Abstract
Has globalization diminished the cohesion and influence of British corporate elites? I draw on data from The Times’ ranking of British business elites in the years preceding the 2008 financial crisis to address this question. The analysis finds elites with royal titles, Oxbridge educations, and English identities are not especially central in director networks. Despite being cohesive, director networks are globally diverse and the symbols of the British ruling class are not central in them. However, those symbols are important to centrality in director networks when taking into account strong ties. The similarity and familiarity of strong ties deepen the influence of symbolic capital in board networks because they place it in a social context. These findings suggest that corporate elites in Britain have a dual loyalty to both globalization and the traditional symbols of the British ruling class.
Globalization has diminished the cohesion and influence of national elites around the globe. Even before the recent wave of globalization, elites have had opportunities to work abroad because corporations have had offices in many different countries for decades. But now, cheap travel, the Internet, and the expansion of markets have eliminated other barriers to working internationally. Corporate elites regularly cross borders in their managerial and board positions. At the same time, scholars studying corporate elites see a fragmentation in their ranks. For example, Mark Mizruchi (2013) argues, after corporate elites in the United States were successful at expanding markets in the 1980s, they lost the need to unify against antimarket forces, such as labor unions and governmental regulation. Or, for instance, Johan S. G. Chu and Gerald F. Davis (2016) demonstrate that corporate networks in the United States have lost their cohesion and no longer display a clear “inner circle” that network researchers identified in earlier studies. In Britain, research argues that globalization has “disembedded” British corporate structures from the more cohesive relations that previously characterized them (Moran 2006). Interlocking directorates in Britain are more fragmented with multiple centers of power now that globalization has increased the interdependency of national economies (Scott 2003).
Recently, the unsuccessful warnings of some corporate elites in Britain against leaving the European Union (EU; “Brexit”) suggest their diminishing coherence and influence as well. The disconnect between corporate elites in London and citizens who globalization had left behind in the hinterlands was palpable during the run-up to and in the aftermath of the “Brexit” vote. Yet, Britain has never been fully integrated in Europe’s unified market. Britain has had an exceptional position in the EU because it is not part of the monetary union, but still enjoys the other benefits of membership. Perhaps, as an island separate from the continent, Britain’s persistent “Euro-skepticism” is understandable, but corporate elites in London have been reaping the benefits of being in the EU since the 1990s. London has become the center of European and global finance as more corporations locate offices in the city and individuals migrate there from abroad.
Has globalization diminished the power of the traditional symbols of the British ruling class? Does being a titled, Oxbridge-educated director from the home-counties still have symbolic power in British boardrooms? The boardrooms of top corporations have not historically been places of diversity. Positions on boards in Britain have been dominated by white males with particular kinds of high status affiliations and backgrounds. The underrepresentation of women and minorities is still very much in evidence in British boardrooms (and in the boardrooms of other countries as well). Other symbols of class dominance in Britain, such as English identity, Oxbridge educations, and connections to royalty, are not as conspicuous as white males.
I argue that Britain’s corporate elite displays a dual loyalty to globalization and the British ruling class. Much like Britain’s position in the EU, British corporate elites coexist with these different symbols of power. I draw on data from The Times’ ranking of the top corporate leaders in Britain, 2003–2006, to support these claims. These business leaders were the elite of the corporate world in Britain during the run-up to the 2008 economic crisis. I map out how top directors are connected through corporations to assess the centrality of elites. I emphasize the importance of strong ties (Granovetter 1973) by including not just current board relations of corporate elites, but their past work and board relations as well. I conceptualize the traditional symbols of the British ruling class as a kind of symbolic capital (Bourdieu 1996) that includes possessing a royal title, Oxbridge education, and English nationality. Symbolic capital is especially important in the British context because the institutions of its landed aristocracy have had enduring importance in society.
The network and other analyses demonstrate that centrality is dispersed among a globally diverse set of corporate elites for current board relations, but remains concentrated in the traditional symbols of the British ruling class for strong ties. Globalization has made the British corporate elite more cosmopolitan in the composition of its active board relations. But, the centrality of directors with the traditional British symbols of power in strong corporate networks supports ideas of the enduring influence of British ruling class. Embedded strong ties deepen the influence of the British ruling class because similarity and familiarity place symbolic capital in a more meaningful social context. The centrality of directors with British ruling class symbols is more subtle than is apparent in a straightforward analysis of current board relations. Other research has similar findings that illustrate how ruling class symbols influence British society in less transparent ways. Aaron Reeves et al. (2017) find the influence of elite British secondary schools has declined over the last 120 years, but still persists in channeling alumni to the ranks of the elite.
Directors and Symbolic Capital in Corporate Networks
I emphasize the personal side that power elite research (e.g., Mills 1956) demonstrates as important to corporate networks. Board relations have a duality in that they express both how corporations are connected to one another through directors and how directors share board memberships through corporations. The duality of affiliations yields different, yet related information about the structure of networks (Breiger 1974). Coming from the power elite research (e.g., Perrucci and Pilisuk 1970), this line of inquiry takes persons as the unit of analysis and multiple overlapping memberships as indicators of influence. Not only organizational forces, such as information, communication, and resource exchanges, but also the personal qualities that business leaders possess intersect with how corporate networks are structured. In making the shift of emphasis from the organizational to the director side of corporate relations, corporate network researchers are able to see how personal qualities of business leaders developed outside the corporation coincide with the structure of corporate networks.
