Who’s in Charge? Decision-Making in 50:50 Joint Ventures

WHEN COMPANIES DECIDE to pursue a joint venture (JV), a critical first step is determining the appropriate level of ownership and control. Given a choice, most companies would prefer to be the majority partner, believing such a structure provides greater control and decision-making efficiency. Being a minority ...

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JV CEO Roundtable Insights: This Year, it’s Virtual

THE PAST YEAR was different in more ways than one. While we would normally host ~15 joint venture CEOs in Washington, D.C. to network and discuss top-of-mind issues with peers, in 2020 we gathered virtually for our 11th annual session, with 40 JV CEOs joining from around the world. These CEOs represented ...

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Designing More Durable JV Agreements: Injecting Elasticity into Exclusivity and Non-Competition Clauses

WHEN HONEYWELL restructured its highly-successful joint venture in Japan with Yamatake in 1990, the dealmakers included vaguely-defined scope and exclusivity terms – a decision that ultimately contributed to the end of the 40-year partnership. These terms allowed both Honeywell and the JV to compete in “Other ...

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Governing a Portfolio of Joint Ventures: How Do You Measure Up?

A DECADE AGO, we established a set of objective tests to allow companies to calibrate how well they are governing their portfolios of joint ventures. At the time, many companies were waking up to the materiality, risks, and untapped performance potential of their joint ventures, especially those that the ...

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Fixing Flawed Environmental Clauses in Joint Venture Legal Agreements

COMPANIES IN THE OIL AND GAS, chemicals, and mining sectors are among those with the highest environmental, social, and governance (ESG) risk profile2. Concern about this risk profile is growing significantly among investors, who no longer appear willing to accept certain behaviors as the cost of doing ...

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Joint Venture Governance Index: Calibrating Joint Venture Governance Strength

TWELEVE YEARS AGO, we co-authored with CalPERS a set of guidelines for joint venture governance.1 At the time we argued, and still believe, that good governance in joint ventures strongly correlates with sustained financial performance, sound management of risks, and the ability of JVs to adapt to the changing ...

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Running for the Exits: Getting Joint Venture Exit Right

JOINT VENTURE (JV) EXIT is a key issue for dealmakers and corporate executives whose portfolios contain material JVs spanning the globe.One way or another, companies eventually exit their JV investments – sometimes sooner than expected. Recent analysis of JV lifespan data shows that newer vintages of JVs are ...

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Shareholder Representatives in JVs: Legal Proxy, Accountable Executive, or Muddying Interloper?

IN CERTAIN INSTANCES, a company will appoint an individual to serve as its “Shareholder Representative” to a joint venture. The basic premise is that the Shareholder Representative is expected to act as the company’s agent with regard to the venture – a role that is empowered but not necessarily limited to ...

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Innovation in Joint Ventures: Do or Die?

IN INDUSTRIES LIKE HIGH-TECH, telecommunications, and healthcare, innovation is critical to sustained competitiveness and performance. Joint ventures operating in these fast-moving markets often must compete with innovation machines like IBM, and with PE-backed startups. In our experience, the ownership ...

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Water Street Partners advises clients on transactions and governance. Our transaction work specializes in joint ventures and other non-M&A partnerships, both in new deal formation and restructuring. On governance, we advise clients on corporate and joint venture governance, working with corporate and joint venture boards, management teams, and individual shareholders. We support clients around the world and across industries. 

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JV Directors - Duty of Loyalty
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