Society and Business Review

Directors’ networks and access to collective resources

Gaétan Breton Saidatou Dicko
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Society and Business Review, Vol. 10 Iss 3 pp. 223 - 238
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Directors’ networks and access Collective

resources
to collective resources
Gaétan Breton and Saidatou Dicko
Department of Accounting, Université du Québec à Montréal,
Montréal, Canada
223
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Received 27 June 2015

Revised 27 June 2015
Abstract Accepted 2 July 2015
Purpose – This paper aims to illustrate the resource dependency theory by making ties between the
different resources needed by a firm and the members of the board through their allegiances to different
organizations. Many researchers have explained the formation of the board through a controlling
function. Alternative explanation is proposed by the resource dependency theory.
Design/methodology/approach – To investigate the case of the largest company in Canada, the
authors took their data in the Boardex database. Then drawing an affiliation matrix, they used the Pajek
software to analyze these connections. They obtained a non-directional social network prone to
illustrate the resource dependency theory.
Findings – The authors found different categories of resources being placed at firm’s disposal:
political, social and economic, under different forms. Because a case study approach was used, the
findings will be used to complete the theory rather than confirm or contradict it. The case firm is
well-connected at every level, although having a quite conservative board: only one woman, no
representative of the social or environmental worlds. Through a program for designing networks, the
authors show that board member’s networks are encompassing a spectrum of resources. Comparing
with a previous study, it was found that the proportions of these resources remain the same in 2013 than
in 2007.
Research limitations/implications – This case is a very large group. Therefore, it can be expected
that it will need every kind of resources. It might be interesting to replicate the study on smaller firms.
The results imply that boards may not be the best structure to control the firm’s inside activities.
Originality/value – Although many theoretical papers exist on this question, the board is mainly
studied through the insiders/outsiders dichotomy, but there are few practical studies taking the
resource dependency theory perspective.
Keywords Organizations, Board of directors, Connections, Social network, Affiliation matrix,
Resource dependency theory
Paper type Case study

Introduction
In this paper, we investigate the ties between the nomination of board members and the
different external resources needed by a firm. Using a case study approach, we
document the ties between the members of the board of a major Canadian firm and
different categories of resources. We also compare our results with those of a similar
study made on data gathered in 2007. The purpose of a network is to circulate
information fast and efficiently. Board members are communicating with people in their
networks, and they receive information on the situation of the resources and who Society and Business Review
controls it. Vol. 10 No. 3, 2015
pp. 223-238
According to the resource dependence theory, the board of directors (BD) is a way for © Emerald Group Publishing Limited
1746-5680
the company to connect with their environment and acquire the resources needed. Some DOI 10.1108/SBR-06-2015-0020
 SBR authors argue that this acquisition of resources depends on the directors’ social
10,3 networks (Breton and Pesqueux, 2006; Dicko, 2011; Dicko and Breton, 2013a, 2013b).
However, the current literature does not tell much about the extent and nature of all
possible networks that a company could get through its BD. The economic networks are
more widely studied through the concept of board interlocks. We highlight a number of
categories of networks from a multinational group seldom investigated.
224 To explain the formation of a BD, we will refer to the resource dependency theory.
Then, we will use some tools from the network theories to help describe the relationships
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between persons and organizations. The next section will refer to the resource
dependence and social capital theories, while the third section will discuss our
methodology. The fourth section presents and analyzes the results, and the fifth section
concludes.

