Companies are under intense pressure to improve their environmental, social, and governance (ESG) performance.
In JVs, minority partners’ ownership stakes do not correlate with their voting rights and broader contractual punch. That is what we found when we looked at 55 JVs with at least one minority partner and reviewed the voting thresholds of 35 common decisions in the contractual agreements. This finding and others from our analysis carry profound implications for how companies negotiate for voting rights in a JV when they own less than 50%.
Minority partners in joint ventures can still negotiate substantial rights to have a say in business decisions.
Read the full article originally published in MIT Sloan Management Review.