Finance: A share in every city

Want to introduce a global share plan but don't know your legal position around the world? Well, Arthur Andersen thinks it has the answer - ShareNet.
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The Independent Culture
SAY YOU are a line manager working in the Argentinian subsidiary of a US multinational. You want to know whether the company can make salary deductions to enable employees to participate in a share ownership plan. Similarly, you may be in an Australian operating company and are wondering whether you can get the company to provide financial assistance to help employees acquire shares in it.

Finding the answers to such conundrums is often a complicated and difficult task. And, with research suggesting that ever more companies are either already operating or planning to establish global share plans, the task is likely to become even more onerous.

However, the accountancy firm Arthur Andersen has devised a system that, it believes, will enable managers to cut through the complexity at the touch of a button on their personal computers.

ShareNet - which appears to be that rare combination of an Internet tool and plain English - has been developed by the firm's human capital services team with the aim of providing companies with a one-stop source of information on the tax, securities, corporate and labour laws in more than 50 countries. It is accessible 24 hours a day, seven days a week, at a cost of between pounds 200 for a single-country profile and pounds 7,000 for all 50 countries.

The team - which includes occupational psychologists, human resources strategy experts and lawyers, as well as pension experts and actuaries - sees a need for the service because its own recent survey indicates that more than a tenth of the world's top 1,250 companies intend to introduce global share plans next year. This could result in the creation of more than 1 million employee shareholders.

The same study, conducted earlier this year, revealed that companies with such plans already in place were not reaping all the potential benefits, largely through not focusing sufficiently on what they want to achieve from them. Bill Cohen, a partner in the firm's human capital services practice, says: "They need to ensure that their global share plans complement and support their business objectives."

Mr Cohen and his colleagues also found what many would regard as a disconcerting attitude towards the detail of share ownership plans - whether implementing them for senior executives or for the workforce as a whole. Their research shows that significant numbers of companies worldwide take "the risky strategy" of not taking legal and regulatory issues into account when introducing such schemes.

With the introduction of ShareNet, managers should have less excuse for adopting such an approach. "One of the major benefits ShareNet delivers is a concise view of how to localise a share plan to take advantage of country-specific tax and securities laws," Mr Cohen points out.

In particular, the system offers a quick reference guide under which countries are graded from A to D according to the ease or complexity of implementing a share plan there.

Each listing highlights answers to the most common tax and legal questions and there is also a section that outlines the tax implications of the four most common types of stock option plans - market value and discounted option plans, discounted share purchase plans and free share plans - that are offered to employees.

And, as for the answers to the questions facing the managers in Argentina and Australia? Well, that is a competitive advantage that Andersen will share in return for a subscription fee.