Four key complicating factors can arise when negotiating alliances:
1) Differences in company size can lead to the smaller company feeling neglected or unable to keep up, while the larger company risks key staff from the smaller company leaving.
2) Having more than two parties introduces challenges of some feeling decisions disadvantage them.
3) Small companies may lack experience with formal contracts and partnerships.
4) Public-private partnerships can be difficult due to perceived differences between public and private sectors, but collaborating on parallel objectives can help.
Revitalizing Rule 14a-8's ordinary business exclusion for shareholder proposalsStephen Bainbridge
Who decides what products a company should sell, what prices it should charge, and so on? Is it the board of directors, the top management team, or the shareholders? In large corporations, of course, the answer is the top management team operating under the supervision of the board. As for the shareholders, they traditionally have had no role in these sort of operational decisions. In recent years, however, shareholders have increasingly used SEC Exchange Act Rule 14a-8 (the so-called shareholder proposal rule), to not just manage but even micromanage corporate decisions.
The rule permits a qualifying shareholder of a public corporation registered with the SEC to force the company to include a resolution and supporting statement in the company’s proxy materials for its annual meeting. In theory, Rule 14a-8 contains limits on shareholder micro-management. The rule permits management to exclude proposals on a number of both technical and substantive bases, of which the exclusion in Rule 14a-8(i)(7) of proposals relating to ordinary business operations is the most pertinent for present purposes. Rule 14a-8(i)(7) is intended to permit exclusion of a proposal that “seeks to ‘micro-manage’ the company by probing too deeply into matters of a complex nature upon which shareholders, as a group, would not be in a position to make an informed judgment.”
Unfortunately, court decisions have largely eviscerated the ordinary business operations exclusion. Corporate decisions involving “matters which have significant policy, economic or other implications inherent in them” may not be excluded as ordinary business matters, for example, which creates a gap through which countless proposals have made it onto corporate proxy statements.
This deck presents an introduction and overview of the so-called Benefit Corporation (a.k.a. the Public Benefit Corporation). It contrasts benefit corporations to related entities such as B Corps, flexible purpose corporations, non-profit corporations, and traditional business corporations.
The Global Social Impact Investment Steering Group (GSG) was established in August 2015 as the successor to the Social Impact Investment Taskforce, established by G8. The GSG is continuing the work of the Taskforce in catalysing a global social impact investment market across a wider membership. Its members include 13 countries plus the EU, as well as active observers from government and from leading network organisations supportive of impact investment.
Across the world, attitudes are changing. Old certainties about tightly defined roles for government, civil society and business are dissolving. Social sector organisations are becoming more business-like, and business is looking ever more to delivering sustainable value.
Michael Taft, SIPTU, A new enterprise model: The long march through the market economy presented at the 6th Annual NERI Labour Market Conference in association with the Whitaker Institute, NUI Galway, 22nd May, 2018.
Recently, shareholder groups have sued companies for inadequate disclosure in the annual proxy. They allege that companies provide insufficient disclosure to determine how to vote on “say on pay.” If a company follows SEC guidelines, why is this not sufficient?
Information & Insights For Entrepreneurs and EmployeesBoyarMiller
Starting, growing or selling a business is exhilarating. The city of Houston possesses a powerful support network for business owners, but there is much to consider with any new business or growth strategy.
As entrepreneurs ourselves, BoyarMiller understands the pressures entrepreneurs and executives face, and we are passionate about helping them resolve challenges and pursue new opportunities.
Working in partnership with businesses is an increasingly central strategic priority for many NGOs. Yet for every successful high profile partnership, there are many others that do not even get off the ground, or fail to deliver real value despite plenty of work on both sides. In this short Insights report, CoCreate Senior Consultant Andy Caldwell explores some of the emerging trends in NGO-Business Partnerships, specifically providing five key insights for NGOs and other organisations looking to partner with businesses.
