all interlocks l. Breadth h Depth Centrality. Pacific Dunlop. 10. 4. 5. 8. CRA. 9. 3. 3. 4. CSR .... in Pacific Dunlop, and 26,838 in CSR. However .... Rio Tinto Plc-49.
Interlocking Directorates: What Do They Tell About Corporate Power in Australia i
Georgina Murray Humanities Griffith University Nathan
Abstract How do interlocks effect the integration of the Australian capitalist class? Here it is argued that the sociological study of interlocks (that is, the links created by a director who is on board of more than one company or organization) reveals some but not all dimensions of corporate power. The study of directional interlocks (using only board members from primary organizational positions) reveals the following traceries of power: first, a map showing inter-firm power links; second, these links also indicate the direction of the flow of corporate information; third, the links indicate which sector (e.g. productive, financial or service) is at the political centre of business relations. In the Australian big business case studies (1992 and 1998) chosen to illustrate the centrality of interlocks it is shown that industrial companies dominate the formation of top corporate social links. It is hypothesized that the most heavily interlocked director is a ruling class leader who acts to ingratiate the capitalist class with the state, but interlocking directorates also act to integrate the ruling class as a whole and to keep the class positioned advantageously in regard to its global objectives. Triangulation of the interlock material with both interviews and company ownership data shows some support for this. The most significant finding is the observance of two levels of power; the first is political and is reflected in the clusters of industrial interlocking company directorates, and the second is economic, in which the ubiquity of finance capital gives it dominance and control over the former.
Key words directional interlocks, collusion, cohesive capital, cartels, social embeddedness, social structure, finance capital ubiquity.
Introduction What can a political economic analysis of interlocking board membership give that a glossy business magazine will not? A thoughtful political economic perspective on interlocks should reflect on the power relations underlying business, as well as describing the inter-board member relationships. An interlocking directorate means having a director of your company board sitting on another firm’s board, thereby being in a position to feed back information from a wide corporate environmental scan. This information can keep your board aware and strategically poised as to other’s firms’ likely actions. This article argues that a study of interlocks needs to look at two levels - the corporate politics of interlocking director clusters and their radiating networks, and the economic power that derives from having a dominant share ownership in the company. These levels have to be examined simultaneously if we are to get a coherent picture of business.
1
This article examines interlocks in the top thirty Australian companies. It begins with a summary of the interlock literature. Primary data from annual company reports is then used to test hypotheses arising from the literature and interviews that have been done with directors 1 . Finally, there is a discussion on the interpretation of these patterns and their significance for political economy.
Why Interlocks are Important Three excellent summaries of the interlocking data literature (Scott, 1985, Glasberg, 1987, Mizruchi, 1996) show why the study of interlocks is important. These theorists classify perspectives on interlocks into four groups according to the emphasis on 1) control, 2) collusion 3) discretion and 4) social embeddedness. Two traceable threads underlie these perspectives. The first, emphasizing control is Weberian and it aims to provide independent motives for the actions of interlocking directors. These Weberian-based theorists want us to see the issue of interlocking as one of managers’ control and power rather than ownership or class collusion. Power is treated as multifaceted because it resides with many shareholders rather than capitalistowners. The companies that managers control are characterized as relatively democratically run, in ways that are answerable to the wider community, and diversely owned by ‘mum and dad’ share-holders.
A hypothesis taken from this model is that if ownership is no longer fundamentally significant then managers (unlike owners) are free to be civically responsible and not motivated by just economic self-interest.
The second thread is Marxist and includes the majority of theorists that write in groups two, three and four. These theorists are generally critical of the role of capital and see interlocking boards as a strategy to reproduce advantage and further exploit workers and/or consumers. The collusive model looks at interlocks as structural mechanisms that cement collusion and subsequently help the development of business cartels. Hilferding in Finance Capital (1910) worked on material provided by Jeidels (1905) to find why “if you took possession of six large Berlin Banks [it] would mean taking possession of the most important spheres of large scale industry” (op cit, 1910:368). He saw bank interlocks as the vital dynamic within this system of 1
These interviews with top business directors were part of a 1992 study and were part of the data gathered in conjunction with work done with Dr. Malcolm Alexander using an ARC Large Grant called Economic Power in Australia.
2
collusion. Banks were shown to act to make finance capital dominant in early twentieth century capitalist Germany (also see Lenin, 1916 or Fenemma and Schijf, 1979). According to Hilferding (1910: 225) finance capital is an [E] ver increasing part of the capital of industry, [it] does not belong to the capitalists who use it. [Industrialists] are able to dispose of capital only through banks, which represent the owners. On the other side, the banks have to invest an ever-increasing part of their capital in industry. [Finance capitalism gives] rise to a desire to establish a permanent supervision of company affairs, which is best done by securing representation on the boards of directors. This ensures, first, that the corporation will conduct all its financial transactions associated with the issues of shares, through the bank. Second, in order to spread risks and to widen business connections, the bank tries to work with as many companies as possible, and at the same time to be represented on their board of directors.
Hilferding’s central argument is that the most significant development facing capitalism is the concentration of banking and industry. Having bank representatives on the productive companies’ boards establishes permanent supervision of the companies’ affairs and protects the ownership interests of banks.
Australian collusive interlock research, though scarce, includes the pioneering work of Wheelwright (1957, 1967) and his student Rolfe. In Rolfe’s (1967) study of fifty top companies, banks and insurance companies were found to have the biggest spread of directors, and chairmen were their key links. Higley et al, in Elites in Australia (1979) studied 79 of the largest companies and found all but 19 of these companies were interlocked and the density of their interlocks paralleled the pattern of dominance in business lobby groups.
One hypothesis that this collusive model offers is that if bank ownership in the top companies is high this will be reflected in dense patterns of interlocks between banks and industrials.
Another bank-centered model is the discretionary model. Finance capital’s discretion, in controlling the direction of lending, is the key to understanding the role of interlocks within this perspective. Mintz and Schwartz, in The Power Structure of American Business (1985) argue that it is the direction of credit through interlocks (and other methods) that is the central function of finance capital. According to this analysis ‘Interlocking directorates are not a source of hegemony but a method for managing discretion… bank centrality in this context reflects the dominant position of financial institutions in capital-flow decision making’ (Mintz and Schwartz, 1985: 250). 3
Mintz and Schwartz also argue (according to Mizruchi, 1996) that banks use interlocks to mediate inter-firm disputes thereby allowing business to approach the state as one actor. This is closely parallel to Useem’s (1984) view of an inner circle comprised of the CEO’s of banks and non-financials who form a lobby group to influence the state with one voice. In Australia’s case this is done through the Business Council of Australia (BCA). Intergenerational support for this thesis, or that part of it which argues a strong business unity as a continuing phenomenon, comes from Mizruchi (1982) who studied 167 large firms between 1912-1935. International comparative support also comes from Stokman et al (1985), who show the result of interlocks across twelve countries.
The hypothesis that arises from this discretionary perspective is that directional clusters of directors from banks can be assumed to reflect the dominant position of financial institutions in capital-flow decision-making.