The “Inner Circle”
Scholars have been studying director networks to assess whether there is a cohesive and coordinated ruling class. Scholars use the network concept of centrality to gauge the degree to which power is concentrated in an “inner circle” of directors (Useem 1984). Some directors sit on multiple boards for different organizational reasons, such as monitoring financially linked corporations or co-opting competitors. These central directors also become politically active and influential because they diffuse information, ideas, and innovations among the directorate (Useem 1984). For example, corporations that are interlocked have similar patterns of campaign contributions to candidates suggesting coordinated political action (Mizruchi 1992). Ultimately, scholars claim the existence of central directors creates an organizational basis for action and consciousness of the ruling class (e.g., Burris 2005).
Recently, many have suggested that globalization has diminished the “inner circle” because corporations recruit more directors from abroad. In the United States, there is even growing evidence that the “inner circle” has been vanishing over past decades (Chu and Davis 2016). In Europe, the Dutch director network displays less social cohesion than in the past (Heemskerk and Fennema 2009). The dismantling of economic barriers among EU member nations has changed the composition of boards to reflect corporations’ global reach. Research indicates a Europeanization of corporate networks that suggests the establishment of a transnational corporate elite (van Veen and Kratzer 2011). Whether a transnational elite displays similar cohesive and coordinated qualities as national elites remains unclear. However, evidence points to the fragmentation of national corporate elites during globalization.
Britain occupies a unique position in the EU because it has maintained control over one of the main levers of its national sovereignty, the British pound. The relative autonomy of the British economy should lessen the fragmentation of corporate networks. Thus, I do not anticipate the fragmentation of British corporate elite networks. Another quality of cohesive corporate networks is directors who are especially central to coordinate action and transmit information among business leaders. Thus, I also expect a centralized group of directors who are the main connectors among business leaders.
Symbolic Capital
How do persons enter this rarefied world? According to Michael Useem (1984), particularly important to centrality in corporate networks are persons’ affiliations with educational institutions, clubs, and social registries. G. William Domhoff (1998) has demonstrated repeatedly a strong relationship between those personal affiliations and being at the center of the corporate network. As a point of departure from previous director-centered approaches, I draw on ideas from recent research on British and French corporate elites (Harvey and Maclean 2008) that emphasizes the symbolic capital of directors’ attributes and outside affiliations. Previous director-centered researchers tend to highlight how elite affiliations create networks or social capital for persons. While persons undoubtedly create networks at these places, do most people who are alumni of, say, Oxford University recognize one another as part of the same network? It might be more plausible on the college level, but even there, as Roger V. Gould (2003) argues, the concept of social networks loses its analytic purchase when researchers interpret affiliations with large and diffuse collectivities relationally. This structural emphasis also gives short shrift to the symbolic meaning of such affiliations. After all, a bachelor’s degree from Oxford University has symbolic meaning that is distinct from the friends and acquaintances students make there. “Symbolic capital” emphasizes the external and internal recognition of these affiliations as legitimate symbols of power. Despite different emphases, social and symbolic capital both lead to the same conclusion about the importance of these affiliations to influence in top corporate networks.
In making this shift to symbolic capital, I aim to highlight the importance of both culture and networks to understanding corporate directors. The duality of culture and networks that pioneers in network analysis from social anthropology such as S. F. Nadel (1957) stressed is not given enough weight in network analyses. For example, Paul DiMaggio (1992) criticizes network research on organizations for its “culture-free” focus and overemphasis on pure structure. As this critique and others (e.g., Emirbayer and Goodwin 1994; Fuhse 2009), later innovators in network analysis are bringing in culture more explicitly to their relational analyses (e.g., Pachuki and Breiger 2010). Rather than independent of networks, culture is part and parcel to how networks operate.
I am emphasizing cultural attributes that induce recognition that their holders possess symbolic capital. Bourdieu (Bourdieu and Wacquant 1992:119) states that symbolic capital is the successful transformation of other capitals, such as cultural and economic, into legitimate power and domination. 1 According to David Swartz (1997), symbolic capital has affinities with Weber’s ideas on authority in that its power is not achieved through brute force and money alone, but mutually agreed upon and taken-for-granted practices and institutions that legitimate demands for recognition. Others “misrecognize” the power of those with symbolic capital as natural because the process of legitimation has disguised the arbitrariness and interestedness of the domination. Furthermore, the legitimacy of these symbols comes from the relative independence of the consecrators. Persons receive symbolic capital not from their fathers and lackeys but from more distant persons who deem they merit the distinctions for the work they have achieved. According to Pierre Bourdieu (1996:383), the power of such symbols is this subtle process of legitimation that makes it easier for outsiders to acquiesce to their authority.
Why is symbolic capital important to boardrooms? Charles Harvey and Mairi Maclean (2008) argue that symbolic capital is a crucial resource in boardrooms that offer legitimacy to holders. Symbolic capital can take the form of credentials, honors, and reputation (Harvey and Maclean 2008:107). In the context of corporate leadership, this means board members of esteem are rewarded not only for the distinctions themselves, but for the legitimacy they give boardrooms. For example, R. A. D’Aveni (1990) finds a negative relationship between bankruptcy and the prestige of managers in their political, military, and educational backgrounds. Other recent contributors to this line of inquiry (e.g., Westphal and Bednar 2005) are finding that the personal backgrounds of corporate directors have substantial effects on corporate strategy and performance. The evidence is convincing on the importance of persons’ affiliations with elite educational institutions to the composition and operation of corporate boards.