To learn more about our work in the area of Corporate-NGO partnerships, check out our Corporate Partnership Essentials Webinar Training Course: http://www.cocreateconsultancy.com/events/webinar-training-course-corporate-partnership-essentials
From the point of choosing the appropriate business structure to the scope and extent of necessary contracts, there are numerous legal issues to address when starting a company. While certain legal issues may even bring a start-up to a grinding halt if neglected, there are many others that are possible to be handled with ease, provided you have the right information to make timely decisions. Given their importance across sectors, the following issues and details will be covered in “Legal For Startups”.
• Legal Aspects for Starting Up:
• Contractual safeguards:
• Employees and workplace regulations:
• Data Protection
ICC ethics and compliance training handbook chapter 13 resisting solicitationiohann Le Frapper
I have contributed to the chapter on the topic of solicitation and how to resist solicitation of the ICC Ethics and Compliance Training Handbook released on December 9th by the International Chamber of Commerce. It can be purchased on-line at http://iccbooks.com/Product/ProductInfo.aspx?id=698
Authored by: James R. Copland, David F. Larcker, and Brian Tayan Stanford Closer Look Series, May 30, 2018
Proxy advisory firms have significant influence over the voting decisions of institutional investors and the governance choices of publicly traded companies. However, it is not clear that the recommendations of these firms are correct and generally lead to better outcomes for companies and their shareholders. This Closer Look provides a comprehensive review of the proxy advisory industry and the influence of these firms on voting behavior, corporate choices, and outcomes, and it outlines potential reforms for the industry.
We ask:
• How accurate are the voting recommendations of proxy advisory firms?
• How influential are they over voting practices and corporate choices?
• Should steps be taken to reduce their influence or improve the reliability of their recommendations?
• Would greater transparency, back-testing, and regulation improve the market for their services?
Shareholder activism is exploding: The number of activists is increasing, their assets under management are growing, and their tactics and strategies are changing. We believe that companies that put themselves in an activist’s shoes will be most able to anticipate, prepare for, and respond to an activist campaign. So what should they know—and do?
Find out in PwC’s report, Shareholder activism: The who, what, when, & how.
Co-Operation and Competition: Antitrust Pitfalls in R&D Alliances and Other S...iohann Le Frapper
Practical tips for in-house counsel on the assessment and management of key risks, ie. antitrust and intellectual property associated with strategic partnership opportunities (printed in International In-house Counsel Journal-Issue of April 2012)
Deryck Palmer on What's Next for the Energy Sector
Christopher Garcia on Cyber Threats
Crowdfunding: How Communications Will Provide the Keys to Capital
JOBS Act: Hedge Fund Communications Options Poised to Expand
Paul Winum on CEO Succession
Karen Lisko on Juror Evolutions
NACD BoardVision on the Future of Directorship
Blogs Worth Following
Revitalizing Rule 14a-8's ordinary business exclusion for shareholder proposalsStephen Bainbridge
Who decides what products a company should sell, what prices it should charge, and so on? Is it the board of directors, the top management team, or the shareholders? In large corporations, of course, the answer is the top management team operating under the supervision of the board. As for the shareholders, they traditionally have had no role in these sort of operational decisions. In recent years, however, shareholders have increasingly used SEC Exchange Act Rule 14a-8 (the so-called shareholder proposal rule), to not just manage but even micromanage corporate decisions.
The rule permits a qualifying shareholder of a public corporation registered with the SEC to force the company to include a resolution and supporting statement in the company’s proxy materials for its annual meeting. In theory, Rule 14a-8 contains limits on shareholder micro-management. The rule permits management to exclude proposals on a number of both technical and substantive bases, of which the exclusion in Rule 14a-8(i)(7) of proposals relating to ordinary business operations is the most pertinent for present purposes. Rule 14a-8(i)(7) is intended to permit exclusion of a proposal that “seeks to ‘micro-manage’ the company by probing too deeply into matters of a complex nature upon which shareholders, as a group, would not be in a position to make an informed judgment.”