The embeddedness perspective focuses on the directors’ social location providing an awareness of class formation missing in much interlock analyses. Interlocks are seen as a mechanism for capitalist class reproduction (i.e. ‘jobs for the boys’) and class cohesion (i.e. ‘don’t rock the boat; employ your own’). Although these two ideas are implicit in many interlock studies prior to the 1980s (e.g. Ratcliffe, 1975, Mizruchi, 1982, Scott, 1985) it was not until the 1980s that such social embeddedness was systematically explored. Embeddedness in interlocking research, Mizruchi suggests, began with Granovetter’s 1985 journal article ‘Economic Action and Social Structure: The Problems of Embeddedness'. This demanded an understanding of the social embeddedness of all networks. Granovetter stresses the importance, amongst business actors of social, rather than just economic profit-driven, motives for involvement with each other. He suggests that interlocks between companies could influence a wide range of organizational behaviour, such as strategies, structures and performances.
Interlocks as a communication node or information conduit are another focus in the literature (Scott and Griff, 1983, Useem, 1984, Mizruchi, 1996). In Useem’s The Inner Circle, (1984) he sees this inter-communication as the most important aspect of the interlocks, and he writes of a firm’s interlocking directorates as providing the business scan they need to give it an “awareness of its environment” (Useem, 1984). Following on from this perspective, Davis (1991) argues that central interlockers are the key carriers of social capital (Bourdieu, 1977) 4
within the class. The most heavily interlocked individuals are a vanguard of the corporate elite and its most likely innovators.
Scott and Griff’s (1983) writing had previously made a major contribution to embeddedness theory when they argued that interlocks encapsulate practices and strategies of transformation. Transforming, coordinating and organizing board relations happen on a variety of levels; through personal relations and creating a community of interests (that can result in joint ventures, mergers, takeovers and amalgamations). However, according to Scott, a primary function of interlocks is as a conduit for information flows (Scott, 1985).
The major hypothesis that this embeddedness perspective suggests is that the most interlocked individuals act to integrate the class and reassure its members as to the value of the innovations they propose.
The Australian Study Results What light is thrown on the competing hypotheses about interlocks by the study of Australian experience? The Australian sample of top thirty companies analysed here comes from the Business Review Weekly (BRW), and its list of 1000 top companies (BRW, 1992 and BRW, 1998). These top thirty companies were chosen on the basis of their revenue earning capacity. This material was triangulated against top thirty company director interviews and data from annual company report about the top shareholders in each. The first case study is based on the 1992 data and the second case study is on the 1998 data. This six-year time period gives some indication of changing trends.
The 1992 Australian Interlock Data
Figure 1 depicts the principal interlocks between the top thirty companies in 1992.
5
Figure 1: Interlocking Directors 1998 S.Wallis
Coloni al
Pioneer
AMCOR S.Wallis
Telstra
S. Wallis
Coles Myers S.Wallis
J. Ralph
J. Ralph
Fosters
S.Wallis
AMP I.
J. Ralph
J. Ralph CBA
J. Ralph
I.
J. .Ralph
N
J. .Ralph J. Ralph Pacific
J. Ralph
J. Ralph
D.Argus
Dunlop
I.Burgess
I. Burgess
M. Rayner
BHP
C. Goode J. Ellis
CS
C. Goode
Boral
ANZ C. AW A
D. Clark G. Toomey
NZ Dairy Board
T. Kennedy
QANTAS
Source: Annual Reports 1992 hhttp://www.connect4.com.au Key
= the end of the shared director line within the top thirty companies
= the company is interlocked with others. = the direction of the director’s power base = the director has a power base in two companies.
Applying these calculations to the map of the 1992 top thirty interlocked companies shows the centrality of Pacific Dunlop and CRA and the role of key directors such as John Gough and Alan Coates.
Table 1 seeks to summarise this complex picture using centrality, breadth and depth analysis from the work of Mintz and Schwartz (1985). Specifically in relation to interlocks, their method shows that the value of interlocks is dependent on the strength of the tie (e.g. between an executive or a non-executive director). Although interlocks between two directors bind two enterprises through one agent, not every interlock has the same density. The most intense interlock is a tight interlock, usually where a relationship exists between a parent company and
6
its subsidiary. A primary interlock is one in which an executive director operates on another board as a non-executive director. An induced interlock is the serendipitous result of two primary interlocks (e.g. X is a chief executive officer on board A but is a non-executive on boards C and B). The most common interlock is where no primary relations occur. The basis of these calculations is as follows; •
Breadth measures the immediate span of the interlocks. The following example would be 4. B
Breadth= C
•
D
E Depth equals the number of vertical interlocks. In the following way. The following example would be 2.
Depth =. •
A
A
D
F
Centrality is a total of these two indices. The following example (a combination of the above two, would be 5.) B
C
A
D
F
E Table 1: Interlocking directorates, 1992 Company Pacific Dunlop CRA CSR IEL BHP AMP ANZ Amcor
Total number ofBreadth h all interlocks l 10 4 9 3 9 4 9 2 8 2 7 1 7 4 7 2
Adsteam 8 (owns DJs. DJs owns 1/3 of IEL) Telecom 4 Westpac 4 FCL 1 Fosters 1 Qantas 1 Source: 1. Business Review Weekly 1000, October 23, 1992, p.76. 2. Individual Annual Reports 1992
Depth Centrality 5 3 4 2 5 3 7 4
8 4 7 2 6 3 9 5
4
3
6
3 2 1 1 1
3 2 6 1 5
4 3 7 1 4
Table 1 reveals that Pacific Dunlop as the leader with 10 central interlocks, followed by other productive capital (e.g. CRA, BHP, etc). The only financial institution with some centrality is the ANZ Bank (e.g. 9 central interlocks). Contrary to the collusive (European dominated) or discretionary (US dominated) model’s evidence, this material shows a lack of the centrality of banks and bank directors on industrial’s boards in Australia. In the US and Europe directors from banks are visible as a force on bank boards. That is not the case in Australia or New Zealand as a director explained to me:
7
[It’s] different from the way they are in Europe, particularly in Germany where the banks are usually the shareholders. Many of these companies or certainly the main shareholders of them …[they] are very concerned with management, (Murray, 1990). The predictive accuracy of the collusive and discretionary models is limited by their geographic and social specificity.
However, when the patterns of share ownership are shown, the dominance that these models give to finance capital is vindicated. The interlocks, as a surface political integration of control, need to be considered in the context of a deeper underlying economic structural grid of ownership.
1992 Shareholding in the Top Thirty Companies Table 2 shows the proportion of shares in the top thirty companies in Australia in 1992 that were owned/ controlled by the five major financial institutions. These amounts are particularly significant because, as O’Lincoln (1996) argues, a strategic control of a company can be as little as five per cent of a company’s shares. Finance capital, by this evidence, had a very dominant ownership position in relation to the top thirty companies in Australia in 1992. The key owners of the major companies are not the little shareholders (the fifty four percent of mum and dad Australian shareholders of whom forty two per cent have portfolios of $10,000 or less, (ASX 2000 Survey, 2000: 1)) or the workers who may have employee funds tied up in the company, but the large shareholders who take the form of nominee companies representing banks, mutual insurance or super-annuation funds and occasionally individuals. These finance capitalists are the key to this web of power and research indicates that these large shareholdings are becoming more concentrated (O’Lincoln, 1996). O’Lincoln’s research shows, that whereas in the 1950s the top twenty shareholders held thirty seven per cent of the shares in the top companies, by the 1990s this had grown to sixty-three per cent ownership.