Networks and dependence on resources

The resource dependence theory argues that the members of the BD are appointed in
function of their networks of social relationships to allow the firm acquiring strategic
resources. Networks appear to be an essential instrument in societies and, therefore, in
business:
Far from being some remains of the paleo-industrial era, these dense networks, both
interpersonal and inter-organizational, constitute the very basis of modern industries like the
high technology of the Silicon Valley or the fashion industry with Benetton. (Putnam, 2006,
p. 36) (Our translation)
Moreover, we argue that, by nature, a firm is embedded in a series of networks (Breton
and Pesqueux, 2006). Every group, within the firm, including the firm itself, has
developed different networks that can be mobilized to provide help and resources. Here,
we will study only a part of all these possible networks.
We rely on the theoretical basis of the resource dependence theory, to explain the
strategy of the organizations passing through the board, to ascertain the availability of
strategic resources. However, we argue that these co-optations are rarely function of a
specific need at a precise period, but are organized for the long-term performance. Social
capital is deployed and useful in the long term (Bourdieu, 2006; Granovetter, 2008). For
Bourdieu (1980), social capital represents the social effects of the ability to mobilize the
economic and cultural capital of a group more or less officially constituted. The social
capital of an individual includes its networks of relationships and the advantages that
he will obtain from these, his right to pretend to be part of some groups and to be
considered and treated as such (Bourdieu, 2006).
For the resource dependence theory, the survival and the success of an organization
depend on its ability to obtain and efficiently use the resources of its environment (Bain,
1959; Porter, 1980). BD’s members can then be considered as a mean for the organization
to deal with its environment (external resources). Boards’ members are reputed to act as
communication channels to sustain the legitimacy of the organization toward the
general public and allow it to acquire the resources essential to its success (Pfeffer and
Salancik, 1978).
When the firm is facing difficulties attributable to a deficiency in the control of its
environment, it can use the board as a mean of co-optation of vital external organizations
(financial institutions, lobbies, etc.) which are controlling some of the much needed
resources and, that way, obtain the possibility to use these resources. This co-optation is
 done through the nomination of new board members coming from those external Collective
organizations having an influence on the desired resources. resources
At this point, we may make some propositions:
P1. One of the main reasons to appoint a member on the board of an organization is
the particular resources to which he (she) will open access to the organization, in
the long term.
225
P2. Her (his) ability to open access to these resources for the organization depends
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on the network she (he) has previously established.

Studying organizational networks could produce a better understanding of their nature
and, consequently, of the type of resources they can bring to the organization. For
instance, according to Burris (2005), people who are on the same boards of directors
often exhibit the same political behavior, and political affiliation, which constitutes a
resource by itself.
Dicko (2011) argued that each type of directors’ connection can bring different type of
resources to the firm: financial, commercial, political, technical resources and
legitimacy. The directors’ connections can take many forms:
• being a director in a firm (Maman, 2000; Fracassi, 2009);
• high responsibility in public administration (Maman, 2000), or sharing
directorships in one or many firms;
• high responsibility in a political organization (Maman, 2000; Fracassi, 2009);
• number of board memberships, with leadership positions or not (Lester and
Cannella, 2006; Nicholson et al., 2004);
• schools and universities attended (Kim, 2005; Fracassi, 2009; Hwang and Kim,
2009);
• affiliations with social clubs and associations (Fracassi, 2009);
• participation in political committees or commissions (Fracassi and Tate, 2012);
and
• participation in economic lobbies (Dicko and Breton, 2013b).

We may encounter all these forms and possibly others in our study depending on the
categories emerging from the data. According to Dicko and Breton (2013b), these
connections could be grouped into three main types:
(1) Economic connection: Being a director or manager in a firm or a financial
institution, lobbyists.
(2) Political connection: Being a member or leader of a party or any other political
organization, a member of parliament or a member of the public administration.
(3) Social connection: University alumnus or professorship, membership in a club or
professional association, implication in charitable institutions.

