Paper
Building Win-Win Investor Investee Relationships
Different perspectives of a "win-win relationship"
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28 pages
This paper attempts to narrow the gap of understanding between investors and investees, in an effort to make the investment process more time-efficient and less painstaking. The paper provides the following details of the research:
- Methodology: in-depth interviews with banks, microfinance institutions (MFIs) and international investors;
- Purpose: to use the experiences of international investors and MFI/ bank investees to define the components of a "win-win" investment relationship.
The study finds that a win-win relationship is established where:
- Both the investor and investee have clear objectives and agree on the timeline for achieving them;
- Management buys into the agreed objectives and has the incentives to achieve them;
- There is a clear separation of management and board roles and responsibilities;
- Boards operate with authority and do not refer to shareholders for decisions that boards should be making;
- Governance structures are in place to bring independence of board and establish respective responsibilities of management, shareholders and board;
- Legal documentation is clear, simple and comprehensive.
It concludes by listing the following characteristics of a win-win relationship:
- Strong human capacity within the organization;
- Committed management team;
- Established performance culture;
- Meeting/exceeding of performance expectations;
- Creation of value for all stakeholders;
- Meeting of timescale for achieving objectives;
- Measurable return both in financial and other relevant terms.
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