A U.S. U.K. director's report.

• Author: Courtney, Eugene W.

The cross-fertilization of ideas and practices that comes with our headlong rush into a global market necessarily brings with it an increasing homogeneity of corporate management and governance. With the information age, we have increased access to instant, inexpensive, and detailed knowledge of each others' business problems and their resolution - and as we face similar challenges and problems, we tend to build on our knowledge of what others are doing and what worked elsewhere. This is most apparent, of course, where nations have had close ongoing business ties or shared cultures, as in the case of the United States and the United Kingdom.

I have served a number of roles involving foreign operations of U.S.based companies over the past 20-plus years - from dealing indirectly with scores of overseas distributors and representatives to that of managing director of a foreign subsidiary. Although exposed to a variety of overseas operations in these capacities, I have seen a slightly different point of view recently as a nonexecutive director on the board of a U.K.based PLC, DRS Data & Research Services. As a result of those experiences, plus my exposure as a manager and board member of several U.S. corporations, I have enjoyed the opportunity to observe an evolution of the business and governance environments in both countries.

Comparisons

Aside from the obvious variances in nomenclature and semantics, and the differences imposed by the regulatory agencies that guide or impinge upon corporate behavior, I've observed many more similarities than contrasts when it comes to the grass roots of corporate operations and governance in the U.K. vs. our U.S. counterparts.

In my opinion, the outstanding difference comes as a result of the greater significance of litigation, particularly shareholder actions, in the U.S. business environment - much greater here than in the U.K, or elsewhere in the world, for that matter. Further, as one outgrowth of our prevailing concerns related to litigation, publicly held U.S. firms have experienced an increasing requirement for professional services such as those of our public accounting firms - to expand the extent or scope of their services on the basis that this enhances the quality of information reported to the shareholding public.

The recent spate of publicly exposed abuses of insider information and other corporate offenses at the expense of the shareholder led to increased visibility and concerns in the U.S...