Some authors (Zajac and Westphal, 1996; Gulati and Westphal, 1999; Westphal and
Stern, 2006; Stern and Westphal, 2010) argued that the benefits and resources a firm can
derive from directors’ social networks depend on the relationship between the firm and
its directors. Some negative effects have been tied with close relationships among
 SBR organizations. For instance, some major resources may be provided to one organization
10,3 at the expense of another.
According to Faccio (2006), the value of politically connected firms (through the
political membership of their directors, officers or large shareholders) increases around
the time of announcements that officers, directors or large shareholders are entering into
politics. Goldman et al. (2009) came to the same conclusion in the US context. Faccio et al.
226 (2006) also demonstrated that politically connected firms are disproportionally more
likely to be bailed out than the non-politically connected firms, when the International
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Monetary Fund or the World Bank provides financial assistance to the firm’s home
government. Kim (2005) found that having directors who studied in a well-known school
had a positive effect on the performance of Korean firms. And finally, several authors
found positive relationship between board interlock and firms’ performance or strategic
actions (Dalziel et al., 2011; Drago et al., 2011; Ortiz-de-Mandojana et al., 2012; Pombo
and Gutiérrez, 2011), board interlock being a category of organizational networking:
P3. There are potentially positive and negative effects deriving from directors
networks.
While a firm can be privileged through such connections, another may be used in a
detrimental way:
P4. Directors’ connections can be political (parties, organizations, etc.), social
(alumni, charities, etc.) and economic (businesses, lobbies, etc.).
The presence of a quantity of a specific kind of ties depends on the projects of the firm at
the time (Dicko and Breton, 2013a, 2013b). Therefore, the configuration of these
networks will evolve through time. Dicko and Breton (2013b) provide a list of potential
needs and sources used by firms for the related resources.

Methodology
In this section, we will discuss firstly the case study approach and, then, the concept of
network and how we will apply it in an organizational context. The network analysis is
done with a program called Pajek (De Nooy et al., 2011).

A case study
This is a case study because we are studying only one firm. We may have taken the
board members as units of analysis, but we wanted to focus on the organization, as the
resources mobilized through the BD are for the organization, which is all we want to
document here. We will make the analysis for 2013, and then compare our results with
a study made in 2007 on the same firm.
From the classification of the 100 largest Canadian firm established by “Les
Affaires”, we picked the largest firm in Quebec in term of assets and also of revenues.
Through time, Power Corporation of Canada (PCC) has abandoned many of its
industrial or services involvement to specialized in financial activities, counsel,
investment, insurance and, in the limits allowed by the Canadian law, banking. The
group has also a noticeable interest in the communication sector and some other less
heavily invested sectors, like energy. The structure is centered on three main groups of
companies each owning a series of subsidiaries. Two of the three sectors are financial.
The sector under Financière Power is mainly devoted to portfolio management,
 including insurances, while the third sector contained mainly companies having, for Collective
mission, to invest money in other firms. resources

Our data
We took our data from Boardex[1]. We took the list of the board from the 2013 version of
the database, and listed all the organizations the directors of PCC were connected with.
We obtained a list of 296 organizations. These organizations have been grouped under
227
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seven categories, to which are added PCC itself and the board to add up to nine groups.
Table I shows the number of organizations in each group.

Categories of the connections between the vertices No.

Panel A
Firms in the group 38
Other companies 137
Lobbies and influential organizations 30
Social activities 42
Professional affiliations 5
Governments and public institutions 17
Universities and colleges 27
Total 296

Categories of connections between the vertices

Category n Content

Panel B
1 – The board 13 Members of the board
Ex: Pierre Beaudoin
2 – PCC 1 The mother company (only one vertex) PCC
3 – The group 38 The firms appearing in the listings from the site of the PCC
Ex: Great West Lifeco Inc
4 – Business ties 137 Other companies where the members of the board of PCC
work or are also board members
Ex: Bombardier
5 – Lobbies 30 Associations destined to influence the governments and
the society in general in the direction of the interests of the
organization
Ex: Canadian Council of Chief Executives
6 – Universities and colleges 27 Learning institutions higher than high school
Ex: McGill University
7 – Social activities 42 Cultural or charitable associations Table I.
Ex: Calgary exhibition and stampede Grouping of the 296
8 – Professional affiliations 5 Professional bodies organizations with
Ex: Association of Professional Engineers and whom the 13 board
Geoscientists of Alberta members are
9 – Governmental and 17 All public organizations in which the members were or are connected and
public institutions still involved classification of these
Ex: French Air Force connections
 SBR As expected, the larger number of connections (140) is with other enterprises mainly in
10,3 the investment sector, including the banking. Panel B provides the details. The “others”
category includes firms in a series of sector going from retailing to engineering or water
services. Most of those firms are quite important in term of sales: Seagram, Vivendi,
Provigo, G. Weston, Loblaws, among others.

