This study examines the impact of board independence on the diffusion of strategic practices through board interlocks. Relaxing the assumption that boards and executives are always tightly coupled, we argue that inside directors are crucial for the enactment of information acquired from interlocked firms. The absence of inside directors weakens collaborative ties between a firm’s board and its top management, manifesting in reduced likelihood of learning from board interlocks. Additionally, we posit that the lack of inside directors shifts a firm’s attention to alternative social referents, such as aspirational peers. Using a sample of firms in the U.S. information technology sector from 1997 to 2020, we find that the influence of outside directors exposed to corporate venture capital (CVC) practices on the focal firm’s adoption of CVC is stronger with multiple inside directors and weaker with fewer inside directors. Furthermore, the absence of inside directors enhances the impact of CVC adoptions by aspirational industry peers on a firm’s adoption likelihood. Our findings highlight board independence as a critical factor in interorganizational diffusion and the importance of corporate elite networks and within-industry benchmarking.
