CORPORATE GOVERNANCE AND BOARDROOM DISPUTES IN THE CONTEXT OF JOINT VENTURES
Joint ventures (JVs) are any business arrangement whereby two or more parties combine their resources to pursue common corporate goals. JVs are usually (but not invariably) pursued through the incorporation of a special purpose company, with each of the JV parties holding shares in the company.
Often requiring ongoing cooperation between different parties across long periods of time, JVs are fertile ground for corporate governance tensions when differing commercial priorities, asymmetric shareholdings and evolving market pressures collide.
This article highlights some of the most common pressure points arising in JVs and considers how thoughtful JV structuring can mitigate the risk of such tensions from escalating to a formal dispute, and the options that JV partners have when disputes do arise. We assume here a company incorporated in England and Wales but many of the points made commonly arise in other jurisdictions.
Board representation and quorum
A company’s board of directors manages its day to day affairs. Accordingly, JV parties should carefully consider the composition of the JV’s board to ensure that all stakeholders are appropriately represented.
JV parties can specify board composition matters in the JV company’s articles of association or a shareholders’ agreement. Boards should be structured to best reflect the relative investment or stake of each JV partner, so as best to protect those stakes. Generally, shareholders with the largest shareholdings should have more board representation.
Apr-Jun 2026 issue
Norton Rose Fulbright LLP