DOJ Going After Interlocking Directorates

The Antitrust Division of the DOJ’s push to rigorously scrutinize interlocking directorates has forced some recent changes on corporate boards. It recently announced that five directors had resigned from four boards, and one company declined to exercise board appointment rights. The actions affected companies from the software, transportation, and insurance sectors. The board appointment rights of private equity firms, which allowed for different representatives on competing firms’ boards, were the issue at three of the interlocks. A fourth involved competing IT companies sharing a common director. The chair of the Senate Judiciary Committee recently called on the Federal Trade Commission to examine interlocking directorates in the pharmaceutical industry. The enforcement has yet to involve consent agreements or civil penalties, meaning the actions are not precedential. The DOJ has mostly relied on SEC filings to identify competing corporations.