The term symbolic capital suggests people can accumulate symbols—some have more, others have less. But, symbolic capital probably does not increase at the same rate with each additional symbol; there are different combinations of symbols that have more salience than others. For example, the continued underrepresentation of women and minorities on boards suggests a strong connection between the combination of “white” and “male,” and board relations. There are significant qualitative differences among that combination and, for example, “white female” or “non-white male” that are not linearly related to centrality in corporate networks. Although combinations of symbols signal differently, the ability to accumulate certain symbols is still important to enter centers of power. The more influential symbols directors have, the more others grant them “the benefit of the doubt.” As I will argue after this discussion of symbolic capital, homophily or social similarity is also important to access to the center of corporate networks. But I conceptualize it relationally as a homophily between strong ties and categories of symbolic capital.
In the context of the British ruling class, there are multiple categorical distinctions board members can amass to be at the center of corporate networks. I focus on three symbols that have considerable salience in the context of British corporate boardrooms: Oxbridge educations, royal honors, and English identity. I bracket two other symbols, gender and race, because their power is so overwhelming in boardrooms that, as we shall see, nearly the entire population is white males. Artifacts such as a knighthood or a degree from Oxford have a “surplus meaning” (Hatch 1993) that comes to symbolize other actions and processes not related to what the persons did to receive those distinctions.
First, the symbolic capital that persons attribute to others with educational credentials is important in a market-democratic society that values the idea of meritocracy. Education is partly an expression of cultural capital as graduates develop certain tastes and knowledge that distinguish them from others. At the same time, top educational institutions produce credentials with reputations that precede holders of those qualifications. As Bourdieu (1996) argues (373–74), even though top educational institutions stress the importance of merit rather than birth as the basis of legitimacy, they operate in a similar way to traditional forms of authority by separating the chosen from the rest and, therefore, ordaining its members as sacred. In Britain, from an early age, educational institutions sort certain students into elite tracts starting with boarding schools and ending at the twin peaks of Oxford and Cambridge Universities (e.g., Ellis 1994; Reeves et al. 2017; Wakeford 1969). No longer primarily the playground of inherited wealth, the two ancient universities of Oxford and Cambridge still play a crucial role in consecrating graduates for distinguished careers in the professions. With the exception of the downwardly mobile aristocracy, every sector of the British elite has had a relatively stable and large proportion of its members with Oxbridge educations throughout 1995–2008 and across generations (Williams and Filippakou 2009).
Next, unlike other major European nations that toppled old aristocratic regimes through revolution or smaller ones that preserved remnants of their royal families, Britain still has a monarchy with considerable symbolic capital both domestically and abroad. The stability and longevity of the British royal family partly stem from its ability to adapt to the values of a market-democratic society. Many of the titles and honors that were chivalric in origin and then inherited through families are now handed out by political committees that favor the achieved status of recipients. Although still granting the “royal touch” (Bloch 1961) to holders, the British honors system elevates worthy persons for their past achievements. While titles and honors have become imbued with more mundane elements than the “royal touch,” the effects of its rituals are similar in demarcating the sacred from the profane.
Finally, not only as an ethnicity, Englishness occupies a dominant position as a symbolic identity in British society. However, the English identity, the recent “Brexit” vote excepted, does not lend itself to strident expressions of nationalism and goes relatively unnoticed in everyday discourse (Kumar 2000). English identity for a long time has been conflated with the British nation and empire because the monarchy and other important symbols of power have an English origin. Expressing this equivalence to this day is that England’s largest city, London, is also the geographical center of politics, culture, and economy of Britain. The conflation of the English identity with Britain has become even greater since devolution because the English have defended British sovereignty against the growing autonomy of Scotland, Wales, and Northern Ireland (Wellings 2007). The social distances of the Celtic nationalities from the English, however, are not all the same. Scholars have variously described the Scottish as junior partners in empire (Wallerstein 1980), occupationally specialized in professions (Hechter 1982) and part of an enduring Protestant culture (Marshall 1980). These characteristics, the argument goes, may make upper-class Scots socially closer to the English than the Welsh and the Northern Irish in the realm of the economy. Yet, despite this variation among Celtic nationalities, linking the Scottish with the English identity ignores the persisting categorical inequality between them.
The symbolism of an Oxbridge-educated person from the home-counties with a royal honor is clear. Institutions aligned with the ruling class in Britain and its illustrious imperial history have consecrated such persons for their knowledge, heroism, and loyalty. Carriers of all three of these attributes symbolize not just the elite of the mind and territory, but of the sword as well. Michael Lisle-Williams (1984) argues that banking elites from the city have grafted themselves onto the institutions of the landed class that both aided their social cohesion and legitimated their actions. Thus, I anticipate that symbolic capital will positively influence centrality in corporate networks.
Strong Ties 2
What is the mechanism that links symbolic capital to centrality in corporate networks? Symbolic capital implies possessing attributes in legitimate institutions of power as presenting opportunities to boardrooms. I argue that strong ties of directors who share a work history and relations in different contexts deepen the influence of the traditional symbols of the British ruling class in corporate networks. Symbolic capital gives access to the center of corporate networks when coupled with similarity of experience and familiarity in different contexts. In other words, homophily strengthens the power of symbolic capital in corporate networks.