Unfortunately, court decisions have largely eviscerated the ordinary business operations exclusion. Corporate decisions involving “matters which have significant policy, economic or other implications inherent in them” may not be excluded as ordinary business matters, for example, which creates a gap through which countless proposals have made it onto corporate proxy statements.
This deck presents an introduction and overview of the so-called Benefit Corporation (a.k.a. the Public Benefit Corporation). It contrasts benefit corporations to related entities such as B Corps, flexible purpose corporations, non-profit corporations, and traditional business corporations.
The Global Social Impact Investment Steering Group (GSG) was established in August 2015 as the successor to the Social Impact Investment Taskforce, established by G8. The GSG is continuing the work of the Taskforce in catalysing a global social impact investment market across a wider membership. Its members include 13 countries plus the EU, as well as active observers from government and from leading network organisations supportive of impact investment.
Across the world, attitudes are changing. Old certainties about tightly defined roles for government, civil society and business are dissolving. Social sector organisations are becoming more business-like, and business is looking ever more to delivering sustainable value.
Michael Taft, SIPTU, A new enterprise model: The long march through the market economy presented at the 6th Annual NERI Labour Market Conference in association with the Whitaker Institute, NUI Galway, 22nd May, 2018.
Recently, shareholder groups have sued companies for inadequate disclosure in the annual proxy. They allege that companies provide insufficient disclosure to determine how to vote on “say on pay.” If a company follows SEC guidelines, why is this not sufficient?
Information & Insights For Entrepreneurs and EmployeesBoyarMiller
Starting, growing or selling a business is exhilarating. The city of Houston possesses a powerful support network for business owners, but there is much to consider with any new business or growth strategy.
As entrepreneurs ourselves, BoyarMiller understands the pressures entrepreneurs and executives face, and we are passionate about helping them resolve challenges and pursue new opportunities.
Working in partnership with businesses is an increasingly central strategic priority for many NGOs. Yet for every successful high profile partnership, there are many others that do not even get off the ground, or fail to deliver real value despite plenty of work on both sides. In this short Insights report, CoCreate Senior Consultant Andy Caldwell explores some of the emerging trends in NGO-Business Partnerships, specifically providing five key insights for NGOs and other organisations looking to partner with businesses.
To learn more about our work in the area of Corporate-NGO partnerships, check out our Corporate Partnership Essentials Webinar Training Course: http://www.cocreateconsultancy.com/events/webinar-training-course-corporate-partnership-essentials
From the point of choosing the appropriate business structure to the scope and extent of necessary contracts, there are numerous legal issues to address when starting a company. While certain legal issues may even bring a start-up to a grinding halt if neglected, there are many others that are possible to be handled with ease, provided you have the right information to make timely decisions. Given their importance across sectors, the following issues and details will be covered in “Legal For Startups”.
• Legal Aspects for Starting Up:
• Contractual safeguards:
• Employees and workplace regulations:
• Data Protection
ICC ethics and compliance training handbook chapter 13 resisting solicitationiohann Le Frapper
I have contributed to the chapter on the topic of solicitation and how to resist solicitation of the ICC Ethics and Compliance Training Handbook released on December 9th by the International Chamber of Commerce. It can be purchased on-line at http://iccbooks.com/Product/ProductInfo.aspx?id=698
Authored by: James R. Copland, David F. Larcker, and Brian Tayan Stanford Closer Look Series, May 30, 2018
Proxy advisory firms have significant influence over the voting decisions of institutional investors and the governance choices of publicly traded companies. However, it is not clear that the recommendations of these firms are correct and generally lead to better outcomes for companies and their shareholders. This Closer Look provides a comprehensive review of the proxy advisory industry and the influence of these firms on voting behavior, corporate choices, and outcomes, and it outlines potential reforms for the industry.
We ask:
• How accurate are the voting recommendations of proxy advisory firms?
• How influential are they over voting practices and corporate choices?
• Should steps be taken to reduce their influence or improve the reliability of their recommendations?
