Communities Detection as a Tool to Assess a Reform in the Italian Interlocking Directorship Network

Interlocking directorships are important communication channels among companies and may have anticompetitive effect. A corporate governance reform was introduced in 2011 to prevent interlocking directorships in the financial sector. We apply community detection techniques to the analysis of the networks in 2009 and 2012 to ascertain the effect of such reform on the Italian directorship network. We find that, although the number of interlocking directorships decreases in 2012, the reduction takes place mainly at the periphery of the network. The network core is stable, allowing the most connected companies to keep their strategic position.