Before we discuss why strong ties are important in the specific context of boardrooms, I turn to the definition of strong ties. Scholars interpret board relations between directors as strong ties because directors interact with one another in a small group for hours at meetings a few times a year. However, I make a distinction between the latter and stronger ties. According to Mark Granovetter (1973), strong ties represent a set of interrelated qualities of relationships that include shared history, multiplexity, and other qualities. First, I emphasize shared history as a part of strong ties. Persons rarely develop strong ties immediately; they need time together to strengthen their bonds. The passage of time is dotted with events that people share with one another as low or high points. Similarity of experiences can deepen the relations of persons. According to David Krackhardt (1992:219), a strong tie “must have a history of interactions that have lasted over an extended period of time.” An “old school tie” might even lay dormant for years and only become activated as a strong relationship with new opportunities. Next, Alain Degenne and Michel Forsé (1999:109) discuss the idea of multiplexity as an important part of strong ties. Knowing one another while occupying different social roles, such as coworkers and board members, can deepen relationships among persons. Researchers have found multiplex relations that lead to closure and social density not only in rural populations, but in more modern contexts as well (e.g., Wellman 1979). For corporate elites, multiplexity with other directors might establish or reinforce norms of a culture with which they have been involved jointly. However, as Claude S.Fischer (1982) points out, high status positions, such as those which corporate directors occupy, moderate the dependency on other persons’ opinions and gives holders greater autonomy. Together, strong ties are embedded relationships that include the past and present interactions in different contexts.
In the corporate world, board directors are not only connected to one another through their current board affiliations, but have past work and board relations that solidify those ties. For corporate directors, shared history and multiplexity are particularly relevant to the establishment of strong relations because directors may have known one another while climbing the corporate ladder and in multiple contexts, such as different corporations and managerial positions. Business leaders often occupy positions on corporate boards in the latter part of their careers because they have gained knowledge from their past work experiences. Although from an earlier period and different context, historical work affiliations can still be important connections for corporate leaders as they may have gained a reputation earlier in their careers at a certain corporation working with specific persons. As Jackall ([1988] 2010:25) explains about corporate managers, “[They] carry around in their heads thumbnail sketches of the occupational history of virtually every other manager of their own rank or higher.”
Multiplexity or knowing people in multiple contexts is one of the main principles that guide the creation of reputations. Stephen Hill’s (1995) research uncovers that managerial skill is not enough to be elevated to board positions and that “personal qualities are paramount at this level” (Hill 1995:251) because directors provide a broad, strategic vision for the corporation. The strength of business leaders’ personal relationships is going to matter to achieve a favorable reputation and garner influence. As Hill (1995:273) concludes, boardrooms are “where personality, reputation and influence matter greatly . . . [Managers] have to be well known by senior colleagues and have established reputations . . . Personal recommendation is a prerequisite for non-executives”. Directors value the trust that strong relations engender within the board because they make decisions about strategy and risk. Such decisions can be fraught with uncertainty that require leadership to anticipate. Indeed, Krackhardt (1992) finds strong ties are especially important to reduce uncertainty in organizations.
Given how important work histories and personal recommendations are to corporate business leaders, similar experiences of directors and familiarity with one another in different contexts are crucial to centrality in corporate networks. Strong ties deepen the importance of the symbolic capital of directors because they place those symbols in a more meaningful context. Social similarity of directors is particularly noticeable with strong ties. Directors’ shared history and multiplexity are often homophilous with not only being a white male, but also having a royal title, Oxbridge education, and English nationality. This kind of relational and categorical similarity affords directors central positions in corporate networks. Whether this homophily is a reflection of peer influence instead is difficult to isolate without temporal ordering. 3 Both peer influence and homophily are likely to affect the network positions of directors. Nevertheless, the relational familiarity gives directors with symbolic capital more of “the benefit of the doubt” to occupy central network positions than those lacking the depth of those relationships. Thus, I anticipate that strong ties will amplify the influence of symbolic capital in gaining access to the center of corporate networks.
Data and Methods
The data come from The Times which ran a special supplement to its daily newspaper titled “The Power 100.” The supplement ranked the top corporate leaders of FTSE 350-listed corporations annually in early November from 2003 to 2006. 4 The supplement has a social meaning because the ranking was published in, what was at the beginning of the sample, the largest “broadsheet” newspaper in Britain which allowed members and others to see who was listed.
Over the course of four years, The Times’ Power 100 (TP100) listed 173 persons as members. This was a period when the value of the FTSE 350 Index grew rapidly from its nadir after the end of the technology boom in early 2003 to its height before the decline of markets in autumn 2007. Corporate leaders in the ranking sat on the boards of 163 corporations from the FTSE 350 during 2003–2006.
The ranking is based on criteria of the corporate board seats that persons hold. While The Times did not provide the exact weighting for each criterion, they are organizational measures and not based on reputations or the opinions of journalists following events in the city. The first criterion is the greater the market capitalization of the corporation that a person serves as board member, the higher the ranking he receives. Second, a person receives more status if he has an executive rather than a nonexecutive directorship. Next, greater status is conferred on a person who chairs a board of directors. Finally, the number of corporate board seats a person possesses—the more directorships, the higher the ranking. These factors change and account for persons exiting, entering, falling, and rising in the rankings from year to year.
Much like organizational research that samples the top 100 companies, or 500, 250, or 50 subpopulations, this research limits the boundaries of the population to the top 100 corporate elites based on the above positional criteria. Cutoff points of samples such as these partly reflect the practicalities of enumerating relations among sampled actors. In this case, The Times did not enumerate beyond the 100 most influential business leaders. There are directors on boards of FTSE corporations who are not listed in the TP100. The distinctiveness of this sample is its social significance to name and rank publicly directors for readers, and indeed for members of this exclusive group, to consume.