• Would greater transparency, back-testing, and regulation improve the market for their services?
Shareholder activism is exploding: The number of activists is increasing, their assets under management are growing, and their tactics and strategies are changing. We believe that companies that put themselves in an activist’s shoes will be most able to anticipate, prepare for, and respond to an activist campaign. So what should they know—and do?
Find out in PwC’s report, Shareholder activism: The who, what, when, & how.
Co-Operation and Competition: Antitrust Pitfalls in R&D Alliances and Other S...iohann Le Frapper
Practical tips for in-house counsel on the assessment and management of key risks, ie. antitrust and intellectual property associated with strategic partnership opportunities (printed in International In-house Counsel Journal-Issue of April 2012)
Deryck Palmer on What's Next for the Energy Sector
Christopher Garcia on Cyber Threats
Crowdfunding: How Communications Will Provide the Keys to Capital
JOBS Act: Hedge Fund Communications Options Poised to Expand
Paul Winum on CEO Succession
Karen Lisko on Juror Evolutions
NACD BoardVision on the Future of Directorship
Blogs Worth Following
Issue or ConsiderationSole Prop.General PartnershipLimited P.docxpriestmanmable
Issue or Consideration
Sole Prop.
General Partnership
Limited Partnership
Limited Liability Co
Subchapter “C”
Corporation
Subchapter “S”
Corporation
Liability
Unlimited personal liability
Unlimited personal “Joint and Several” liability for Partnership
Gen Partners (at least 1):unlimited liability
Limited Partners: Limited to investment
Shareholders- no personal liability beyond investment
Shareholders- no personal liability beyond investment
Ease of Formation
No formal requirements
No formal requirements
Requires formal filing
Requires formal filing
Requires formal filing and qualification and “election” with IRS
Ease of Operation
No issue
Limited concern- as agreed
ONLY General Partners operate
No participation of Limited Partners
Shared operation between Directors (major decisions) and Officers (day- to- day) and Shareholders (fundamental changes)
Shared operation between Directors (major decisions) and Officers (day- to- day) and Shareholders (fundamental changes
Taxation
No additional tax issue or burden
Partnership return with Pass through to individual partners
Partnership return with Pass through to individual partners
Possibility of double taxation
Avoids possibility of double taxation
Capitalization
Limited to loans (usually banks)
Limited to loans (usually banks)
Also have limited partner investment
Issue stock or Bonds
Issue stock or Bonds
Duration
Limited duration
Limited duration
Limited duration (gen. Partners) flexibility with limited partners
Perpetual
Perpetual
Alienation
No
No
No-General
Possible with Limited partners
Simple stock transfer
Simple stock transfer
Partnership Form of Business
The partnership is defined as the type of business operation formed between two or more persons interested in a common course: Making profits. The government recognizes a few kinds of partnerships (Lorette, n.d., para. 1). At the point when setting up an association, the first thing you will need to do is pick a name for the organization. While this may sound basic, it is imperative to make certain the name does not abuse the trademark privileges of another business. There are a few approaches to figure out whether another business as of now, has such a name. Firstly, one can do a name search online on the U.S. Patent and Trademark Office website. Also, one can conduct an inquiry of enrolled entrepreneurs. However, this procedure is followed via the legal office (secretary of state.)
Likewise, partners should decide the specifics of how the organization will be overseen, how much every accomplice will contribute, and how the benefits will be shared. While the more prominent the extent of the venture implies the bigger the rate of proprietorship, the greatest investor may not even need to maintain the business. Additionally, while you may confirm that all accomplices have equal force in choice making, certain accomplices ought to be recognized as having the power to settle on choices on everyday operations and the general ad ...
HOW SHOULD MAJOR DECISIONS BE MADE IN A BUSINESS PARTNERSHIP?Julian Swartz
HOW SHOULD MAJOR DECISIONS BE MADE IN A BUSINESS PARTNERSHIP?