8
Table 2: Available top 5 shareholdings of the top 30 Companies, 1992. company Amcor Westpac CSR
AMP
National Nominees
ANZ Nominees
Bank NSW
Westpac Nominees
Others
9 13 13
5 3 4
4 3 -
5 3
2 -
TNT Adsteam BHP Coles Myer
6 9 6 4
12 5 3 -
21 4 3 9
3 5 -
3 -
NAB
6
7
5
-
-
Pioneer
8
9
9
-
-
Fosters
-
-
5
-
-
Boral Pacific Dunlop ANZ FCL
8 -
4 7
3 6
3 4
-
6 7
10 7
6 7
-
8 -
CBA
-
.64
1
-
-
Woolworths (1993) CRA (1993) National Mutual (unit holders)
7
3
3
-
3
Chase M-3 Employee Unit trust-20 NZ Govt-6 Commonwealth of Aust. –71 State Austhorities Super-92 Nat. Mut.Life of Aust.-79 Chase Manhatt-3
3
5
6
-
4
Rio Tinto-49
-
-
-
-
2
BTR Nylex
5
3
2
-
-
11
5
5
-
-
Nat. Mut. Life Ass of Aust-43 OFP pty-10 Permanent Tr.us-3 Perpetual Trus.-2 BTR Aust-57 Nat. Mut-2 Pendal-6 Perpetual trustees-3
5.33
2.67
2.33
0.58
1.5
GFW Average
State A-5 Pendal-3 Qld I-3 Pendal-5 Chase M-6 State a-5 Beswick-20 Colomy H-6 Voyager—8 Barclay-8 State A-4 Chase M. 4 Chase M.-5 Pendal-3 HKBA Nom-32 Asahi Beer Int.-20 State Auth. Super-4 Citicorp-5 Pendal-4 Qld Invest.-4
Notes:
1. 2. 3.
This is stated as available because the 1992 annual company reports were not consistent in including this data. Nominee companies are those registered by shareholders who do not need to register in the name of their beneficial holder. In this way the true ownership can be concealed. For example National Nominees’ ultimate holding company is the National Australia Bank Ltd. The other Nominee companies listed (above) are self explanatory. The following companies did not nominate their top shareholders in the Annual Report 1992-CRA (so 1993 used), Woolworths (so 1993 used); The following were not available Mitsubushi, Mitsui, Qantas, Telecom, IEL, AMP, David Jones, News Ltd.The following was a controlled entity- Shell, Caltex.
The distinction between ownership, management and board membership is important. Managers make key executive decisions about the running of companies and they are answerable to a (maybe interlocked) board of directors who are in turn answerable to the major shareholders. Though managers, directors and owners may be one and the same, the evidence above shows that in the top thirty companies they are not. The top shareholders are banks (usually operating through nominee companies) and investment fund holders. So the key role of boards of
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interlocking directors must, by default, be read as primarily political. Managers often have a very healthy sized shareholding; for example, John Gough had 11,889 shares in BHP, 806, 249 in Pacific Dunlop, and 26,838 in CSR. However, this does not necessarily give them a large shareholder status in a major company. The central point here is that although a lot of the directors collectively manage, direct corporate strategy and gather corporate intelligence, ultimately their most important task is to protect the interests of their major shareholders. The data shows that these major shareholders are likely to be finance capitalists. The key financial capital in this period was AMP, the leading Australian Mutual Insurance company, subsequently de-mutualised in 1998. However, both AMP and Gough, the key interlocker, lost centrality by 1998. This change in key players reflects the changing needs of the class and the addition of new overseas players but shows continuity in the underlying structures of financial power irrespective of individuals or their companies.
The 1998 Australian Interlock Data Figure 2 shows the pattern of interlocking directorates in the thirty top companies in 1998. Figure 2: Figure 1: Interlocking Directors 1998 Colonial Mutual S.
AMCOR
Pioneer
S.Wallis J. RalphTelstra
S. Wallis
Coles Myers
J. Ralph
Fosters
S.Wallis J. Ralph
J. Ralph
AMP
J. Ralph
CBA
NAB
I. Burgess J. .Ralph
Pacific Dunlop
I.Burgess I. Burgess
J. Ralph
J. Ralph
M. Rayner D.Argus
BHP
C. Goode J. Ellis
C. CSR
C.
Goode
Boral
ANZ C. AW A
D. Clark G. Toomey
NZ Dairy Board
T. Kennedy
QANTAS
Key: As for figure 1.
10
This pattern of interlocks addresses most clearly the social embeddedness hypothesis and those theorists’ concern to identify the central interlocker as an innovator and key elite player (Davis, 1991). The distribution of interlocks amongst the top 1998 directors shows John Ralph at the political centre of top business. (Although Ralph also has a lot of shares - in 1998 he had 160,000 shares in Pacific Dunlop, 14,134 shares in Telstra, 10,602 shares in CBA, 40,000 in Telstra, 38,500 in Fosters - this does not make him a substantial or key shareholder.) Ralph, a newspaper reporter suggests, was ‘close to the Byzantine workings of government … John Ralph, a … former BCA President … worked as a link man between the Federal government and the Alliance of business groups, the Business Coalition for Tax Reforms’ (Gluyas, 1999). Ralph was also the person who helped put the concept of ‘enterprise bargaining’ into the lexicon, and into practice, as the Managing Director at CRA. Enterprise bargaining has perhaps been the single most disempowering strategy for working men and women, since its legislation and implementation by the Federal Government. In an interview this is how Ralph put this achievementThere was a study commission set up by the BCA that worked through a period of about five years [from 1983], from which time it developed the ideas of enterprise bargaining. Enterprise bargaining was, I won’t say our greatest success, but it is a really good example. Enterprise bargaining was an anathema when the stake was put in the ground. Now the words are used commonly sometimes to mean something quite different but at least it’s in most agendas and things have moved (Ralph, 1993). Ralph, acts for his class as both an innovator and a key connector to government. John Ralph Biographical Details: Born 1932. Qualifications; FCPA, FAIM, went to Melbourne University. Married with six children. Career - Known as the “nation's pre-eminent company director” (Gluyas, 1996), he is Chairperson of Telstra (1996), Calmalco Australia, Foster's Brewing, Pacific Dunlop (1998), Commonwealth Bank. Director of Pioneer International and Allied Industries Ltd. The ex-Chief Executive of CRA 1987-1994, director since 1971. Ralph joined CRA group in 1949. Associations - President of the Business Council of Australia 1993-94. President of the Australia/Japan Business co-operation committee. Member of the executive committee of Australia Mining. Government Committees: Headed the 1979 Fraser Government Commission on Pharmacies. Member of the Board of Management of the University of Melbourne. Also was a member of the PM Paul Keating's Science Group. Headed a business tax reform committee for the Howard government, which was published as the Ralph Report. Source: Who's Who in Business in Australia 1994, p.542 Who's Who in Australia 1998, p. 850.
Using the same methodology described earlier, Table 3 shows, in descending order, the number of interlocking directorates based on their breadth, depth and centrality.