Previous network research (e.g., Heemskerk and Fennema 2009; Useem 1984) uses the criterion of at least two directorships to define membership in top corporate networks. By contrast, The Times definition is more diverse including positional criteria that do not increase the potential relatedness of the sample. But, I did choose this population partly because these corporate elites are likely to have networks to analyze—the motivation of the study in the first place. Nonindependence is an inherent property of network samples.
I do not address the question of dynamics for a number of reasons. Substantively, there were not obvious economic events that could have far-reaching effects on corporate elites during 2003–2006. The Times ceased publishing the TP100 list in 2007 when markets began to decline before the financial crisis of 2008. More formally, there were minor changes in corporate leaders’ portfolios of board seats over the four years. However, when I analyzed each year separately, the data consistently supported the main argument and did not indicate trends in directions that complicated, enhanced, or contradicted it. I also explored potential dynamics by analyzing the mobility of corporate elites in the TP100 as new recruits, exiters, stayers, and so on. 5 None of these dynamic analyses yielded meaningful results that either advanced or undermined the main argument. Therefore, I have collapsed the four years into a single period.
Elite Attributes
Along with their seats on boards of directors, corporate leaders possess characteristics relevant to understanding their status. The TP100 and archival information from public sources reveal additional demographic, organizational, educational, and honorific attributes of corporate leaders. First, the TP100 includes the gender and age of TP100 members.
Organizations
The TP100 also contains information about the characteristics of the organizations for which corporate leaders work. First, it lists the remuneration that corporate leaders receive including annual salaries and cash bonuses for each corporation they serve as board members. Next, it catalogues whether TP100 members are currently occupying CEO positions. The list also identifies the economic sectors of board members’ corporations (e.g., retail, media, leisure). The Times placed the corporations into 18 supersectors that the Industry Classification Benchmark (ICB) defines for the FTSE indexes. The placement of some corporations in supersectors was inconsistent from year to year, and the division of the economy into the supersectors is fine-grained. Therefore, I applied the ICB’s broader industry classification which limits corporations to 10 industries (ICB 2008).
I gathered from company Web sites additional elite attributes of nationality, education, and honors. I also used electronic databases from a private, independent company (e.g., SGA Executive Tracker) that tracks corporate executives to obtain biographical information on board members. In addition to these electronic databases and company Web sites, I read interviews in newspapers with TP100 members to support and supplement these sources on elite attributes.
Nationality
I collected the nationality of corporate leaders making the distinction between foreigners and natives. Some members had dual citizenship in the United Kingdom and another country. Despite taking up permanent residence in the United Kingdom, I categorize persons born, raised, and educated outside the United Kingdom as foreigners. 6 I also make the distinction between the nationalities of natives, such as Scottish and English.
Education
I gathered information about the educational history of corporate leaders. I determined the institutions, if any, at which TP100 members completed university. Next, I make the distinction between corporate leaders with degrees from Oxford or Cambridge Universities and those with degrees from other universities and polytechnics. I tried to gather information about secondary educational institutions, but a majority of members did not list where they went to school.
Honors
Another noticeable feature of TP100 corporate leaders is their relationship to the British aristocracy. Corporate leaders have a number of titles, including “Lord,” “Baroness,” “Sir,” “Dame,” and “Lady.” In an effort to adapt to an increasingly market-democratic society, the British aristocracy has expanded the number of nonhereditary peerages. Although still tied to the land (e.g., Lord Kerr of Kinlochard), life peers earn their titles through the recommendations of political parties and nonpartisan committees. Beneficiaries are not able to pass these peerages to their offspring.
Another innovation of the British aristocracy has been to rely increasingly on the honors system to include commoners from civil society. The monarch confers these honors on persons in various sectors of society for their service to the British Empire. Knighthoods have a limited number of persons conferred with the title of “Sir” or “Dame.” The lower ranks of the honors system, i.e., CBE, OBE, and MBE, have fewer or no limitations on the number of members. Therefore, for the purposes of this research, only those persons with knighthoods are considered titled.
TP100 members did not receive royal titles during the sampling frame; they received them before being listed as a TP100 member. However, they may have been honored while occupying a seat on a corporate board earlier in their careers. Unlike other attributes that elites acquired before joining corporate boards, business leaders may have received titles for being successful in an earlier period of their corporate careers. Nevertheless, having a royal title is not a factor that goes into being ranked in the TP100 during 2003–2006.
Symbolic capital
I capture the concept of symbolic capital with three elite attributes of having a royal title, English nationality, and an Oxbridge education. The term symbolic capital implies both quality and quantity. On the one hand, the term suggests different symbols and their combinations have different qualitative meanings. On the other hand, it indicates the amassing of symbols is an interchangeable currency. I construct a set of categorical variables to understand the different combinations of symbolic capital. The full range of combinations of these three attributes has eight categories and some with as little as one or two cases in a single combination. The small number of cases in some categories calls into question the validity of using the full range of combinations. Therefore, I aggregate attributes and their combinations into three categorical variables. I aggregate attributes into a categorical variable of symbolic capital and use interaction terms to capture different combinations of two and three attributes. 7 Tests for each of the three items support the construct validity of my indicators. I also tested the variables on different and related outcomes, like economic sector and ranking in the TP100. Those analyses produced significant results suggesting the reliability of the variables as well. 8
Director and Strong Tie Networks
I use Ronald L. Breiger’s (1974) transformation to produce a square matrix from the rectangular 173 director by 163 corporation matrix. The matrix represents corporate leaders’ common board memberships. I call this matrix “the director network.” A relation in this network means that two corporate leaders share a membership on the same board of directors during the sampling time frame. 9 The resulting network has 831 single and 13 double shared memberships.
