The Joint Venture Exchange (JVX)
2009
Joint Venture Advisory Group subscribers may access copies of all JVXs in the subscriber area.
Unlocking Value from Shared Services in JVs (Dec 2009)
Topic: Financial and Commercial Arrangements
Most joint ventures used shared services from one or more parent companies. These services can help JVs get off to a quick start. But there’s a silent scream coming from a large number of JV CEOs and CFOs. More than 60% of JV management teams are dissatisfied with elements of shared service performance. In approximately half of JVs, better governance and negotiation, and more flexible terms can allow the venture to reduce shared service costs by 10%-35%.
When and How to Take a JV Public (Nov 2009)
Topic: Strategy, Scope, and Planning
IPOs of JVs can be a means for owners to monetize earlier investments; drive improved performance through a more independent, market-oriented, and less-complex operating structure; and create a “currency” to attract top talent. Despite the attractiveness of an IPO, fewer than 5% of JVs have pursued this path. While the IPO isn’t always the right approach, we think the paucity of JV IPOs represents some missed opportunities.
Winning the Intellectual Property Game in JVs (Oct 2009)
Topic: Special Topics
Most companies play a generic “defensive” IP game in their JVs – protecting IP through structural and contractual mechanisms. Some companies use a broader range of defensive tactics to elevate their game; but the real winners also adopt an “offensive” posture in trying to actively learn from their partners and optimize their value from the venture.
JV CEO Compensation (Sep 2009)
Topic: Organization and Talent
What is a joint venture CEO worth? What are JV Boards paying JV CEOs? Is there a sound basis for making these pay decisions? This issue provides some data and a basic frame for answering whether the JV CEO’s compensation is appropriately calibrated against JV-specific complexity, risks and demands.
JV Directors and Conflicts of Interest (Aug 2009)
Topic: Governance
Unlike their peers on listed-company Boards, JV Directors are almost always executive officers of a shareholder. This creates the potential for all sorts of synergies, but also spurs conflicts of interest, confusion and, at times, inefficiencies and suboptimal outcomes.
Successfully dealing with conflicts of interest in joint ventures requires business as well as legal approaches. Leading companies are looking at different governance structures and a range of practical approaches to avoid the conflicts of interest that can be such a drag on JV Board effectiveness and venture growth.
Why CalPERS Cares About JV Governance (Jul 2009)
Topic: Governance
This JVX is authored by Anne Simpson and William McGrew of the California Public Employees’ Retirement System (CalPERS). A major institutional investor and the largest pension fund in the United States, CalPERS has been at the forefront of US corporate governance reforms.
In the last decade, CalPERS established a set of governance principles for public companies at the corporate level with the underlying tenet that fully accountable corporate governance structures produce the best returns to shareowners. CalPERS believes that a similar level of scrutiny and focus should be extended to the largest joint ventures of public companies – a critical but relatively less transparent asset class.
Are Your JVs a Ticking Time Bomb? (Jun 2009)
Topic: Governance
We believe that a lack sufficient internal controls and governance processes of their joint ventures are exposing many companies to serious downside risks, and that many companies are foregoing material upside value from restructuring underperforming ventures that have been left to fester.
In this month’s JVX, two executives offer a picture of what an appropriate, well-developed control and governance system looks like, and the benefits it delivers at The Dow Chemical Company.
Secondee Policies – Time for a Relook? (May 2009)
Topic: Organization and Talent
Secondees – parent company employees loaned to the venture on a temporary basis while retaining long-term legal employment status with their parent company – are critical to many JVs. Secondees can be the only way for parent companies to quickly get JVs up and running, transfer-in key skills, and build a robust organization of trusted people. Yet, the poor handling of secondee selection, evaluation and mentoring is central to the underperformance of many JVs.
Rethinking HR Committees in JVs (Apr 2009)
Topic: Governance
Joint ventures introduce unique talent challenges – attracting the right people, shaping incentives, managing accountabilities, and integrating different cultures. This month’s JVX looks at one important piece of the talent management puzzle – the HR committee (often referred to as the Comp or Talent Committee) – and some interesting examples of JVs that are getting the “talent issue” right…and wrong.
Getting Aligned on Growth (Mar 2009)
Topic: Strategy, Scope, and Planning
Joint ventures – especially consortia, shared utilities and other shared-ownership entities with more than a few owners – find it difficult to make decisions. As one CEO put it: “It has proven extremely hard to get anywhere new. Frankly, we make the UN look like a model of decision-making efficiency...”
This JVX explores why growth strategy is so difficult in multi-owner ventures – and offers six simple strategies to ensure that your organization doesn’t experience the fate of so many: a long, slow death.
The Case for Lead Directors (Feb 2009)
Topic: Governance
“My Board members were close to throwing lamps across the room!” So said one joint venture CEO describing the severe strain that the global economic crisis was putting on the relationships within his organization.
A simple governance practice – the creation of Lead Directors – is a vital tool for maintaining shareholder alignment, driving performance improvement and enabling the nimble decision-making so essential for success in this economic environment.
JVs in a Down Market (Jan 2009)
Topic: Strategy, Scope, and Planning
Can Joint Ventures help companies through the current economic maelstrom? According to leaders of Corporate Development and Strategy, they can. This issue discusses how organizations are utilizing both new and existing Joint Ventures to raise capital, improve cash-flow, minimize risk and cut costs.