Water Street Insights

PIONEERED BY GENERAL ELECTRIC in the 1950s, the strategic business review (SBR) was embraced – and refined – by nearly every large company in subsequent decades. Today, using a standardized corporate process and approach to evaluate business performance and make data-driven strategic choices seems almost second nature. Yet companies have been somewhat slower to adapt their corporate SBR process and structure to the unique needs of their joint ventures, leaving one to ponder: Why the disconnect?

To state the obvious, joint ventures are unlike wholly owned businesses. As entities jointly owned by partners with different strategies and investment appetites, JVs introduce critical questions related to scope, strategy, end game, and evolution. As separate legal entities with their own Boards, joint ventures raise essential requirements related to governance, compliance, fiduciary duties, delegations, and management of conflicts of interest. And with a range of partially-obscured and often asymmetric financial flows to partners – like service and license fees, supply or purchase agreements, and shared-use assets – joint ventures throw some novel twists into understanding basic financials beyond the entity’s P&L.

AT WATER STREET, we believe that in order to succeed at joint venture governance, JV boards must focus on getting seven things “right.” In previous Insights, we have highlighted the seven specific mandates joint venture Boards can adopt to manage the unique challenges that JVs face. This insight focuses on how to start the journey towards better JV governance and on how one organization was able to successfully put into practice these seven “rights.”

AT WATER STREET, we believe that in order to succeed at joint venture governance, JV boards must focus on getting seven things “right.” As the seventh part in an eight part series, we analyze what good self-governance looks like for JV Boards (i.e., the ways a Board continuously evaluates itself as a group and as individual directors). The performance of the JV Board has a large impact on the performance of the JV itself, yet very often the Board is not as effective as it could be – even as reported by Board members themselves. This insight illustrates ways JV Boards can deliberately and consistency assess their performance to ensure the JV is properly managing risk, identifying and capturing strategic initiatives in a timely manner, and promoting alignment between the shareholders and management team.

AT WATER STREET, we believe that in order to succeed at joint venture governance, JV boards must focus on getting seven things “right.” As the sixth part in an eight part series, we turn our focus to the right information flows between the board and the JV management team. This insight illustrates the challenges associated with information flows in JVs and introduces a successful strategy to ensure alignment on key initiatives and proliferation of information.

AT WATER STREET, we believe that in order to succeed at joint venture governance, JV boards must focus on getting seven things “right.” As the fifth part in an eight part series, we will turn now to the right use of board time. This insight focuses on how board members can make the best use of their time in and out of the board room by managing their time effectively and by focusing on issues relevant to their board role.