Every public company that is traded on a public exchange, is required to have a Board of Directors as part of its corporate structure, and this board, typically consists of at least some members that are not insiders to the corporation, of which the Chief Executive Officer (CEO) and the Chief Financial Officer (CFO) would most definitely be insiders; but these other directors, would consist of people that are retired or employed outside of the corporation, specifically selected for their experience, connections, and wisdom.
How much power a given board has, almost always depends upon the board membership, as well as how interested those that are inside employees of the corporation, care to be influence by or contributed to by outside directors. Quite obviously, it is in any corporation's best interests, to have a board of directors that consists of members that are able to contribute in a positive way to the profitability and growth of that company.
When it comes to interlocking directorates, this essentially means that a member of the board of directors at one company, is also a member of a board of directors at another company, and may still be a member of a board of directors at yet another company. Not too surprisingly, there are laws that preclude anybody being on the board of directors at one company that competes in the same sort of industry with another company, for reasons of collusion, trade secrets, and trade negotiations, amongst other things.
Of course, as in most things in America, there are laws, and then there are the actual impact and implementation of such laws, in which, the largest corporations in the world, have loads and loads of money, and the very best lawyers and lobbyists that money can possibly buy; signifying that when it comes to certain laws that are on the books, there are going to be, at a minimum, a lot of shades of gray, as to the interpretation of such, because money buys an incredible amount of influence.
For instance, it is estimated that the market capitalization of America for the public stocks so traded, is somewhere around the astonishing and gargantuan amount of $30 trillion. That amount of money, is going to, in and of itself, attract people that will go to great lengths to benefit themselves from it. The thing about any board of directors, is that the discussions being held, whether formally within a board of director meeting, or via email or phone, is for all practical purposes, going to be information that is actionable and comes directly from those that are the highest up on the inside. Those then, on the inside of a multiple of directorates, have, in effect, real actionable information, that is of value, and can be of extremely high value, multiplied by the amount of directorships that they are on, that can thereby be traded or exchanged in a manner in which such information, benefits those parties so exchanging, giving those parties the opportunity to subsequently equity trade on accurate actionable inside information or to receive compensation for such, for their own benefit, without it appearing to be a violation of insider knowledge.
In short, members of a given board of directors, typically have access to inside information, and the more directorates that any director is part of, the more inside information that they know, so that, truth be told, information has a price attached to it as well as an inherent trading advantage, and some thereby make sure to utilize this to their inestimable favor.