There are three basic commercial decision-making choices in partnerships: consensus, partner conversation, or delegation. The Articles of Partnership document of a company contains a lot of information about its structure and decision-making procedures.
What Are the 5 Essential Elements of a Partnership Agreement?
The value of capital contributions
Partnering responsibilities
It is decided how earnings and losses will be distributed.
Acceptance of responsibility
Dispute resolution
Read more...https://julianswartz.com/f/how-should-major-decisions-be-made-in-a-business-partnership
Financial valuation of alliances and partnershipAlfred Griffioen
What is the financial value of a partnership, alliance or strategic collaboration? What network orchestration roles are there and how do these roles influence the value?
What is the value for a company to participate in a network? This depends on the synergy factor and the power balance. How to gain influence in a network?
Article about different competitive strategies and how these relate to basic types of alliances. An introduction to the book Creating Profit Through Alliances
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De cooperatie als optimale rechtsvorm voor samenwerking tussen kleinere ondernemers, freelancers of zzp'ers. Aansprakelijkheid, verantwoordelijkheden en onderlinge overeenkomsten
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Nu het aantal ZZP-ers en freelancers groeit wordt samenwerking tussen mkb-bedrijven belangrijk om tenders voor grote opdrachten te kunnen winnen. Hoe regel je dit met bedrijfsaansprakelijkheid en met onderlinge alliantie overeenkomsten?
Article The Strategy Accelerator - Which businessmodels and strategies are va...Alfred Griffioen
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Whitepaper De 3 B's van Alliantievorming - Businessmodel, Contractuele Basis,...Alfred Griffioen
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Whitepaper Businessmodellen voor Allianties - Hoe samen meer winst te maken?Alfred Griffioen
Wat is een businessmodel en welke businessmodellen zijn er voor allianties of strategische samenwerking? Dit artikel beschrijft de manieren waarop partijen gezamenlijk een betere marktpositie kunnen krijgen dan afzonderlijk.
Whitepaper Troubleshooting in Allianties - Wat als het tegenvalt met je strat...Alfred Griffioen
Het management van een partnership verschilt duidelijk van het managen van een activiteit of business unit binnen een bedrijf. Wat is de beste manier om een alliantie te besturen, hoe bouw je vertrouwen op, hoe zorg je dat ook je medewerkers het belang zien en wat te doen als het resultaat van de samenwerking tegenvalt?
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Innovate your business model to gain higher ROI. Determine your sustainable competitive advantage (market relevancy or a unique product) and choose your strategy: ally, combine, excel or consolidate. This presentation in English is based on the Dutch book 'De strategieversnelling'. See www.strategy-accelerator.com
Digital Transformation and IT Strategy Toolkit and TemplatesAurelien Domont, MBA
This Digital Transformation and IT Strategy Toolkit was created by ex-McKinsey, Deloitte and BCG Management Consultants, after more than 5,000 hours of work. It is considered the world's best & most comprehensive Digital Transformation and IT Strategy Toolkit. It includes all the Frameworks, Best Practices & Templates required to successfully undertake the Digital Transformation of your organization and define a robust IT Strategy.
Editable Toolkit to help you reuse our content: 700 Powerpoint slides | 35 Excel sheets | 84 minutes of Video training
This PowerPoint presentation is only a small preview of our Toolkits. For more details, visit www.domontconsulting.com
Building Your Employer Brand with Social MediaLuanWise
Presented at The Global HR Summit, 6th June 2024
In this keynote, Luan Wise will provide invaluable insights to elevate your employer brand on social media platforms including LinkedIn, Facebook, Instagram, X (formerly Twitter) and TikTok. You'll learn how compelling content can authentically showcase your company culture, values, and employee experiences to support your talent acquisition and retention objectives. Additionally, you'll understand the power of employee advocacy to amplify reach and engagement – helping to position your organization as an employer of choice in today's competitive talent landscape.
