Upload
sandra-shepherd
View
213
Download
0
Tags:
Embed Size (px)
Citation preview
CL@CAMEIRA LEGAL1
Governance Structures:The Heart of Joint Ventures and Alliance Arrangements
UIA - 2014 Florence Congress
Joint SessionMergers and Acquisitions Commission and Corporate Law Commission
November 2014
CL@ CAMEIRA LEGAL2014
Maria Antónia Cameira
CL@CAMEIRA LEGAL
• Tailored according to decision making structures.
• Depending on equity ownership, size of the project and industry.
• Substantially different from wholly owned companies
Governance Structures as Management Challenges
2
CL@CAMEIRA LEGAL
• Integration of different business cultures, personalities and languages
• Supervision of the investment
• Choice the right SPV vs. Options available in establishing the governance and management structure of the venture.
3
CL@CAMEIRA LEGAL
Role and key responsibilities of the alliance governing body:
• Composition and procedures• Decision making authority
Control:
• Who controls direction and management?• How is control shared?
Composition of the Board:
• Appointment• Numbers• Independents• Executives
Key issues in structuring governance
4
CL@CAMEIRA LEGAL
• Governance matters reserved to parents
• Operational management
• Minority protection
• Deadlock and dispute resolution
5
CL@CAMEIRA LEGAL
Contractual alliances
The role of a management or steering committee: binding powers.
• Management• Supervision• Rights of appointment• Supervisory or coordinating role• Alternates• Chairman• Quorum• Frequency of meetings
Governance structuresEquity Joint Ventures Vs Contractual Alliances
6
CL@CAMEIRA LEGAL
Available management models:
• Transplant model
• Dominant parent
• Independent roles with separate blocks of responsibility
• Shared management
Governance of Equity Joint Ventures
Management models V Balance of control
7
CL@CAMEIRA LEGAL
Control at board level
Following ownership of shares, where: • Right to appoint a number of directors proportionate to the its
equity shareholding. The case for equal voting rights and control rights with different economic rights, where: • Encouraging consensus, cooperation and shared
management responsibilities becomes paramount.
Balance of controlDirectors V Shareholders
8
CL@CAMEIRA LEGAL
Non voting rights with enhanced economic rights;
Different classes of shares with different voting rights.
Control at shareholder level
9
CL@CAMEIRA LEGAL
Equal proportions of Equity
Mechanisms to break deadlocks: • Different equity contributions: Greater equity greater control.
• Rights to appoint majority of Directors
• Rights to appoint Chairman with casting vote
• Weighted casting votes in certain matters
Composition of the board of directors
10
CL@CAMEIRA LEGAL
At board level:
• Board representation and rights of veto
• Rights of nomination of at least one third of the board attached to certain shares
• Special rights of nomination of one shareholder
• Arrangements in shareholders agreements to support certain nominations
The rights of minoritiesOptions and protection devices
11
CL@CAMEIRA LEGAL
QuorumsDecisions with greater majorities
At shareholder level
12
CL@CAMEIRA LEGAL
• Unitary Board• Two tiers• Operational structures• Appointment of executives as a point of stress• Functional responsibilities
• Alternates• Independents
• CEO election and delegation of powers : a Portuguese perspective
Board structuresElections, destitutions and powers
13
CL@CAMEIRA LEGAL
Elections, destitutions and powers
• Balance power tools• Roles and responsibilities
The Secretary
The Vice- chairman as the co-chairman with a rotating role.
Chairman and Vice Chairman as deadlock breakers
14
CL@CAMEIRA LEGAL
• Matters withdrawn from the power or authority of the board
• Small Joint Ventures V Large Joint Ventures
• Settling the list of reserved matters V Autonomy and efficiency of the board.
• Decisions relating to business operations : share structure and long term investments
Reserved powers : General Meetings
15
CL@CAMEIRA LEGAL
A crucial factor to the success of the Joint Venture and to the relationship between the parties.
Duties and responsibilities of directors as a means to an end.
Avoiding deterioration of relations, inter-party claims and breach of inter-party duties.
Aims of effective governance
16
CL@CAMEIRA LEGAL
A recipe for the success of a JV at management level:
• Relationship management plan to capture operating structure
• Clearly defined operational roles and responsibilities
• Benchmarking of the approach to collaborative working and successful partnering
Management skills in Joint Ventures
17
Questions?
18
CL@CAMEIRA LEGALhttp://www.cameiralegal.com
19
Berkeley Square HouseBerkeley SquareMayfairLondon W1J 6BD
Tel.: +44 (0)20 7887 6020Fax.: +44 (0)20 7887 6001
Avenida Eng. Duarte Pacheco, Torre 1, 6º Piso1070-101 Lisboa
Tel. +351 21 342 1086 +351 21 389 4230Fax. +351 21 386 0762
Avenida Paulista, 1079, 15º01311-200 São Paulo – SP
Tel.: + 55 11 3145 6000Fax.: + 55 11 3145 6050www.aidarsbz.com