228 The concept of “network”

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A network is based on the circulation of information (Borgatti et al., 2013). In the most
basic sense, a network is any collection of objects where some pairs are connected by
links (Easly and Kleinberg, 2010, p. 2). Such a system has no objective, beginning or end,
neither center nor periphery. If we follow the tenants of the “small world” hypothesis, the
world is formed of a unique network (Uzzi et al., 2007). We can consider only fragments
of the general network at one time, having for center the element interesting us that can
be termed the ego (Prell, 2012). Therefore, the first step is to choose a focal point. We
want to analyze the networks of the members of the board of PCC. As our lens is the
resource dependence theory, we want to understand how the connections of the board’s
members are prone to provide the resources the firm depends on. Therefore, the first and
constant element in our network is PCC itself. Then, PCC is at the center of our analysis,
followed immediately, at the second level, by the members of the board forming,
altogether, another focal point.
For analytical purposes, in PAJEK, a network is made of a list of elements called
vertex and of relations called edges (if the connection cannot be said to have a specific
direction). Our network has 309 vertices that are reduced to 296 (309 minus the 13
directors and PCC) for analysis purposes (Table I, Panel A). A vertex is “[…] the smallest
unit in a network” (De Nooy et al., 2011, p. 7). These vertices can be grouped into
subcategories that are called partitions. A partition of a network is a classification or
clustering of the vertices in the network such that each vertex is assigned to exactly one
class or cluster (De Nooy et al., 2011, p. 405).
The data are formatted into a matrix and the relations appear at the intersection of
two vertices in the matrix. The programs are made to analyze relations within groups.
This means that the matrix will have the same labels on the top row and in the left
column. The cells will show the relations between these people. With such a design, the
program will be able to run every routine it includes. There is another kind of matrix that
is called affiliation matrix, used to show membership or participation to some events by
a group of person, for instance. In such a matrix, the persons figuring at the top row are
not the same as the organizations or events figuring in the first column. Here, we are not
studying the connections between persons in a group, but the ties between one
organization and other organizations. Therefore, our matrix will have at the top, the
members of the board, and all the organizations they belong to will appear in the first
column, making it an affiliation matrix.
Following the list of connections provided by members of the board done previously,
we assign values to vertices to create subcategories. The distance is the number of edges
between two vertices. Our network is not directed because it is difficult to assign
direction to social connection. When one firm is provider for another, we have a
clear direction, but when two persons share the same alma mater, it is impossible to put
a direction on the relationship. The flow of advantages can go both sides.
 We expect to find strong relationships between the persons and institutions related Collective
with the members of PCC boards and the different resources a firm can expect from its resources
environment. As PCC is really a large diversified group, every kind of resources may be
useful in a short- or middle-term perspective. Table II presents a classification of the
potential resources needed by firms.

Results and analysis 229

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Our network has 482 relationships called edges or lines. The values attributed to the lines are
those described in Table I presenting the general characteristics of the network. However,
Table III reports 13 values because some were discarded in our final analysis. For instance,
the Category 3 represented the family ties, as only the three Desmarais were having such
connections. To simplify the graphs, we eliminated the category although remembering the
facts. Category 5 had been left empty for it was redundant, and Category 13, academic
groups, had been merged with the universities and colleges category.
The resulting 482 connections (lines) between 309 vertices are not all of the same
category. Table III shows the frequency of each type of relationship. With 349
occurrences, business relationships are the most frequently represented (line value 6).

Resources Description Potential sources

Financial All kind of financial support or financial Financial institutions, capital markets,
cooperation other firms
Human Employees, expertise, counseling Professional corporations, universities
Commercial Clients, suppliers, partners Markets, other firms
Political Block the unwelcome ruling, and promote Deputies, parties members,
those that are protecting the firm ex-ministers, civil servants, lobbies
Technical Information about new technologies Markets, other firms, universities
Social Common resources, legitimacy Public opinion, media, communities Table II.
Potential resources
Source: Adapted from Dicko and Breton (2013b, p. 48) necessitated by firms