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Table 3: Interlocking directorates, 1998 Company BHP Pacific D. CBA CSR ANZ Amcor AMP Fosters NAB Telstra Qantas Coles AWA Westpac NZ Dairy Colonial. M
Total number o Breadth Interlocks 11 1 10 5 9 0 8 3 7 2 6 3 5 2 5 4 2 2 4 0 1 1 3 2 2 1 2 0 1 0 1 0
Depth
Centrality
4 6 0 6 4 8 6 5 4 0 6 8 7 0 0 0
6 9 0 8 5 10 7 8 5 0 6 8 7 0 0 0
Sources: 1. Business Review Weekly 1000, Nov. 16, 1998, p.120. 2. Individual Annual Reports 1998.
These 1998 figures show an accentuated pattern of productive centrality amongst the interlocks (e.g. BHP had 6 central interlocks, Pacific Dunlop 9 central interlocks and Amcor 10 central interlocks) with the banks showing relatively little centrality. This overall lack of centrality of banks (with the exception the ANZ Bank and the NAB with centralities of 5) is contrary to the predictions of the collusive and discretionary models needs explanation. Some insight can be gained from a New Zealand director who was interviewed for earlier research. When asked why banks were not prominent on company boards he explained that, because all big companies had four or five banks that they share, the banks therefore have to stay strictly neutral.
He
responded to my questioning as followsDirector: No in New Zealand they don’t seek to have any influence - banks and insurance companies- they don’t have people on boards and they don’t seek to influence boards. GM: Does this mean that banks don’t have any control over decisions about how industrials spend their money? Director: No, they deliberately keep out of it – the banks and the insurance companies - mainly because they act for different companies. Bigger companies these days have four of five banks – all the major trading banks as their bankers and they might see several insurance companies, life assurance companies, looking after their pension funds and other different things – so the banks and the insurance companies stay strictly neutral…. GM: Is this pattern of no influence from banks changing? Director: No, it’s not changing in New Zealand. You ask the AMP or National Mutual and they will say the same- they don’t get involved. If they don’t think a company is being run well, in an extreme case they’ll tell the chairman or the managing director. But normally they’ll express their displeasure by selling out the company and investing somewhere else. GM: But they do control industrials’ access to credit? Director: Oh, yes, they control credit. GM: So they can make discretionary decisions about who they are going to loan money to? Director: Oh yes, they can do all that. So indirectly they do have some influence on the appointment of a director – if a company wasn’t doing well and the bank might say “You have to get one or two live wire directors, we suggest so and so and if you get them we may increase your credit”. GM: I have read that in the US banks can develop whole sectors. Does that happen here? Director: No that doesn’t happen.
(G. Murray, Banker interview, 1990: 277).
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1998 Shareholdings in the Top Thirty Companies
When these productive-sector dominated director interlocks are correlated with more information about the top five shareholder’s ownership, the importance of the banks and nominee capital again becomes obvious. The extremely concentrated bank capital ownership (as represented by the top five shareholders) is barely reflected in the patterns of interlocking directorates. Table 4: Top 5 shareholdings of the top 30 companies, 1998. Company
Westpac Nominees 12 10 13 8
Chase Manhattan 12 7 7 4
14
Pacific Dunlop Qantas CBA Telstra Boral NAB Coles Myer
ANZ BHP CSR AMP
National Nominee
ANZ Nominee
Permanent
Other
4 6 7 3
3 3 4 -
-
4
5
3
3
Citicorp-2 Beswick-16 AMP-4 AMP-1 Qld Invt-2 -
7
11
5
6
6
-
6 5 8 8 8 6
9 5 5 5 7 9
6 3 4 4 7 -
2 4 6 -
7 3 4 5
News Corp
8
5
-
6
-
FCL
-
-
-
-
-
AWA
-
-
-
-
3
16 9
15 9
11 5
4 -
-
6
-
-
6 7 8
5 3
5 -
British Air-25 AMP-2 Telstra-3 Qld Invest-2 Voyager distributers-7 MF Custodians-6 Cruden-30 Citicorp-19 NZ Securities Depositary-52 FCL Employees-4 FCL Employees Educ Fund- 3 SAS Trustee- 1 AMP-.6 Belike Nominees-17 NRMA-9 Potter Warburg—5 BT Custodial—3 BT Custodial-4 National Australia- 9 Lendlease- 7 Colonial Fd.-5 AMP-5 Citicorp-2 Rio Tinto Plc-49 Perpetual trustees-4 SAS Trustee-7
5
1.5
1.67
Amcor
Fosters Westpac
Colonial 6 5 Mutual Woolworths 8 6 Rio Tinto Tabcorp 11 10 David 14 12 Jones Average 8.33 7.33 Notes: 1. Source: 1998 Annual reports. 2. Information was not available on shareholdings
of Tattersalls, Mitsui, Mitsubushi, BTR Nylex, Reserve Bank, or on the controlled
entities- Rio Tinto, Shell, CC Amatil; or on the cooperative company - NZ Dairy Board. 3.
‘By way of background, Westpac Nominees is a wholly owned subsidiary of Westpac Banking Corporation. Westpac nominees holds shareholdings on behalf of other parties, and as such does not own shares in its own right. By the very nature of it being a 'holding' company, the names of its customers (and the shares being held) are not publicly available.’ Hugh Devine, Westpac, 16.6.2000.
These 1998 figures show a growth in the concentration of finance capital ownership in the top thirty interlocked companies since 1992, particularly in relation to Westpac Nominees (8% average ownership compared to 1.5% in 1992) Chase Manhattan (7% ownership compared to
13
zero ownership in 1992) and National Nominee (5% average ownership compared to 3% in 1992). The 1998 figures also represent a loosening of Australian finance since 1992 (particularly AMP perhaps around the debacle of its hostile GIO takeover) with the integration of US capital (e.g. Chase Manhattan). This ownership data muddies the picture of interlocks whose power is locatable in productive capital, and who have key professional directors such as John Ralph. Instead it lends weight to an the view that the underlying domination of finance capital has been misleadingly neglected by interlocking theorists because of the Australasian tradition of not commonly putting bank directors on others boards. Rather it seems that the prevailing pattern is for management to make decisions answerable to an interlocked board that in turn makes decisions answerable to finance capital, the board’s major stakeholders.
Evaluating the Results of the Australian Case Study The data does not show a heavy pattern of directional interlocks or clusters from finance capital, or specifically from banks to productive capital (with two exceptions e.g. the ANZ Bank and the NAB). So little support is provided for either the collusive or the discretionary models of the general character of interlocks. These models would imply respectively that, if bank ownership in the top thirty companies is high (and these models believe it will be) this will be reflected in dense patterns of interlocks between banks and industrials; and if directional clusters of bank directors occur (i.e. that centrality occurs) then it can be assumed this reflects the dominant position of financial institutions in capital-flow decision making. Dense finance capital ownership has not resulted in a dense pattern of interlocking directorates, as the collusive model suggested, because finance capital ownership is so ubiquitous throughout the top thirty companies that it has to be seen as acting neutrally between them. Collusive cartels cannot therefore be surmised from this data. Finance capitalists’ control of credit decisions is similarly removed from the direct control of the board because non-finance capitalist directors dominate these boards. Finance capitalists intervene when they see their interests at stake in a crisis (see interview) and may then step in to suggest changes in strategy and board members but they normally give day-to-day autonomy to the executive and the board. Finance capitalists seldom put their members on boards because Australian finance capital’s large ownership stake gives them ultimate hegemonic control. Australian boards even appear to favour board members who are not major shareholders or do not represent the major shareholders. For example, in 1992 the
14
CRA chief executive officer, John Ralph, was on the Commonwealth Bank Board but the company’s major shareholders were Bankers Trust, Chase Manhattan and Westpac Nominees. Therefore the defining characteristic of finance capital, in Australia, is not the realisation of surplus value through the lending of money to productive companies but the ubiquitous quality of that relationship that allows finance capitalists to maintain invisibility and dominance whilst maintaining only arm’s length control of industry.
