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Interlocks or cross directorship refers to the situation where directors sit on more than one board....

Interlocks or cross directorship refers to the situation where directors sit on more than one board. Briefly explain TWO (2) advantages of interlocks or cross directorship.

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Answer #1

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Two benefits of interlocks:

1. A director who is experienced and worked across various sectors during career can bring a lot of variety to the board room .He can help the company identify any macro trends that may affect the organization and to see the bigger picture.

2. There is a trickle down effect when directors are common across boards. A director may implement the best practices that they see on other boards which can add immense value to the company. This helps in the business competing against its peers in a more effective manner.

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