An introduction to the cryptocurrency investment platform Binance Savings.Any kyc Account
Learn how to use Binance Savings to expand your bitcoin holdings. Discover how to maximize your earnings on one of the most reliable cryptocurrency exchange platforms, as well as how to earn interest on your cryptocurrency holdings and the various savings choices available.
Understanding User Needs and Satisfying ThemAggregage
https://www.productmanagementtoday.com/frs/26903918/understanding-user-needs-and-satisfying-them
We know we want to create products which our customers find to be valuable. Whether we label it as customer-centric or product-led depends on how long we've been doing product management. There are three challenges we face when doing this. The obvious challenge is figuring out what our users need; the non-obvious challenges are in creating a shared understanding of those needs and in sensing if what we're doing is meeting those needs.
In this webinar, we won't focus on the research methods for discovering user-needs. We will focus on synthesis of the needs we discover, communication and alignment tools, and how we operationalize addressing those needs.
Industry expert Scott Sehlhorst will:
• Introduce a taxonomy for user goals with real world examples
• Present the Onion Diagram, a tool for contextualizing task-level goals
• Illustrate how customer journey maps capture activity-level and task-level goals
• Demonstrate the best approach to selection and prioritization of user-goals to address
• Highlight the crucial benchmarks, observable changes, in ensuring fulfillment of customer needs
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1. How to capture video testimonials that convert from your audience 🎥
2. How to leverage your testimonials to boost your sales 💲
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Discover the innovative and creative projects that highlight my journey throu...dylandmeas
Discover the innovative and creative projects that highlight my journey through Full Sail University. Below, you’ll find a collection of my work showcasing my skills and expertise in digital marketing, event planning, and media production.
Discover the innovative and creative projects that highlight my journey throu...
Four complicating factors in negotiating an alliance
1. Alliance experts
Four complicating factors in negotiating an alliance
Alfred Griffioen
Introduction
A number of complicating factors may crop up while
forming an alliance. Four such factors, which are
irrespective of the type of alliance or its legal form,
are discussed below. Each of the factors could be a
pitfall, so a deliberate choice is needed whether to
avoid this type of alliance or to manage the risks
with the given guidelines. This article concludes with
a paragraph about the termination of an alliance.
Difference in size
Whenever a smaller company collaborates with a larger company, chances are that
the collaboration carries much more significance for the smaller one. This places it
at risk of being neglected or overshadowed by the larger company. A change of
management in the larger company can even mean a loss of all interest in the
collaboration.
The larger company, meanwhile, faces a different risk: it is likely that the knowledge
and commitment of the smaller company strongly depends on just a handful of
people. If any of these should leave the company or lose interest, this may
jeopardise the collaboration. The smaller company may also lack the strength or
scope to go along with new developments or market changes, which can also
devalue the collaboration.
These issues generally play a role if the difference between the companies, in terms
of turnover, staffing and size, exceeds a factor of 10. This is not an absolute figure.
Doing business with an autonomous business unit of a large multinational can be
very like doing business with a small company. And a high-tech company with 20
people on the payroll will often be a much stronger partner than a production
company with 20 employees.
As a ‘standard’ example, consider smaller technology firms that may have just one
or a few products, but with which they truly contribute something new to the
market. Such companies often consist of the founders plus a few others, and they
lack the size and skills to commercially exploit their product. Here, collaborating
with a multinational is an obvious option: it gives the larger company access to
technology, and gives the smaller company access to the market.
However, the companies' interests may differ. For the technology firm, the product
for which the alliance is set up may yield the lion's share of their turnover. For the
multinational, the added revenue may basically be negligible. Certainly if the
manager (at the multinational) who made the deal leaves or makes an internal
career move, the technology company may wind up in an impasse: the exploitation
rights have been sold but are not generating any income, due to the larger
company's lack of interest.
