Do interlocked directors affect the governance of companies?

Abstract The effect of interlocked directors on the corporate governance of listed companies is not easy to assess: interlocked directors are too busy and may not properly monitor the company but both good and poor practices may propagate through them. Adopting a network approach we show that companies sharing directors have similar governance but no significant effect on the quality of corporate governance is detected. The quality of corporate governance is mostly associated to a large quota of small shareholders, company size, the stake of institutional investors and of the State. JEL Classification: G34, L14