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The 4th ATTA Awards Dinner will again be held at the prestigious Club Lusitano in Central, Hong Kong on 7 November 2014.

Look out for requests for nominations after the summer.

ATTA member Jeanette Whyte, MD of Hong Kong-based Jenesis Consulting,explains how to implement a successful joint venture, using her past experiences in Asia as alliance director for LG Telecom and overseeing the JV between BT Group and LG Group in South Korea.

CFOs should manage the divergent interests of partners by identifying potential conflicts as far as possible during JV negotiations and making arrangements to deal with them. As an example of potential conflicts, companies can be partners in one market and competitors in another. A business opportunity may be presented to the JV that one of the partners would like to pursue alone, rather than through the venture. In a JV, as the same conflicts are likely to arise for both shareholders, suitable conflict management mechanisms should be agreed on and included in the shareholders’ agreement. Besides, when representing the JV, employees should remember to wear the “JV hat” and not the “holding company hat".

Using a disciplined governance process is a common characteristic of companies that implement successful JVs. CFOs who follow an internal governance process ensure that companies balance pressure for speed with a well-defined planning process. Rushing a deal can result in a lack of discipline. Investing resources in the early planning and launch stages is important, as neglect is likely to hinder implementation and ongoing operations.

Formal governance structures are vital to successful JVs. These include board structures, audit, compliance, risk management and conflict resolution. CFOs should also seek to develop a range of informal governance mechanisms for a successful JV. The mechanisms should include encouraging open communication and nurturing relationships between all levels of management of the parent and the JV company. The challenge for CFOs is to establish a governance system that promotes shared decision making and joint oversight without stifling entrepreneurship and timely decision making.

CFOs of the JV’s parent companies should adopt a flexible approach. For example, if one parent company has to compromise on the timing of setting budgets and financial planning, the other should be able to adapt to different risk appetites and changing market conditions, etc. Mechanisms should be in place to overcome changes in circumstances, such as building flexibility and adaptability into service-level agreements, performance targets and other metrics. However, in certain circumstance the changes may necessitate changes to the JV structure and therefore it is important to maintain an open and direct dialogue between the partners at senior level in order to ensure the long term success of the JV.

CFOs may find it helpful to appoint a JV relationship manager at an early stage of the planning process. The JV relationship manager role is responsible for ensuring the JV executes the business plan and meets its targets. The JV relationship manager is incentivised to provide a check and balance on the business case, as the deal team may be motivated to present an optimistic business plan given that they tend to be compensated on completing the deal. Engaging a JV relationship manager who understands the key drivers of the business case and is able to identify – at an early stage – issues that prevent the business from meeting its targets is likely to win the trust of the JV senior management team and consequently increase the overall success of the business.

Linking career progression to experiences with working in a JV helps attract talent. Providing financial rewards such as bonuses and stock options can help motivate people to join the JV.

This article originally appeared in Corporate Treasurer.  Copyright (C) 2014 Haymarket Media Ltd.

For more information on Jeanette and the work of Jenesis Consulting, see www.jenesisconsulting.com