Alfred Griffioen - Four complicating factors in negotiating an alliance 1
2. Alliance experts
From the smaller company's perspective, the best solution would be to make clear
arrangements about interim payments and the use of the provided expertise. Every
bit of knowledge transfer should be met with immediate reward, at least partly. This
reward can be payment for a patent or an hourly tariff for the deployment of
experts. In addition, a success fee may be arranged for every successful market
introduction.
The smaller company cannot force its partner to market a product containing its
expertise. For that reason it makes sense to couple any exclusive agreement to a
'shelf clause'. This means that, if the product development does not result in a
market introduction within a predetermined period (that is, is shelved) or does not
achieve a certain sales volume, then the smaller party is free to offer its patents and
experience to another party.
That this is something to take seriously was a lesson learnt by the British
smartphone company Sendo, that entered into an alliance with Microsoft in 2000.
Sendo had advanced quite a way in developing a telephone suitable for Internet
applications, the Z100, and Microsoft was developing software for it. The agreement
stated that the Z100 would be developed further jointly, and that Microsoft would
receive part of the profit.
In 2001 Microsoft invested 12 million dollars in development, and was entitled to
appoint a supervisor to the Sendo board. From that moment on, the development of
the Z100 started to lag behind. Sendo claimed that Microsoft was secretly scheming
to rob the company of its technology, market knowledge and customers. In 2002
Microsoft entered into an alliance with another company to develop a product
comparable to the Z100. Sendo and Microsoft wound up in a drawn-out court case,
and the Z100 disappeared from the market.
For the larger company, it is important to have assurances with regard to the efforts
and availability of the smaller company's key staff. This can be arranged, for
instance by coupling this to a bonus or by making the payment of compensation
conditional on their contribution.
More than two parties
Working with three or more parties introduces a new sort of dynamic in an alliance,
certainly if these parties decide to collaborate in a new legal entity. In the latter
case, it may happen that the majority makes a decision that is unfavourable for the
minority. This is comparable to an association that decides to raise the contribution
fee to finance new investments. Members not interested in those new investments
will have to contribute regardless, or else must relinquish their membership.
There are two mechanisms that can reduce the chance of such decisions being
made:
• First, the statutes of the new legal entity or a separate agreement can
stipulate that certain decisions require a larger majority or unanimous
consent; for instance, decisions that will change the scope of the
collaboration.
Alfred Griffioen - Four complicating factors in negotiating an alliance 2
3. Alliance experts
• Second, there will always have to be some sort of equilibrium between the
partners. If a decision clearly disadvantages one of the participants, he may
decide to quit the collaboration or may start exhibiting opportunistic
behaviour.
Working with three or more partners often bears features similar to working in a
network. A collaboration between competitors will generally have a very formal and
transparent structure. If it concerns complementary parties, it is customary for one
of the parties to shoulder the coordination.
Small companies
Increasing numbers of knowledge workers are offering their services as an
independent one-person company, or with just one or two co-workers. It is
particularly attractive for this category of companies to collaborate as it will enhance
their profile on the market and enable them to bid on large assignments.
However, the downside is that formalising a partnership is a comparatively larger
burden for a small company than a large one. They will often lack experience with
such contracts, let alone have a lawyer in employment. Fiscal aspects will need to be
examined, regardless of how big the deals are. Furthermore, in smaller companies
this kind of investigative work is prone to getting snowed under by the day-to-day
operational activities.
It is therefore important for small companies to use a standard organisation form to
arrange governance, finances and liability. Practical aspects of the collaboration
such as consultancy structures, marketing, household regulations and
administration will often be taken care of as part of the group dynamics.
In the Netherlands, Alliance experts has set up a collaborative structure for solo
entrepreneurs in the form of a cooperative. This legal form is used infrequently, but
it does offer a means of letting members enter and exit the collaboration without
requiring a notary. Every member has an equal say in governance and receives a
share of the profit proportionate to the amount of work that he or she performed
through the cooperative. The cooperative concludes the contract with the client and
arranges the execution of the assignment with one or more members. More than 25
cooperatives have been set up in this way within the span of one year.
