The Joint Venture Exchange (JVX)
2010
Joint Venture Advisory Group subscribers may access copies of all JVXs in the subscriber area.
Guiding Principles for Your JV (Jun 2010)
Topic: Governance
When a joint venture is formed, the strategy, scope, governance, and underlying deal logic can feel overwhelmingly clear. But fast forward a few months or years, and partner differences are likely to emerge. Any tool that helps manage shareholder alignment, and do so in an efficient way, is extraordinarily valuable. The purpose of this JVX is to outline one such tool: Board-endorsed Guiding Principles.
Structuring JVs (May 2010)
Topic: Strategy, Scope, and Planning
The great advantage of joint ventures - the freedom to combine capabilities of two or more players in creative ways - also makes many inherently challenging to structure. The flexibility afforded by joint ventures requires deal makers to make design choices on multiple dimensions. This issue of The Joint Venture Exchange offers a five-part checklist that can be used to structure non-traditional JVs and to pressure-test new deal concepts. We also offer some advice on how to ensure that the JV negotiation process leads to either a "quick no" or a "good yes."
The Essential Role of a JV Review (Apr 2010)
Topic: Governance
We recently analyzed the shareholder review processes in three dozen large, 50-50 style joint ventures, and discovered a paradox. On the one hand, most joint ventures are subjected to quite rigorous financial and operational scrutiny. But shareholders aren't looking at what's likely to be the biggest risk, source of value, and driver of personal frustration – fewer than 25% of JVs conduct any kind of Joint Venture Review that systematically looks at how the shareholders and management team are doing as a group.
Shaping Strategy In JVs (Mar 2010)
Topic: Strategy, Scope, and Planning
Joint ventures are often scoped as fairly narrowly - initially formed to operate within the confines of a specific product market. However, after three to five years, most JVs start to see new opportunities. While the ability to respond to such opportunities is critical, most JVs are not well-prepared to develop these opportunities or evolve their strategy - a fact that can become painfully obvious to the JV CEO as rivals adapt more quickly to threats and opportunities.
How Do You Rate as a JV Director? (Feb 2010)
Topic: Governance
We think that an annual self-assessment - or a confidential 360-degree assessment among Directors - should be a regular feature of JV governance systems. Fewer than 10% of JV Boards use any form of director assessment; and of those that do, almost all deploy tools designed for corporate boards - and thus miss the heart of the unique responsibilities and issues of a JV Director.
Delegations of Authority – Rethinking the Definition of JV CEO Power (Jan 2010)
Topic: Governance
When JV Board and CEO powers are not defined beyond traditional statutory powers, a perfectly good joint venture can start to unravel. The costs can be very real: JV CEOs quit over this issue; capital investments and new product launches get delayed; synergies between partners never materialize; and, when the delegations are too broad, parent companies are exposed to new and unnecessary risks and liabilities.
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