Corporate boards, interorganizational ties and profitability: The case of Japan

We analyze the ties between 4,000 Japanese corporations in the time period from 2004 until 2013. We combine data about the board composition with ownership relationships and indicators of corporate profitability. We find that both the network of corporate board interlocks as well as the ownership network show a high degree of persistence. The overlap between these two networks is surprisingly small. In the analysis of the board composition we find that the number of outside board members is low yet increasing. Firms with large foreign shareholdership are at the forefront of this development. Upon retirement board members in central positions are replaced with similarly central executives, maintaining the general structure of the network. Women in corporate boards remain scarce. The connectivity of firms in the ownership and board network can be related to firm profitability. Firms that are linked to peers with above average profitability are likely more profitable than firms in other relationships.