Transnational linkers were increasingly uninvolved in managing specific corporations. As outside directors, they functioned as organic intellectuals within the global corporate elite. This supports the thesis that transnational interlocking is less about intercorporate strategic control than it is about constructing a global business community.

What is additionally striking is the extent to which this community remained centred on the North Atlantic. This is not surprising in view of the economic, political, cultural and geographical forces that in the second half of the 20th century produced an "Atlantic ruling class" (van der Pijl, 1984) under American hegemony, but it underlines a certain disjuncture between class formation as a socio-cultural process and the economic process of accumulation. The reach of today's TNCs and of financial markets may be global, but the governance of corporations and the life of the haute bourgeoisie remain in important ways embedded in national and regional (including transatlantic) structures and cultures.