Building Win-Win Investor Investee Relationships
Mar 2007, Hinton, P.

Different perspectives of banks, MFIs and international investors on the definition of a "win-win relationship"?

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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Publisher(s):
ShoreCap Exchange

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