12-10-2025
High-powered boardrooms are often seen as the command centers of corporate innovation, where visionaries and industry veterans plot strategies that shape markets. Yet, behind the closed doors of these meetings, there are quiet but potent forces at work — connections that extend across companies, forging unseen networks with the power to grant or deny access to the next big breakthrough. In today’s hyper-competitive landscape, the choices made around those tables don’t just chart the course for individual firms — they can ripple out, altering who gets to build on tomorrow’s transformative technologies and who is left standing on the sidelines.
Corporate governance is routinely associated with checks, balances and ethical practices. But as companies lean ever more heavily on technological innovation as their lifeblood, the structure of corporate boards has taken on a new — and at times controversial — significance. A recent study by Daniels School accounting professors Hojun Seo and Jun Oh, “Interlocking Directors and Technology Foreclosure of Peer Firms: Evidence from Licensing Agreements,” explores this shadowy terrain. It reveals how the same interlocking directorates that allow boards to tap into strategic wisdom can also quietly redraw the boundaries of opportunity and exclusion in the tech economy.
The paper analyzes more than 1,600 technology licensing deals filed with the U.S. Securities and Exchange Commission (SEC) between 1996 and 2024. Using meticulously compiled data, the authors find that companies with shared board members (interlocking directors) are much more likely to enter into licensing agreements than those without such ties. When these agreements are made, the ripple effect is both profound and troubling: Competitors that aren’t part of the network not only lose access to key innovations, they also see measurable declines in the value of their own patents, relying more on incremental progress rather than the cutting edge.
The term “technology foreclosure” coined in the study encapsulates a worrying phenomenon. After an interlock-driven licensing deal, peer firms — particularly those that once relied on the same technology — become sidelined. The decline in their patent values (about 6.6% on average) isn’t fleeting; it signals a longer-term innovation gap. Compounding the problem, these outsiders begin to cite licensor patents less and less, instead turning inward to recycle their previous innovations, and lose ground in terms of growth and market value.
Not all licensing is created equal. Deals struck within these interlocked boards tend to have distinctive, exclusionary features: longer terms, lower royalties, and, crucially, exclusivity and no-sublicensing clauses. These are not accidental but strategic, effectively barricading valuable digital pathways for those not in the know. It’s a sophisticated form of competitive advantage, but one with far-reaching negative consequences for the broader innovation ecosystem.
For innovation executives and business leaders, this research is a clarion call. Those with access to interlocked networks should carefully weigh the responsibilities and risks. Exclusive deals may offer an edge, but they can also attract regulatory scrutiny or foster resentment. Leaders outside these networks have little choice but to double down on alternative R&D sources, forging new partnerships and proactively monitoring director ties that could affect future access to innovation.
Key steps include:
For regulators and policymakers, the findings are equally urgent. The current antitrust lens is optimized for horizontal deals — agreements between direct competitors. The vertical influence of interlocked directors, operating across industry tiers but still producing exclusionary effects, demands updated tools and scrutiny. The Federal Trade Commission’s recent policy language signals this change, but much work remains. Transparency, disclosure of board ties and a revisiting of exclusivity rules in technology contracts are high on the agenda if markets are to remain competitive and open.
At a time when intangible assets define both corporate strategy and national competitiveness, who sits in the boardroom — and who their colleagues are — has never mattered more. Seo and Oh’s research shines a necessary spotlight on these hidden networks, providing roadmaps for leaders, policymakers and anyone invested in a fair and dynamic innovation ecosystem. The next technological leap forward may well depend on how these relationships are managed, regulated and reimagined for the public good.