Strong tie network
The director network described above excludes career board and extra-board work relations of the TP100. The strong tie network is derived from two sources in the TP100 that capture some of the main characteristics of Granovetter’s (1973) definition of strong ties—the amount of time and multiplexity. I aggregate these characteristics and represent them in one single matrix called “strong tie network.”
First, the strong tie network comes from board relations of corporate leaders based on their career paths. The TP100 gives a career summary for each TP100 member that lists their previous chief executive positions and directorships in corporations. I included previous positions only if they were in corporations listed on the FTSE 350 during 2003–2006. Members had directorships at an additional 47 FTSE 350 corporations. I used Breiger’s (1974) method again to produce a single-mode matrix representing the career board relations of directors. I consider persons sharing two or more board relations as having a strong tie to capture not only the idea of duration, but the idea of multiplexity as well. I excluded single relations in the network and recoded two relations as a single strong tie and three relations as two strong ties (there were not relations higher than three). The resulting matrix is the strong career network.
Second, the strong tie network comes from The Times’ reckoning of deep-seated relations between business leaders. The Times calls them “ties that bind” defined as “relationships between individuals where two separate connections, made at two separate companies, are apparent” (Wheatcroft 2003:3). I transformed their identification of a strong tie into a matrix format. There are three different ties that can be made in this definition: a shared board membership, a shared work relation as managers in the same company and a relation where one business leader serves on a board of a company and the other works as a high-level manager in that same company. The Times assigned “ties that bind” for the TP100 from a combination of at least two of these three ties capturing the idea of multiplexity.
The strong career and “ties that bind” networks have 54 and 84 ties, respectively. Of these 138 ties, 45 were both strong career and “ties that bind,” nine were only strong career, and 39 were only “ties that bind.” I eliminated double counting because the two networks are based on similar data. The resulting strong tie network has 93 ties. Seventy-five relations are single strong ties, and nine are two strong ties in the network.
Director-strong tie network
I finally added the director and strong tie networks together to analyze them as a single network. I did this to eliminate the possibility that results could become artefacts of separating relations from each other. But combining them, I figured out where the two matrices intersected. I made sure I did not double count intersecting relations because the director relations by definition contributed to the strong tie network. The resulting network had 963 relations—of which 786 were single, 75 were double, and nine were triple ties
Network methods
I analyze the structure of director and strong tie relations using standard network measures. 10 I uncover the centrality of corporate actors based on their position in the network. Previous research uses variations of network centrality to capture the idea of influence among elites (e.g., Perrucci and Pilisuk 1970) that is motivation of the TP100 in the first place. However, instead of organizational or interactional criteria to rank the power of business leaders, network centrality measures position in terms of persons’ social relationships with one another. Previous research (see Scott 2000:96–99) has often used rank centrality and its variations as a way to measure influence in corporate networks. Essentially, rank centrality captures the idea that an actor’s centrality depends on the centrality of others she is connected to. So, for instance, if a person only has one tie, but it is to the most central actor in the network, then that person is “ranked” high in centrality because she is connected to the top person in the network. I use eigenvector centrality to “rank” directors’ positions in the networks. 11 Rank centrality also agrees with my expectations about the networks as cohesive with a single center of gravity. If my expectations for the networks were as fragmented, betweenness centrality, for example, would be a more appropriate measure to capture centrality in the networks. By contrast, the structural quality of cohesive corporate networks is its single center of gravity that the global measure of rank centrality captures.
Findings
As Table 1 reveals, the clichéd “old boy network” is an apt description of the TP100. Only 12 women are represented totaling 7 percent of TP100 members. One woman holds a chief executive position and the rest have several seats in different corporations perhaps to make up for women’s underrepresentation in boardrooms. Not only are the rankings a boys’ club, they also have older members. The average age is 56, and only three persons are under the age of 40. Finally, the adjective “white” should be added to the description of the “old boy network” because the TP100 is entirely white, save for a single Asian Indian member.
Descriptive Statistics of Elite Attributes.
A majority of the TP100 is from England at 62 percent. The English account for a high proportion of natives at 85 percent. The Scots, Welsh, and Northern Irish account for the remaining 15 percent of natives. Scottish is the most frequent nationality among non-English natives, then Welsh and finally Northern Irish. This distribution of nationality is essentially the same as the population of Britain as a whole. Around a quarter of the population comes from countries other than the United Kingdom. Thirteen different foreign nationalities are represented in the rankings with the most frequent nationalities being American and then Dutch. The high number of foreigners represented in the TP100 reflects the global reach of corporations operating in Britain.
Oxbridge undergraduate educations are overrepresented in the ranks of the TP100. Considering the hundreds of higher educational institutions that native university graduates could have attended, over 40 percent of them went to Oxford or Cambridge. Even among foreign members, similar elite institutions are overrepresented in the educational backgrounds. For example, eight of the 14 Americans in the rankings went to Ivy League universities as undergraduates. Among university-educated natives, a majority of TP100 members attended non-Oxbridge institutions. Those institutions were mainly red-brick universities, but there were a few polytechnics among them. Table 1 documents that nearly a quarter of the TP100 did not even attend university. Members who did not attend university usually trained to become chartered accountants or left high status, public secondary schools.
As Table 1 catalogues, a quarter of the TP100 has a strong relationship with the British aristocracy possessing peerages and knighthoods. Considering another quarter of the population cannot even possess titles as foreigners, the proportion is higher: one out of three natives has either a knighthood or a peerage. Knighthoods are the most frequent honors with over three-quarters titled as “Sir” and “Dame.” The remaining honors are peerages with such titles as “Lord” and “Baroness.” Among these, there are only life peers and no hereditary ones in the TP100. Given the absence of hereditary lordships and baronetcies, TP100 members achieved their titles rather than received them at birth.