There is more support for the fourth major hypothesis, which centres on the political role of the clustered interlocked individuals as a vanguard of the corporate elite and as its most likely innovators. These key directors are held to integrate the class and reassure them as to the value of the innovations that they propose. The values in the case of John Ralph (1998) are based in economic rationalist thought – support for enterprise bargaining, low tariffs, low corporate tax rates, privatisation and ideas that are compatible with competitive advantage generally. These measures are necessary to discipline labour, to get more productivity and in return give workers insecurity of tenure, lower real wages and poorer working conditions (Bryan and Rafferty, 1999). As Higley et al’s (1979) work suggests, the interlocks run parallel to positions of power in the lobby groups; specifically in the 1990s the BCA, of which Ralph was President in the period from 1992 to 1994.
Limitations and Future Research Criticisms of this sort of research on interlocking directorates fall into two groups. The first agrees that it is acceptable to quantify corporate interlocks, but argues that this mapping does not tell you anything about the behavioral motives of the actors (e.g. Fligstein and Brantley, 1992). The second rejects the quantitative method outright, charging that it is an unsuitable mechanism for understanding the richness and diversity of business behaviour. Although I have some sympathy with both criticisms, they are both answered here by triangulating the data with interviews and other primary sources, such as ownership data. Mizruchi argues that interlocks may not reveal a great deal about individual directors’ motives but they can predict much that is interesting in strategic firms’ allegiances, choices and information flows, and thereby help create a picture of rich and complex board relations (Mizruchi, 1996). This Australian case study highlights the centrality of productive capital and the key figures of John Gough (in 1992)
15
and John Ralph (in 1998), and the underlying power of finance capital through the control of nominee companies that control the means of production. The most obvious limitation of these findings is the lack of assessment of the impact of globalisation on the structure of interlocks and ownership amongst the top thirty companies. Fennema (1982) argues, with a similarly based but much larger sample of 176 major industrial and banks, that there ‘exists a cohesive international network of interlocking directorates [but at the same time it] should be considered primarily a communication network rather than a network of domination and control’. Interlocking networks show aspects of the political structure, but you have to look at the ownership structure to see hegemonic power. That is why the very interesting work of Carroll and Alexander (1999), quantifying the number of outsiders (non executives) and the board’s size as indicators of finance capital’s hegemony and the degree of global penetration, misleadingly concludes that finance capital is only ‘evident’ in Australia. They note, however that Australian industrials do provide indirect channels of communication between financial institutions interlocked with the same industrial firms. The evidence here points to a much heavier involvement than this by finance capital, because it goes beyond the political and communication levels of the board interlocks to focus on the level of ownership as a more significant indicator of power relations. I would argue that ownership figures are pivotal and that, by just looking at the largest stakeholders in the top thirty companies as is done here, it can be shown that over a period of ten years there is some penetration of ‘new’ finance capital in to positions of prominence in Australia, e.g. by the US based institutions Chase Manhatten and Citicorp. A much wider sample of interlocks and ownership data, correlated, would be an interesting area for future globalization research. This might reveal more about global and national financial integration, overseas trade, investment and tax evasion, areas that are as some of the most interesting aspects of contemporary capitalism (e.g. van Fossen, 1993, Bryan and Rafferty, 1999). The ties between business and the state (for example, through board membership of political associations, think tanks, Quangos, Commissions and political lobby groups) are also worthy of further research. Tracing networks of power and information between state and business board members would be very interesting because of the corporatist nature of the Australian state. The Labor government 1983-1996 was crucial in helping shape these ties. The strong tie between the state and the BCA built a reliance on the latter’s policy advice (verified by Dawkins, in Williams and Ellis, 1994). It would be most interesting to analyse whether these national
16
political integrations will reveal a ‘general reluctance to use board positions for class wide, hegemonic functions’ (Alexander and Carroll, 1999) or rather, provide further evidence, of leadership to unify class fractions and promote the further erosion of conditions for workers.
Conclusion These findings are of political and economic significance because they differentiate two levels of power – economic and political. On the first level, of economic ownership, finance capital (used in its most catholic sense as money capital immediately outside of production, not as the collusive model does, by conflating industrial and financial capital symbiotically) remains dominant in its stake holding of the top thirty Australian companies. This debunks the original control model because although the type of finance company may change by name and country of origin, it remains that finance capital is the largest stakeholder, they have ultimate control through ownership and influence on board decisions.
The major difference between the situations in 1992 and 1998 is that finance capital, was still primarily Australian based in 1992, as compared to 1998 when some infiltration by overseas finance capital occurred. Only a small degree of penetration is revealed by the data considered here. Industrial capital has until relatively recently been tied to the local (later national) circuits of capital whereas finance capital circulates equally easily nationally or internationally (van der Pijl, 1989).
The as yet small degree of international finance capital penetration ties into other similar findings. Bryan and Rafferty (1999) found that the bulk of capital investment continues to be by Australian capitalists in Australia. What this data has shown is that the bulk of the investment is made by finance capitalists who are happy to see industrial capital’s directors running industrial boards and in some cases also direct banks (e.g. Ralph, chairperson of the Commonwealth Bank). This is not because globalisation (the penetration of overseas capital) is in the process of disintegrating finance capital in Australia (as suggested by Carroll and Alexander, 1999), but rather the opposite. Finance capital in Australia is only a part of the circuit of capitalist production but it is a dominant part that controls and organises productive capital.
