1. CL@CAMEIRA LEGAL 1 Governance Structures: The Heart of Joint Ventures and Alliance Arrangements UIA - 2014 Florence Congress Joint Session Mergers and Acquisitions Commission and Corporate Law Commission November 2014 CL@ CAMEIRA LEGAL 2014 Maria Antónia Cameira

2. 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

3. 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

4. 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

5. CL@CAMEIRA LEGAL Governance matters reserved to parents Operational management Minority protection Deadlock and dispute resolution 5

6. 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 structures Equity Joint Ventures Vs Contractual Alliances 6

7. 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

8. 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 control Directors V Shareholders 8

9. CL@CAMEIRA LEGAL Non voting rights with enhanced economic rights; Different classes of shares with different voting rights. Control at shareholder level 9

10. 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

11. 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 minorities Options and protection devices 11

12. CL@CAMEIRA LEGAL Quorums Decisions with greater majorities At shareholder level 12

13. 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 structures Elections, destitutions and powers 13

14. 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

15. 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

16. 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

17. 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

18. Questions? 18

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