A proxy board is a board of directors composed exclusively of U.S. citizens responsible for the day-to-day running of the company. In this way, the company`s classified information is “isolated” from foreign operations, but the parent company continues to benefit from possible profits from its subsidiary. A proxy advice is a requirement imposed as part of a proxy agreement by the U.S. Department of Defense`s Defense Security Service for foreign investors who wish to acquire certain U.S. companies. This is for national security reasons and is especially the case for defence companies that participate in top secret contracts. The proxy agreement exists between the foreign company, the U.S. subsidiary that holds classified contracts, and the DSS. A variant is a Special Security Agreement (SSA) in which the company`s board of directors may be composed of both U.S.
citizens and nationals of the parent company`s country. In this case, when national security issues are discussed, only U.S. leaders can participate. THE SSA requires that businesses be run by U.S. law and by U.S. citizens.  In May 2006, the CEO of BAE Systems described the “firewalled” status of BAE, a U.S. subsidiary, BAE Systems Inc., “British executives, including myself, see the financial results; but many areas of technology, products and programs are not visible to us….
The SSA allows us to act as a U.S. company in the United States and provide the highest level of security and integrity in some of the most sensitive areas of national security. » .