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17
Brenner, R. (1998) “The Economics of Global Turbulence: A Special Report on the World Economy, 1950-1998”, New Left Review, May/ June, vol. 229. BRW Rich 200 (1998) Business Review Weekly, May.27 BRW Rich 200 (1999) Business Review Weekly, May 28. Bryan, D. & M. Rafferty (1999) The Global Economy in Australia: Global Integration and National Economic Policy, Allen and Unwin: St Leonards Burnham, J. (1943) The Managerial Revolution, D.C. Heath, Lexington. Business Council of Australia (1994a) Refocusing Training Reform, Australia 2010, September, Melbourne, BCA. Carroll, B. & M. Alexander (1999) “Finance Capital and Capitalist Class integration in the 1990s: Networks of Interlocking Directorships in the Canada and Australia,” The Canadian Review of Sociology and Anthropology, August, v.36, i3, p.331-350. Cyert R. & J. March (1956) “Organizational Factors in the Theory of Oligarchy”, Quarterly Journal of Economics, vol. 70, pp. 44-64. Davis, G. (1991) “Agents without Principles? The Spread of the Poison Pill through the Intercorporate Network”, Administrative Science Quarterly, no 36, pp. 583-613. Devine, H. (2000) Email from Westpac, June 16. Fennema, M. & H. Schijf (1979) “Analyzing Interlocking Directorates: Theory and Method”, Social Networks, vol. 1. N. 1., pp.297-332. Fennema, M. & K. Van der Pijl (1987) International Bank Capital and the New Liberalism (Eds.) M. Mizruchi/ M. Schwartz, Inter-corporate Relations, The Structural Adjustment of Business, Cambridge, Cambridge University Press, pp.298-320. Fligstein, N. & P. Brantley (1992) “Bank Control, Owner Control or Organizational Dynamics: Who Controls the Large Modern Corporation?” American Journal of Sociology, n. 98, pp. 280-307. Galbraith. J. (1967) The New Industrial State, Boston, Houghton Mifflin. Glasberg, D. (1987) “The Ties that Bind? Case Studies in the Significance of Corporate Board Interlocks with Financial Institutions”, Sociological Perspectives, vol. 30, n.1, pp. 19-48. Gluyas, R. (1997) “Treading the Boards Puts Ralph in the Limelight”, The Australian December 1, p. 53. Gluyas, R. (1999) ‘Utopian Agenda’, The Australian, January 22, p. 32. Gordon, R. (1945) Business Leadership in the Large Corporation, Washington DC, Brookings Institute. Granovetter, M. (1982) The Strength of Weak Ties, a Network Theory Revisited, in P. Marsden and N. Lin, Social Structure and Network Analysis, Beverly Hills, Sage. Granovetter, M. (1985) “Economic Action and Social Structure: the Problem of Embeddedness”, American Journal of Sociology, n. 91, pp. 481- 510. Higley, J. & D. Deacon, D. Smart (1979) Elites in Australia, Cumbernauld, Routledge Keagan and Paul. Hilferding, R. (1910) Finance Capital, London Routledge, Keagan and Paul, reprinted 1981 James, D. and M. Soref. (1978) “Profits and Constraints on Managerial Autonomy: Managerial Theory and the Unmaking of the Corporate President”, American Sociological Association, Paper given. Kaysen, C. (1957) “The Social Significance of the Modern Corporation”, The American Economic Review, vol. 57, pp. 311-319. Mace, M. (1971) Directors, Myth and Reality, Boston, Harvard University Press. Mintz, B & M. Schwartz (1985) The Power Structure of American Business, Chicago, University of Chicago Press. Mizruchi, M. (1982) The American Corporate Network, Beverly Hills, Sage. Mizruchi, M. (1983) “Who Controls Whom? An examination between the Relation between Management and Boards of Directors in Large American Companies”, Academic Management Review, n. 8, pp.426-35. Mizruchi, M. (1996) “What Do Interlocks Do? An analysis, Critique and Assessment of Research on Interlocking Directorates”, Annual Review of Sociology, v.22, pp. 271-302. O'Lincoln, T. (1996) Wealth, Ownership and Power, the Ruling Class, in R. Kuhn & T. O’Lincolin, Class and Class Conflict in Australia, Melbourne, Longmans. Pahl, R. & T.Winkler (1974) “Broken Ties: Interlocking Directorates and Inter-Corporate Coordination”, American Science Quarterly, v. 28, pp.40-55. Rafferty, M. & D. Bryan (1999) The Global Economy in Australia, Global Integration and National Economic Policy, Sydney, Allen and Unwin. Ratcliffe, R. (1980) “Banks and Corporate Lending: An Analysis of the Impact of the Capitalist Class Lending Behavour of Banks”, American Sociological Review, v. 45, pp. 553-570. Rolfe, H. (1967) The Controllers: Interlocking Directorates in Large Australian Companies, Melbourne Cheschire. Scott, J. (1985) Theoretical Frameworks and Research Design, (in) Scott et al Networks of Corporate Power, pp. 1-19, Cambridge, Polity Press. Scott, J. & C. Griff (1985) Directors of Industry: The British Corporate Network, 1904-1976, Cambridge, Polity Press.
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Stokman, F. & R. Zeigler, J. Scott (1985) Networks of Corporate Power, pp. 1-19, Cambridge, Polity Press. Useem, M. (1984) The Inner Circle, Oxford Press, Oxford. Van Fossen, A. - (1993) “Pacific Islands Tax Havens”, Pacific Basin Studies Review, vol.4, no.2, pp.2-3. - (1994) quoted in Wilson, B. “Smart Money”, The Sunday Mail, p.67. Willians, P. and Ellis, S. (1994) “Dawkins Kisses and Tells all on the BCA”, Australian Financial Review, July 15, Friday, pp 1/18.
Appendix Interlocking Directors in the Top Thirty Companies, 1992. Company
AMP
Top 5 shareholders No. of as % of shares Interlocks
-
N 7
B 1
D 3
Director’s name & Company of origin
C 3
• • • • • •
Amcor
7
2
4
5
• • • • • • •
Westpac
CSR
Telecom
AMP-13 Nat. N-3 ANZ N-3 Pendal-3 Westpac-2
4
AMP-13 Pendal-5 Qld In. –5 Nat N. 4 Bank NSW-3
9
-
4
2
2
3
• • • • •
4
3
4
3
7
4
• • • • • • • • • • • •
TNT
ANZ N-21 Nat. N.-12 Chase M.-6 AMP-6 BNSW-3
2
0
0
0
• • •