Number of vertices (n): 309

Edges
Number of lines with value⫽1 1
Number of lines with value#1 481
Total number of lines 482
Number of loops 0
Number of multiple lines 56
Average degree 3.12
Lowest value of line: 1
Highest value of line: 13

Notes: The lines are the relations between the vertices; a value of 1 indicates immediate proximity,
while another number indicates a longer path; multiple lines mean that more than one path lead for one
vertex to another; the degree is the proportion of realized connections on all the possible virtual Table III.
connections in a network (if each vertex was connected to all the other ones); here, the average degree is General information
3.12, ranging among the normal social networks on the network
 SBR We can visualize those relationships through graphs. If we look first at a graph of the
10,3 entire system, we can already make some observations. Figure 1 provides the complete
graph.
We see that the vertex number 14 is at the center, which was expected, as it is PCC.
Near it, we have Desmarais Sr, the founder of the empire from a small bus company
operating in Ontario. The three Desmarais (the father and his two sons) seem to share
230 most of the central connections and to form a subgroup (clique in the language of
network analysis).
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The other members, except Jackson, are peripheral. The best example of that is
Dassault (number 3). So, at first sight, we have two phenomena that have been identified
in the literature. First, we have some remains of the family business represented by the
most important people on the board (the founder and his two sons) and then we have
people from different horizons bringing their particular contribution to the firm. Each
brings a network of different organizations, sometimes of different universes (like
Sathmary). This subgroup emerges more clearly than a few years ago (Dicko and
Breton, 2013b) probably, for a part, because the board had been reduced from 17 to 13,
which constitutes a cut of near 25 per cent.

Figure 1.
The complete
network
 Table IV provides information on the triads. This information is about how many Collective
groups of three can be found in the network. A triad is a relationship between three resources
vertices having a density of 1.0, meaning that everyone in the triad is directly connected
with the two others. Normally, such triads are used to identify the cliques in a network.
The program identified different information on the triads depending on the model used
to identify it. Our network appears as a balanced network from which it might therefore
be possible to identify some subgroups. 231
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We see that the triads are mainly in a few categories where their numbers exceed the
expectations. The Desmarais family are a good example of a triad. The father and his
two sons are related with each other, making a subgroup of a density of 1.0. The number
of triads found in our network indicates the presence of many subgroups of three with
people and institutions. This finding goes in the direction of the elite hypothesis
implying that people having reached a certain level in the society come from the same
origins, have frequented the same schools and are members of the same associations
which make them know the same people.
Table V lists the connections broken into 13 categories, for each member of the board.
Categories 6 and 7 are related to business relations and constitute the most important
group. In second, we have the lobbies.
Five members of the board are well-connected with lobbies. Isabelle Marcoux is
among them, even if her number of affiliation remains low. The Desmarais brothers are
the best connected. They are also the best connected in term of businesses, although it
can be misleading, as the companies of the group are figuring in the category. Professor
Sathmary, on the board for years, brings connections with the academic and
governmental worlds. She also sits on the board of a series of subsidiaries. So, her
business connections are not provided by herself but had been given to her by the group
most probably as a reward. Figure 2 shows the group connections and that Professor
Sathmary has a good number of those.
As expected, the founder’s family occupies the center of the network. The three
Desmarais (vertices 4, 11 and 12) are the most connected in this figure, implying that
they keep a control over the business even if it is no more a family business. The lobbies
are also illustrated in Figure 3.

Type No. of triads (Ni) Expected (Ei) (Ni - Ei)/Ei Model

3-102 112,702 1439.02 77.32 Balance

16-300 130 0.00 24719517.29 Balance
1-003 4,747,957 4581079.72 0.04 Clusterability
11-201 8,845 0.15 58700.84 Forbidden

