A proxy board is a requirement imposed by the U.S. Department of Defense's Defense Security Service on foreign investors seeking to acquire certain American companies. This is for national security reasons and applies mainly to defense contractors which are involved in highly classified contracts.
A proxy board is a board composed entirely of American citizens which are responsible for the day-to-day running of the business. In this way the company's classified information is "insulated" from foreign exploitation but the parent company still benefits from any profits made by its subsidiary.
Read more about Proxy Board: Special Security Agreement, Examples of Proxy Boards
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“Watteau is no less an artist for having painted a fascia board while Sainsbury’s is no less effective a business for producing advertisements which entertain and educate instead of condescending and exploiting.”
—Stephen Bayley (b. 1951)