Balderstone (Westpac) I. Burgess (CSR) I. Stanwell (Pioneer) J. Utz (Qantas) J. Uhrig (CRA) Sir Eric Neal (BHP) S. Wallis S. Wallis (AMP) M. Besley (CBA) R. Cameron (Pioneer) B. Loton (BHP) B. Loton (NAB I. Webber (Pacific Dunlop) I. Webber (Qantas) Sir J.Baldertsone (AMP) J. Uhrig (CRA) J. Urig (AMP) E Cameron (Pioneer) J. Gough (Pac. D) J. Gough (ANZ) J. Gough (BHP) J. Gough (Amcor) I. Burgess (AMP) A. Coates (AMP) A. Coates (CRA) A. Coates (Mitsubushi) A. Coates (Pac. D.) E. Cameron (TNT) A. Morokoff (Adsteam) A. Morokoff (Wooolworths) A. Morokoff (IEL) E. Cameron (Telecom) G. Kryger (Boral)
19
Shares of director
Status of Director
Directional HS/P/T/I/N
Dir. Fees $A
• • • • • • •
C NE NE NE NE NE NE
• • • • • • •
P N N N N N N
• • • • • • •
MD NE CE NE NE NE NE
• • • • • • •
P N P N N N N
48,,486 13,000
• • • •
NE C C NE
• • • •
N P P N
-
26,838
• • • • • • • • •
NE NE NE NE MD C C C C
• • • • • • • • •
N N N N P P P P P
37,500
-
• • • •
NE C C C
• • • •
N P P P
-
5,000 7,224
• •
NE NE
• •
N N
-
-
184,512 85,44-0
-
37,500 37,500
Adsteam (owns DJs. DJs owns 1/3 of IEL)
Woolworths (owned by IEL floated 1992)
BHP
AMP-9 BNSW-5 Nat N-5 State Superannuation Fund-5 ANZ N.-4
-
8
4
3
6
• • • •
5
0
0
0
• • • • • •
Beswick-20 AMP-6 Nat. N-3 ANZ N-3 Westpac-3
8
2
5
6
• • • • • • • •
Coles Myer
NAB
Pioneer
Fosters
Shell Boral
CRA
ANZ N.-9 Voyager-8 Barclay-8 Colomy H-6 AMP-4 Nat. N.-7 AMP-6 ANZ N. –5 State Autor. Superannuation— 4 Chase M.-4
0
ANZ N-9 Nat N-9 AMP-8 Chase M-5 Pendal-3 HKBA N.-32 Asahi Beer Int. – 20 Citicorp-5 ANZ N. 5 State Authorities Super-4 AMP-8 Pendal N. –4 Nat. N. –4 BNSW-3 ANZ N-3
2
-
9
0
0
0
• • • • •
7
0
0
0
0
0
0
• • •
R. Wright (David Jones) R. Wright (IEL) A. Morokoff(Woolwor ths) A. Morokoff (Telecom) A. Morokoff (IEL) P. Cottrell (IEL) P. Cottrell (NAB) P. Cottrell (Boral) A. Morokoff (Adsteam) A. Morokoff (Telcom) A. Morokoff (IEL) C. Little (Adsteam) J. Dahlsen (ANZ) J. Gough (CSR) J. Gough (ANZ) J. Gough (Amcor) J. Gough (Pac. Dunlop) J. Reid (Coles Myer) B. Loton (Amcor) B. Loton NAB) Sir E. Neal (AMP) Sir R. Mathers (Nat. Mutual) J. Reid (BHP)
•
P. Cotterell (IEL) P. Cotterell (Boral) P. Cotterell (Adsteam) B. Loton (Amcor) B. Loton (BHP) B. Loton (CRA) M. Rayner (CRA) Ross. Cameron (Amcor) I. Stanwell (AMP)
• • • • •
1
1
1
1
•
N. Clark (Boral)
0 5
0 0
0 0
0 0
• • • •
R. Searby (CRA) N. Clark (Fosters) G. Kryger (TNT) P. Cotterell (Adsteam) P. Cotterell (NAB) P. Cotterell (IEL) R. Searby (Shell) J. Uhrig (Westpac) J. Uhrig (AMP) M. Rayner (NAB) Sir W. Dix (Qantas) J. Ralph (CBA) A. Coates (Mitsubushi) A. Coates (CSR) A. Coates (Pac. Dunlop)
3
3
4
• • • • • • • • • • •
20
• • • • • • • •
E E NE NE NE C C C
-
• • • • •
NE NE NE NE NE
• • • • •
T N N T N
-
11,889
• • • • • • • •
NE NE NE NE NE C C NE
• • • • • • • •
N N N N N P P N
-
Represent Kmart=122,000,000
• •
NE NE
• •
N N
-
10,222
• • • • • • •
NE NE NE NE NE NE NE
• • • • • • •
N N N N N N N
-
25,343 10,000
• •
NE NE
• •
N N
-
•
C
•
P
2,289 13,814 4,000
• • • • • •
NE NE NE NE NE NE
• • • • • •
N N N P P P
-
7,789
• • • • • • • • •
NE C C NE NE MD NE NE NE
• • • • • • • • •
N P P N N P N N N
-
32,892 5,000
6,000
131,384 864,031 7,141
116,031
6,797
1,390 3,676 31,835 -
• • • • • • • •
-
P P T N T P P P
190,384
Qantas
-
Pacific Dunlop
Nat. N. –7 ANZ N.-6 Chase M.-4 BNSW-4 Qld In.-4
National Mutual IEL
1
1
5
4
• • • •
10
4
5
8
• • • • •
-
1
0
0
0
• • • • • • •
-
9
2
2
2
• • • • • • • • •
David Jones
-
8
0
0
0
• • • • • • •
ANZ
Nat. N.-10 Westpac-8 AMP-6 ANZ N.-6 Chase M.-3
7
4
7
9
• • • • • • • •
FCL
Mitsubushi
Employee Unit Trust & Pensions20 ANZ N. 7 AMP-7 Nat. N-7 Her majesty the Queen in right of NZ-6
1
1
6
7
•
0
0
0
0
• • •
Sir W. Dix (CRA) J. Utz (AMP) I. Webber (Amcor) I. Webber (Pac. Dun.) J. Gough (CSR) J. Gough (ANZ) J. Gough (BHP) J. Gough (Amcor) A. Coates (Mitsubushi) A, Coates (CSR) A. Coates (CRA) J. Kennedy (CBA) C. Goode (ANZ) I. Webber (Amcor) I. Webber (Qantas) Sir R Mathers (Coles Myer) C. Little (David Jones) R. Wright (Adsteam) R. Wright (David Jones) M. Kent (David Jones) A. Morokoff (Telecom) A. Morokoff (Adsteam) A. Morokoff (Woolworths) J. Spalvins (Adsteam) J. Spalvins (David Jones) A. Morokoff (Adsteam) A. Morokoff (Telecom) A. Morokoff (IEL) M. Kent (IEL) J. Spalvins (IEL) J. Spalvins (Adsteam) R. Wright (Adsteam) R. Wright (IEL) J. Gough (CSR) J. Gough (Amcor) J. Gough (Pacific Dunlop) J. Gough (BHP) Sir R. Trotter (FCL) J. Dahlsen (Woolworths) C. Goode (Pacific D.) Sir R. Trotter (ANZ)
A. Coates (CRA) A. Coates (CSR) A. Coates (Pacific D.)
21
-
• • • •
C NE NE NE
• • • •
P N N N
-
806,249
• • • • • • • • • • •
C C C C NE NE NE NE NE NE NE
• • • • • • • • • • •
P P P P N N N N N N N
-
-
•
NE
•
N
-
-
• • • • • • • • •
NE NE NE NE NE NE NE MD MD
• • • • • • • • •
N N N N N I I P P2
-
-
• • • • • • • •
NE NE NE NE NE NE NE NE
• • • • • • • •
N N T T N N N T
-
• • • • • • •
C C C C NE NE NE
• • • • • • •
P P P P N N N
-
(All directors must hold at least 5,000)
•
C
•
P
-
2,067,702
•
NE
•
N
-
182,730
74,756 164,487 72,300
124,800 145,400 1,717,086
Sources: Business Review Weekly Top 1000, Oct 23, 1992, p. 76, annual company reports 1992. Key: 1. Status of director- NE = Non Executive, MD= Chief Executive Officer, C=Chairperson; 2. Directional interlock –P= primary, I= induced, t=tight, HS= high shareholding, N=Non-directional; 3. Type of interlock-N=total number, B=breadth, D=depth, C=centrality.
Appendix 2 Interlocking directors in the Top Thirty Companies, 1998. Company
ANZ
BHP
CSR
AMP
Amcor
Pacific Dunlop
Top 5 shareholders as % of company shares
Number of interlocks N
B
D
C
Chase M-12 Westpac- 12 National N-4 ANZ N – 3 Citicorp- 2 BT cust. 2
7
2
4
5
Beswick –16 Westpac- 10 Chas. M-7 National N-6 ANZ N. 3
11
Westpac-13 National N-7 Chase M -7 ANZ N-4 AMP- 4
• • • • • • •
8
1
3
4
6-
6
8
• • • • • • • • • • • • •
5
Westpac-14 National N-5 Chase M –4 ANZ N-3 Permanent Trustee - 3
6
2
3
10 5
6-
7
8 10
6
9
R.Deane (FCL) J. Ellis (BHP) M. Jackson (BHP) M. Jackson (Qantas) G.Toomey (Qantas) C. Goode (CSR) C. Goode (Oacific D.)
