Networks Matter at the Top: An Empirical Analysis of French Boardrooms

People commonly think that CEOs get appointed not only because of their talent or ability but also because of their social connections. In this paper, I use a unique database FIBEN, built at the Banque de France, of over 12000 firms and alumni directories for the three most prestigious Grandes Ecoles in France (HEC, Polytechnique and ENA) to explore this intuition. Results show that indeed, alumni tend to favor their peers in the voting process but also that there is rivalry between the three Ecoles. This last finding is original and supports the idea of a network effect. Indeed, if only the ability of alumni explained their success in elections to become CEOs, we would not observe rivalry.