One of the issues that created the crony culture of big business and government is the lack of regulation over directorships or organizations.  

This has allowed one person to have multiple director positions across of range of organizations and this naturally introduces moral hazard.  

Additionally this reduces the number of high level jobs available preventing those capable, but lower down the management ladder preventing them from achieving their potential.

One should also ask what value are high paid directors when they are splitting their time between various interests.

It's often said that senior management is about networking and directors are employed for who they know but given that 'pool' of people to know is shrinking and further increases conflicts of interest. 

Smallism would therefore prefer that a director was a full time employee in one organisation only. Dedicating themselves to that position.

Some entrepreneurial might see this as an issue if they have multiple companies so to allow some flexibility it would permissible to hold multiple directorships of companies owned by a parent company for which the person is also a director.


To create greater number of higher level jobs in keeping with 3.31 When Efficiency is bad goals.

To reduce moral hazard and conflicts of interest

To increase the number of leadership positions.