Page 88 - Five Forces of Americanisation Richard Hooke 04072025 final post SDR1

The UK Defence Industry in the 21 Century
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The Five Forces of Americanisation

foundation for managing the national DIB, forestalling any need for the Competition &
Markets Authority (CMA) or the Cabinet Office Security Investigation Unit (“SIU”) to intervene.

Case Study 1 in this paper demonstrates how symptoms of potential failure can be identified
at an early stage, providing time for preventative, corrective or remedial action to be taken.
The UK government has plenty of leverage with company leaders – both chairmen and chief
executives - not least as a major customer, to take action or at least to voice concerns and
communicate an expectation of action and continuing dialogue.

ii. Maintaining routine, informal and informed UK leadership dialogue at Cabinet and UK listed
company Chair and Chief Executive level
The DSIS promoted the use of a number of formal interactions between industry and
government to improve transparency and increase communication – the Security & Resilience
Growth Partnership, Defence Suppliers Forum (to be replaced by the Defence Industrial Joint
Council (“DIJC”) in 2025), Defence Growth Partnership. This may seem helpful but, unless
informed by discussions on policy at leadership level, addressing the principles, priorities and
concerns preoccupying both industry and government would be elusive or considered risky
by either side. They are also naturally be constrained by the presence of foreign company
executives and the number of representatives in attendance. It is notable that attendance at
the Defence Suppliers Forum, whilst consistently led by the Secretary of State for Defence and
the Chief Executive of BAE Systems, fell significantly in terms of seniority and number
between. 2020 and 2023 (“Defence Suppliers Forum”’ Ministry of Defence). Its proposed
replacement by the DIJC was announced on 2 December, 2024.
nd
Many countries, including the USA, Sweden, Israel, France and Finland, create such an
environment (in neutral, informal locations from saunas to country clubs) for routine
exchanges between domestic contractors’ Chairmen and/or Chief Executives and Defence
Secretary, often in the presence of another Cabinet-level senior minister and regularly with
the attendance of the President or Prime Minister. The meetings are between peers, signalling
importance, authority and an intention to take action. At Cabinet Minister and UK public
company chair level, an informal communication and consultation regime would be a major
contributor to sustaining, developing and positioning the DIB: particularly on policy,
governance, investment, market intelligence and market conditions. In 2025, there is the
potential for a very full agenda:
▪ Governance and performance
 role of government as a shareholder
 potential role as prime contractor
 preserving national security and/or competitiveness, eg: the use of proxy boards
and/or special security agreements for foreign firms operating in the UK
 concerns and issues: eg: rationale, benefits and risks associated with defence company
Chief Executives holding second/third jobs
 shareholder register profile: notable changes, additions, sellers

▪ Financing growth and developing corporate value
 alternatives for investment in delivering shareholder value compared with share
buybacks*
 the availability of UK debt
 compliance role of the London Stock Exchange and its continuing attraction to
investors in defence
 the growth of US private investment funds and other arbitrageurs, including the
implications of the UK Chancellor’s consultation on loosening the private asset

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