J. Ralph (Telstra) J. Ralph (CBA) J. Ralph (Pac D.) J. Ralph (Fosters) J. Ralph (Pioneer) M. Jackson (Qantas) M. Jackson (ANZ) M. Jackson (Pac.D) J. Ellis (ANZ) D. Argus (NAB)
Shares of director
Directional HS/P/T/I/N
Dir.ectors Fees $A
NE NE NE NE NE C C NE NE NE NE NE NE NE NE C NE NE
N N N N N P P
• • • • •
90,312 103,594 -
•
318,750
N N N N N N N N P N N
•
100,000
•
100,000
• • •
400,000 100,000 100,000
• • • • •
NE NE NE
N N
• •
5,8000 53,000
T
•
-
C
P
•
145,533
• • • •
C. NE NE NE
P
•
58,000
N N N
•
53,000
• • • • •
NE NE C. C NE
N I P
•
86,000
•
278,000
•
87,000
587,642
•
NE
1,173,439
• • • • • • •
C C C NE NE C C
14,134 “ “ “ “ “ 6,106 “ “ 844,044 18,712 31,332
J. Gough (CSR) 7,738 530,000
• • • • • • • • • •
S. Wallis (Amcor) S. Wallis (Col. M.) I. Burgess (CSR) I. Burgess (Pac. D) C. Hewson (CSR)
2,000
•
D. Meilklejohn (Col. Mut.) S. Wallis (Col.M) S. Wallis (AMP) S. Wallis (Col. M.) D. Allen (NAB) B. Loton (NAB) J. Ralph (BHP) J. Ralph (Telstra)
• • • • • • •
Status of Director
• • • • • • • • • • • • • • • • • •
75,000 52,000 74,364 “ 280,257 “
C. Hewson (AMP) J. Morschel (Westpac) D. Clark (NZ Dairy Board) I. Burgess (Pac.D) I. Burgess (AMP) C. Goode (ANZ) C. Goode (Pac. D.) J. Gough (BHP)
•
Westpac - 7.5 Chase M.-4 National N.s 3.5 Qld Invest.1.5 AMP Fd. 1.4 185=36%
Chase M-11 Westpac- 7 Permanent –
Director’s name & Company of origin
22
89,494 130,437 247,642
-
11,168 2,259
3,000 242,748 160,000
P N N
Not given
HS/P HS/P HS/P N N P P P
•
57,692
• • • • • • • •
6 ANZ N- 6 National N-5
Qantas
CBA
British Air –25 Chase M-9 Permanent – 7 Westpac-6 National M-6
1
Westpac- 5 Chase M. 5 Nat. M. –3 ANZ M- 2 AMP-2
9
1
0
6
0
6
0
• • • • • • • • • •
Boral
National Australia Bank
Coles Myer
News Corp
FCL
AWA
Fosters Brewing
Westpac –8 Chase M. 5 Nat. N.- 4 Telstra – 3 Permanent-3 Westpac-8 Chase M.-5 Nat. N-4 ANZ N-4 Qld In.-2 Westpac-8 Nat. N-7 Chase M-7 ANZ N-4 Permanent-4 Chase M-9 Westpac 6 Voyager Distributing-7 MF Custodians-6 Permanent-5 Cruden-30 Citicorp-19 Westpac-8 ANZ N-6 Chase M-5 NZ Central Securities Depository-52 FCL Employees-4 SAS TrusteeAMP-.6 Belike N. 17 NRMA-9 Potter Warburg- 5 Permanent-3 BT Custodial-3 Westpac-16 Chase M- 15 Nat. N-11 ANZ N.- 4
4
0
0
0
1
0
0
0
2
2
4
5
3
2
8
8
60,964 1,814,400
10,000
25,276
10,602
• • • • • • • •
C C C NE NE NE NE NE
• • • •
NE NE NE Ex
• • • •
N N N P
Not given
• • • • • • • • •
NE NE NE NE NE NE NE NE NE
• • • • • • • • •
N N N N N N N N N
-
• • • • •
NE NE NE NE NE
• • • • •
N N N N N
• •
• • • •
MD C NE NE C C NE
• • • • • • •
P P N N P P N
• • • •
2,706,909 289,832 130,167 134,400
•
204,050
•
95,400
• • • • • •
J. Ralph (BHP) J. Ralph (Telstra) J.Ralph (Pac. D.) J. Ralph (Fosters) J.Ralph (Pioneer) K. Cowley (News Ltd) R. Adler (Telstra) J. Schubert (Pioneer) F. Swan (Fosters) N.R. Adler J. Ralph (CBA) J. Ralph (Pac. D.) J. Ralph (BHP) M. Rayner (NAB)
• • • • • • •
D. Argus (BHP) M.Rayner (Boral) D. Allen (Amcor) B. Loton (Amcor) S. Wallis (AMP) S. Wallis (Amcor) H. Lynch (Westpac)
59,612 • 19,772 • 11,050 • 159,837
• •
Telstra
J.Ralph (CBA) J. Ralph (Fosters) J.Ralph (Pioneer) I. Burgess (AMP) I. Burgess (CSR) M. Jackson (ANZ) M. Jackson (BHP) M. Jackson (Qantas) M. Jackson (ANZ) M. Jackson (BHP) M. Jackson (Pac.D.) G. Toomey (ANZ)
8,000 5,268 2,152 11,908
92,720 40,000
50,000
57,280 9,000
P P N N N N N
•
57,692
•
57,692
-
-
1
0
0
0
•
K. Cowley (CBA)
336,024
•
NE
•
N
-
1
0
0
0
•
R. Deane (ANZ)
268,468
•
NE
•
N
•
2
1
7 7
•
200,000 29,000
• •
C NE
• •
P N
-
•
T. Kennedy (Qantas) B. Healey (Fosters)
• • •
B. Healey (AWA) J. Ralph (BHP) J. Ralph (Telstra)
28,000 38,500
• • •
NE C C
• • •
N P P
• •
5
4
5 8
23
697924 697924
48,750
150,000 150,000
BT Cust.-4 Westpac
NZ Dairy Board Colonial Mutual
Chase M.-9 Westpac Cus.-9 Nat. Aust.-9 Lendlease-7 Nat. N-5
Westpac-6 Nat. N-6 Chase M.-5 Colonia5 AMP life-5
0
0
• • • •
J.Ralph (Pac. D.) J.Ralph (Pioneer) J. Morschel (CSR) H. Lynch (Coles M.)
2
0
1
0
0
0
•
D. Clark (CSR)
1
0
0
0
•
D. Meiklejohn
4,000 8,174
• • • •
C C NE NE
• • • •
-
•
NE
•
N
-
402
•
NE
•
N
-
P P N N
• •
Sources: Business Review Weekly 1000, Nov. 16, 1998, p. 120, Individual annual company reports, 1998. Key: 1. Status of director- NE = Non Executive, MD= Chief Executive Officer, C=Chairperson; 2. Directional interlock –P= primary, I= induced, t=tight, HS= high shareholding, N=Non-directional; 3. Type of interlock-N=total number, B=breadth, D=depth, C=centrality.
i
Sincere thanks for input but with no responsibility for content, goes to Tom Bramble, Catherine Hoyte, Allan Gardiner, Tom O’Lincoln, Frank Stilwell, Ted Wheelwright and two anonymous JAPE referees.
24
573,142 573,142