Table 1 reveals that the average annual earnings of a top board member are around £900,000. Chief executive officers enjoy considerably higher earnings than ordinary board members because, along with serving on the board, they hold the highest managerial position in the corporation. A majority of the TP100 holds top executive positions.
The financial sector is an important feature of the British corporate world. Reflecting this importance, Table 1 documents TP100 members have the most affiliations with the financial sector. Nearly half of TP100 has at least one corporate seat at a financial institution. The next most frequent affiliation of the TP100 is with consumer service corporations, such as Tesco and other high-street retailers. After that, there is a steady decrease in the frequency of affiliations with the remaining sectors.
Nearly 70 percent of the TP100 has some kind of symbolic capital. But, more than half of those is just a single symbolic capital of either having a royal title, English nationality, or Oxbridge education. The number is smaller for the higher combinations of symbolic capital with the interaction of two and three having around 20 percent and 10 percent, respectively. Even though symbolic capital has fewer in the higher combinations, taken together, they still represent a large minority of TP100 members.
The Director and Strong Tie Networks
I first discuss the director network of TP100 members during 2003–2006. As Table 2 catalogues, corporate leaders on average held seats on around three different corporate boards. In total, TP100 held 461 seats in 163 different FTSE 350-listed corporations. There are 857 shared board memberships among the TP100. There are on average around three degrees of separation between any two TP100 members. The furthest distance between two members is six degrees of separation. This high connectivity gets expressed on the ego level as well. On average, a TP100 member is connected to almost 10 other members. Nearly three-quarters of the TP100 have ties to between four and 12 other members, but one has as few as a single connection and two have as many as 27 ties.
Properties of Corporate Networks.
The strong tie network not only has directorships, but includes work positions as well.
Number reflects the properties of the main component only.
Isolates only in the definition of the strong tie network because they do have ties in the director network.
The overall structure of the director network is a single cohesive component and not fragmented. There are not any directors forming groups separate from the single component. Moreover, the sociogram of the network reveals there is no distinct competing or even alternative factions within the main component (see Figure 1). The nodes represent TP100 directors, and the lines express shared board. The strong ties are represented in the figure by thicker lines between the nodes. The size of the nodes reflects the eigenvector centrality scores for each director. For networks like these, whether you have weak ties to a third party is relatively unimportant because everyone already knows one another. What distinguishes actors from one another in these kinds of networks is the depth of their relationships. Yet, the director network represents only current board relations. The strong tie network has these deeper, more embedded relations.
Centrality in director network with symbolic capital.
Table 2 catalogues that less than half of TP100 members have at least one strong tie; more than half of TP100 members are isolates with no strong tie connections to any actor. The exclusivity of having a strong tie goes with the idea of the “inner circle” that only a few persons are part of the group. The most between two actors is nine strong ties and, for those with strong ties, they average around two strong ties. The main component in the strong tie network is much more centralized than in the director network. The sociogram of the network (see Figure 2) resembles a “star network” that characterizes hierarchical structures. The network centralization indices in Table 2 document that the strong tie network is over two times more centralized than the director network. Whereas the director network reveals a great deal of interconnection, the main component in the strong tie network shows persons have to go through a few key actors to reach someone else in the network.
Centrality in strong tie network with symbolic capital.
Finally, the different shades and shapes of Figures 1 and 2 represent whether TP100 members have symbolic capital or not. For the director network, it is hard to see a pattern of symbolic capital. This is partly a reflection of the dense structure that makes it hard to differentiate sections of the network. But, even looking at the center and around the edges does not illuminate a pattern of shades and shapes. On the contrary, there does appear to be a preponderance of directors with symbolic capital in the main structure of the strong tie network and its other components. However, do these observations stand up to rigorous scrutiny taking into account other factors? And, are there qualitative differences among different combinations of symbolic capital?
The Symbolic Capital of British Business Leaders in Corporate Networks
Does symbolic capital give access to the “center” of the corporate world? And what about taking into account other forces, like organizational factors, that might coincide with network centrality? Table 3 provides an answer to how symbolic capital influences network centrality. I use nonparametric tests for the multiple linear regressions and report the effects of the standardized coefficients on the normalized centrality scores. 12 I have included only the basic attribute of age to control for its effect on centrality. I did not include the attributes of gender and race because the population is almost entirely white males. I assess the relative importance of factors that organizational research stresses with business leaders’ earnings, positions, and economic sectors.
Elite Attributes Predicting Centrality.
p < .10. **p < .05. ***p < .01. Two-tailed probability
First, support for symbolic capital is not apparent in the director network model. The disaggregation of symbolic capital into combinations does not reveal any particular combination as significant either. Even the original elite attributes taken on their own have no significant impact on centrality. The coefficients indicate that symbolic capital hurts directors’ centrality, but their magnitude is small and impact is statistically insignificant. There is no or an uneven relationship between symbolic capital and centrality in the director network. These latter findings do not support the argument that symbolic capital influences network centrality.
But, the impact of symbolic capital on networks is substantial in the models with strong ties. Business leaders’ symbolic capital has a significant, positive effect on their centrality in the strong tie network. The disaggregation of symbolic capital into combinations supports this and points to the increasing significant effect of having combinations of symbolic capital. The combination of having a royal title, English nationality and Oxbridge education has a greater impact than any other category of symbolic capital. And, among the original elite attributes, only being titled has a significant effect on centrality. The relative insignificance and weak effect of these variables stand in contrast to symbolic capital and the increasing significant effect of its interactions.
