Joint Venture Board Attendance: Two’s Company, Thirty’s a Crowd

By Joshua Kwicinski | Tuesday, September 25, 2018

JV BOARD1 MEETINGS are the beating heart of joint venture governance. A mélange of disparate JV owner and, management wants and needs are cast into a quarterly session that shapes the future direction of the business. Structured well, a board meeting promotes candor among Directors, enables discussions on challenging strategic issues, and allows for collective decision-making in a timely fashion.

Now imagine walking into the Board meeting and seeing not only your fellow JV Directors and the JV CEO, but also the rest of the JV management team plus a dozen other faces from across the owner organization. What was expected to be an intimate session to tackle sensitive topics suddenly takes on a very different atmosphere. Candor is replaced by caution, real discussions are hard to hold, and conversations veer from strategic to tactical as the additional shareholder participants pepper JV Management with comments and questions to resolve their own issues. Decision-making and good governance suffer accordingly.

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Small Joint Venture Portfolios, Big Consequences

By James Bamford | Tuesday, September 18, 2018

HUNDREDS OF companies across scores of countries have formed three or more new joint ventures in the last decade (Exhibit 1).  The JV portfolios of some of these companies like ExxonMobil, DowDupont, and Vodafone – are enormous, representing a material portion of the company’s assets, revenue, or income. But in other companies such as Renault, Alcatel-Lucent, and Amyris, the portfolios are much smaller, often containing no more than 3 to 15 JVs. Not only are these portfolios small, but they are often a motley lot – with individual ventures scattered around the world, scoped and structured in very different ways, and governed on a one-off basis by local business unit leaders (Exhibit 2).

How should such a company think about small JV portfolio governance? 

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Linking Individual Incentives to Annual Influence Plans in Non-Operated Assets

By James Bamford | Tuesday, December 6, 2016

IN NON-OPERATED ASSETS, many companies are shifting from a generalist and assurance-oriented oversight posture to a strategy built around sharp-edged annual influence plans with specific key focus areas (KFAs).

Given this more active position in non-operated assets, especially among major oil and gas, mining, and power companies, we wanted to understand how leading companies are linking these influencing plans – and the KFAs within them – to the annual objectives, performance reviews, and incentives of individual members of the asset team. 

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How to Make a Joint Venture Succeed: Conducting a JV Pre-Mortem

By James Bamford | Monday, February 29, 2016

JOINT VENTURES have a bad reputation. While we believe that the drawbacks of joint ventures are sometimes over-stated, especially among companies that have limited experience with them, JVs remain a transaction structure that too often leads to underperformance, inefficiency, and failure. As one public company CEO once told me: “I’m certain that JVs were created by the Marquis de Sade as a special type of torture reserved for corporate executives.”

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