Notes: Chi-Square: 3741633099.4492***; there are 16 categories of triads depending on their form;
this number is due to the direction the relation can have; we will not have many categories in our study,
as there is no direction for the relation; the first number on the left expresses the category; the following
three-digit number indicates the intrinsic characteristics of the triads, while the letter that can be adjunct
indicates a direction; Ni is the number of triads of this category found in our network; Ei is the number
expected at random for each category; finally, the word at the end indicates the model with which each Table IV.
result is obtained; here, we have a balanced model very highly significant Triadic census***
 SBR Members of
10,3 the board
Types of
connections 1b 2 3 4 5 6 7 8 9 10 11 12 13 Total
a
1 1 1
232 2 1 2 1 5 1 2 2 7 2 9 8 3 43
3 2 1 3
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4 2 2 3 1 1 2 1 1 3 3 1 2 3 25
5
6 2 5 37 26 25 4 3 11 12 8 24 31 10 198
7 6 17 6 1 1 1 7 6 2 2 3 2 54
8 2 2 12 1 1 5 2 7 3 6 41
9 2 1 1 1 1 6
10 1 3 1 1 6
11 4 7 2 1 4 4 22
12
13 5 5
Total 5 19 66 42 46 10 9 26 34 29 45 55 18 404c

Notes: a Types of connections: 1 – business, 2 – lobbies, 3 – family, 4 – alumni, 5 – being on the same
board, 6 – being on actual or passed board or important committees, 7 – working actually or in the past
for the organization, or being a consultant for it, 8 social implication, 9 – professional affiliations, 10 –
public institutions (gov), 11 distinctions, honors, 12 – subsidiaries or associated firms, 13 – academic
groups; b Members of the board: 1 – Pierre Beaudoin, 2 – Marcel Coutu, 3 – Laurent Dassault, 4 – Paul
Table V. Desmarais Sr, 5 – Colonel Tony Graham, 6 – J. Jackson, 7 – Isabelle Marcoux, 8 – Robert Orr, 9 – Tim
Connections by type Ryan Jr, 10 – Emoke Sathmary, 11 – André Desmarais, 12 – Paul Desmarais Jr, 13 – Robert
for each member of Gratton; c Conciliation: We considered the basic relations: 404; To which is added the multiples lines
the board (Table III): 56; Plus the relations between the subsidiaries: 22; Total (Table III): 482

The Canadian Council of Chief Executive has six members among PCC’s board, which is
almost half of it. As underlined earlier, the Desmarais are also the most connected in this
domain with five and six memberships, sharing only one. One of them is even member
of the Trilateral Commission where the key businessmen and former or even actual
politicians of the planet are meeting. However, this connection does not show the
potential relationships with key members of the commission, for instance Madeleine
Albright or Raymond Chrétien. They also have connections with the CD Howe Institute
and the Conference Board of Canada, two think-tanks providing economic advices to
the Canadian Government. Such prestigious connections bring credibility to PCC for
financing, obviously, but also to propose politics to the governments.
Some of the universities and colleges are also related with more than one member of
the board. Universities McGill and Western Ontario are the most frequently cited at this
chapter with four connections each. At McGill, we have two Desmarais, senior and
junior, and at Western, we have Emöke Sathmary, which is representing the board for
that kind of ties. This university connection might be important for the firm, as Mss
Sathmary occupies seats on five boards of the group, which may generate substantial
revenues for her.
The Desmarais family is obviously also well-connected with governmental
institutions. It appears that the network of the company is built around them, and then
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group
Figure 2.
233

Companies of the
resources
Collective
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10,3
SBR

234

lobbying
Figure 3.