The director-strong tie model also supports the argument that symbolic capital gives access to centrality in networks. While the magnitude of the effect is slightly less than strong tie model alone, the significance of symbolic capital to centrality does indicate that it is not an artefact of separating out the strong ties from current board relations. In other words, even when including current board relations with strong ties, symbolic capital has a significant positive impact on centrality. The combinations of symbolic capital continue to show a significant effect on centrality except for the single symbolic capital category. The advantage of having higher combinations of symbolic capital is even clearer here than in the strong tie model as their impact increases steadily across them. The effect of the original elite attributes washes away with the re-introduction of the director network. Again, these original variables are not as robust as symbolic capital and its combinations.
There are also significant patterns in a few other variables. In all the networks, there is not one economic sector that dominates; business leaders with affiliations in five of the 10 economic sectors have central positions. Only business leaders with board affiliations to oil and gas corporations are steadily more central across all the networks. The significance of oil and gas affiliations to centrality may reflect that oil and gas prices were at historic highs during much of the early to mid-noughties and, therefore, their corporate leaders were especially influential during this period. The significance of the financial and telecom sectors to centrality in the networks washes away when taking into account the strong ties of directors. The financial sector has especially been central in corporate networks because banks play an important role in supporting production and services. The two models with strong ties suggest the centrality of the financial and telecom sectors might partly be a reflection of having board members with deep-seated relationships and symbolic capital. The results also demonstrate that the basic materials and health sectors are more significant to centrality after taking into account the strong ties of directors. This suggests that these sectors do not rely heavily on board members with strong ties and symbolic capital to make them central in corporate networks.
Overall, symbolic resources are important for centrality in strong tie relations; for current relations of corporate leaders, symbolic capital plays a significant role only when combined with strong ties. Also, strong ties moderate and amplify the effect of different economic sectors on centrality suggesting part of their centrality in corporate networks is a reflection of variations in deep-seated relationships of directors with symbolic capital.
Discussion and Conclusions
English corporate leaders with Oxbridge educations and a connection to royalty are well represented in the TP100. But, so are business leaders from other countries who occupy over a quarter of members in the TP100. Other personal attributes business leaders listed in the rankings also confirm widespread findings that women and persons of color are underrepresented as directors in boardrooms. Even though the TP100 has a globally diverse set of directors, the structure of current board networks is not fragmented. “Outsiders” have not formed subgroups distinct from main network of business leaders. The cohesion of globally diverse director networks suggests there might be a transnational elite who work in various global cities and integrate fully into corporate networks. At the same time, there is an exclusive group of directors at the center of the network who have similar work histories and familiarity in different contexts. This suggests that there exists an “inner circle” of corporate elites.
However, corporate elites who possess the attributes of the traditional symbols of the British ruling class are not more central than those who do not in the active board relations of the director network. This does not support expectations about the role of symbolic capital in director networks. Symbolic capital is not a currency that produces centrality in current board relations of corporate elites. Central business leaders have diverse national and educational backgrounds and do not especially possess royal honors in the director network. This finding suggests British corporate elite has globalized to the extent that there is not a clear “inner circle” of national elites in active director networks. Globalization has increased the presence of “outsiders” on boards that make it difficult to maintain the cultural coherence of well-connected directors.
However, the centrality of business leaders with symbolic capital and its combinations is visible on a deeper relational level. English corporate leaders with elite educations and a relationship to the crown are central figures in the strong tie and director-strong tie networks. Their centrality is subtle because they are only expressed when taking into account strong ties. The shared history and multiplexity of strong ties are the mechanism that links this symbolic capital to centrality in corporate elite networks. Embedded relationships deepen the importance of ruling class symbols to being central in corporate elite networks. The symbols of the British ruling class alone are not enough in Britain’s globalized economy to be central in corporate networks; they have to be combined with similarity and familiarity for elite directors to gain access to the center of corporate network. It may have been in the past current board relations were strong enough to induce similarity and familiarity among central directors. Since the expansion of markets, a globally diverse directorate may have diminished the strength of ties in boardrooms making past relations more important to centrality in corporate networks.
These findings highlight that class symbols do have an effect on corporate influence—although they are harder to pin down. Class power is less blatant than in the past, but still able to maintain its importance through more subtle forms of domination. An alternative interpretation of these findings could be that they indicate the withering away of ruling class symbols. With the passage of time, such an argument goes, these symbols have less centrality to corporate networks and only register while taking into account historical relations at a time when they were more important to boardrooms. But, Oxbridge educations, royal honors, and being English continue to be overrepresented or, at least, well represented among British business leaders. The distinctions of symbolic capital are not “token” representations on corporate boards.
The coexistence of a globally diverse directorate and the continued importance of the symbolic capital underscore the dual loyalty the British corporate elite has to both globalization and the traditional symbols of the British ruling class. These findings have implications for understanding recent events in Britain surrounding efforts to leave the EU. After years of integrating with global and European markets, the personal backgrounds of British corporate elites reflect those change as well. And while London and the city globalized and have been more pro-Europe than the hinterlands of England, the traditional ruling class maintained its centrality in boardrooms in the years prior to Brexit, if more subtly than in the past.
Footnotes
Declaration of Conflicting Interests
The author(s) declared no potential conflicts of interest with respect to the research, authorship, and/or publication of this article.
Funding
The author(s) received no financial support for the research, authorship, and/or publication of this article.