Public-private partnerships
So far we have examined collaborations between two or more private organisations.
But what if the opposite partner is a government agency or public institution, a
school or a hospital, or a research institute? It may well be that businesses view
such organisations as inward-looking, bureaucratic and difficult to work with.
Conversely, the public sector may see collaborating with the business sector as
something akin to selling your soul to the devil.
A great deal of knowledge, influence and customer contact is contained within
public organisations. A window cleaning firm with a recommendation letter from the
municipal authority will more easily find customers within that municipality.
Furthermore, public organisations also have their markets and objectives, except
Alfred Griffioen - Four complicating factors in negotiating an alliance 3
4. Alliance experts
that their primary objectives are often of a non-financial nature. Citizens'
satisfaction, safety, quality of life and ensuring an attractive neighbourhood are
typical examples. Finances form a necessary condition here, and this is where
opportunities for collaboration may be found.
Whoever is able to arrange a collaboration in such a way that it helps the public
organisation fulfil its goals more successfully, or can ensure that extra funds remain
to devote to quality improvement, has a good chance of engaging a public entity in
such collaboration. The point is thus to pursue parallel objectives.
The organisation form for a public-private partnership can be a new legal entity, but
in many cases the public organisation assumes a facilitating role while the business
performs the activities. A public authority may, for example, sell land to a project
developer and set certain parameters for the development of a new housing estate.
Or, a group of primary schools may refer parents seeking after-school care to a
specific commercial child care centre. In such instances, an arrangement concerning
financial settlement may suffice.
Termination of the alliance
In some cases a collaboration will end upon the completion of a project. Apart from
possible shared guarantee obligations, the bond between the partners is dissolved.
In most cases, however, it cannot be envisioned clearly beforehand when a
collaboration will cease to exist.
This means that two matters have to be arranged:
• It needs to be clear who can end the partnership: each partner individually, or
only by all partners jointly? If no arrangements have been made, then
generally the latter case applies.
• If the alliance is terminated, it needs to be clear what happens with the
possible reserves, debts, patents, rights and obligations. It could be that one
of the partners wishes to continue the activities and wants to buy out the
other. Various regulations exist to facilitate this process.
While a partnership involving natural persons runs the risk of one the partners
passing away, in a partnership between businesses there is the risk of one the
partners going bankrupt. Also for that situation, the continuation of activities needs
to be arranged properly, for instance by arranging to transfer the patents to the
surviving company.
One of the most important aspects to consider is what risks you run that could lead
to a termination of the collaboration, and what you can do to guard against that.
The product or service that you have developed may fail to generate interest. If you
are the one contributing the concept (preferably protected by a patent or copyright),
are you in a position to switch to a partner with more marketing power without
incurring excessive costs? Or if you're the bigger company considering collaborating
with a small inventor, what will happen if you run into a dispute, or if his venture
collapses? Does it mean you lose your entire investment, or can you acquire the
patent for a small fee? Since there is no legislation on this point in many countries,
you are free to make your own arrangements in a contract.
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5. Alliance experts
An important tool to help settle disputes and prevent a premature exit is to appoint
what is called a ‘contractual board’. This board is composed of representatives of
both parties, that all have equal voting power. All parties thus need to come to an
agreement in this board in order to take a valid decision. In a joint venture this
board may coincide with the shareholders meeting. For two small companies it may
simply consist of both owners.
The competences of the contractual board should be laid down in the collaboration
agreement, and may range from defining the research or marketing budgets to
appointing the daily operational management of the partnership. The board
members can also address opportunistic behaviour exhibited by one of the
partners. If the contractual board fails to reach agreement, the next step would be
to call on mediation by a neutral third party, or to dissolve the alliance in
accordance with the provisions of the collaboration agreement.
The simple fact that this possibility exists without it being necessary for one of the
partners to have committed a real breach of contract, with all the ensuing damage
to reputation and lost opportunities, is often enough to desist a partner from
engaging in opportunistic behaviour.
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