organizations
Connections with
 extended through the other members of the board. However, Tim Ryan Jr (vertex 9) is Collective
also well-connected at this level. His connections are mainly with the US Government. resources
He is even connected with the US President’s office and the Army. Let us note that
Desmarais Sr (vertex 4) is connected with Carlyle, where was also the former president
Bush Sr. Carlyle sells weapons and the group Dassault also have subsidiaries doing the
same trade. Moreover, Bombardier (Beaudoin) is also involved in this industry. That is
the way large transactions are conducted. 235
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It seems that, if we exclude the businesses outside the group, because there is mainly
one member of the board connected with each one, we may say that the most important
connecting places are lobbies, universities, governmental organizations and the group
itself (the companies in the group are not owned at 100 per cent). Therefore, it is
important for them to have many representatives on these boards to establish strategies
beneficial to the group. For instance, a subsidiary has a related firm that is Suez, the
second largest firm in the water services industry. Another branch has a subsidiary
(Putnam) having significant interests in Veolia, the largest firm in this industry.
Together, these two firms control over 55 per cent of the world market for water services.
Another important feature would be the density of the network measured as the
proportion of the number of realized edges (connections) on the number of potential edges. In
our case, Table III shows a density of 3.12 per cent, which is totally in the expected range for
a social network (De Nooy et al., 2011). The density is inversely related to the number of
vertices. In a board network, a low density is expected because everyone brings his own
connections, like Dassault. The organizations to which Dassault is related are not connected
with any other member of the board or any other institutions. We may add that Dassault
comes from France, where his connections are situated. All those unrealized connections
make the low density of the network but also demonstrate the diversity of the universes
represented on the board. Moreover, if the density is high, it means that anybody can have
access to anybody. With a low density, the networking takes its importance because some
people play intermediaries. Then, the distances between vertices may take some importance.
Figure 1 illustrates the phenomenon, each member looking as a key for a series of institutions
of different categories. In such a context, the strength of the weak link (Granovetter, 1973)
becomes more evident.
It is easy to imagine that political ties might be less close than business relationships,
but they also may be used in more “difficult” situations. One of the most important
political resources is regulation (Watt and Zimmerman, 1986). The work to control
regulation is more a long-term one.
We can see that the place of each group is not the same. The academic affiliations are
then totally outside the picture. Figure 1 suggests, as previously noted, that political
groups are not very near the firm; however, the politicians and their surrounding are
quite close, which was also to be expected.

Categories of connections 2007 (%) 2013 (%)

Economic 92 54 175 59 Table VI.

Social 43 25 69 23 Structure of the
Political 35 21 51 18 board connections in
170 100 296 100 2007 and 2013
 SBR We did a similar study on PCC in 2007 (Dicko and Breton, 2013b). By comparing the
10,3 results of 2007 with 2013, it would be possible to see if the needs of the group changed
during the period. Table VI compare the two sets of data.
Our numbers for 2007 come from a series of documentary sources. We can see that
despite the board being slightly more numerous in 2007, we had a smaller number of
vertices. However, we also see that the proportions are about the same. Therefore, we
236 can suggest that the needs of the group in term of economic, political and social
connections to resources had remained mostly unchanged.
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Summary and conclusion

The first conclusion is that the system of relationships of the members of PCC’s board is
functioning as a social network, having a relatively low proportion of realized
connections. This would go in the direction of the social capital theory (Dicko and
Breton, 2013a, 2013b). This also corroborates the resource dependency theory as an
explanation for the formation of the BD, with each director bringing a particular set of
connections.
We also see that many types of connections are in use here. Our classification seems
to be justified, not only theoretically, as we first propose some categories from the
literature, but also empirically. However, the political ties would probably be the most
important through connections with politicians or political groups even if they are not
the most numerous.
The social ties seem more a long-shot investment. The presence of people related with
the firm on such or such board may have an effect that, first, will be difficult to attribute
to a specific factor and, second, that will be more diffused and indistinct. It may be
associated with the existence of an elite having these institutions as “lieux communs” in
the literal meaning of the expression.
We can also note that the board of PCC follows an old conception. First, there are few
(2 on 13) women. However, in 2007, there was only 1 on 17. Also, we have no
representation of any environmental or social groups, not to say anything about
employee representatives.
This study probably stayed at the surface of the phenomenon. Further studies will
have to go deeper in the different connections board members can entertain and also to
refine the presentation of the business connections: suppliers, clients, sources of
funding, etc.

Note
1. Boardex is an international database with a great focus on US companies. Canadian
companies included are often not analyzed with the same depth than their US counterparts.
For instance, Jacqueline Desmarais (the wife of JR) is on the a series of boards in the cultural
domain. She is on the Montreal Symphonic Orchestra’s board along a former prime minister
of Quebec, now involved with energetic firms across the country. That kind of connection has
not been studied and is not crucial for what we are trying to demonstrate here.

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Corresponding author
Saidatou Dicko can be contacted at: [email protected]

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