What is a partnering agreement? A letter of intent, an MOU, a legal document, a contract for services – or something else? This is a question that can be difficult to answer for any organisation, not least for a multinational company.
First things first. It is important to recognise that a partnering agreement is distinguished by its function rather than its form. In other words, there is no set template for a partnering agreement. Ideally, it will safeguard the interests of all partners, not just the author’s organisation. It will set out the basis of the relationship between partners. It will allow for adaptation in the face of uncertainty, including if one partner decides to leave the collaboration. And it will do all of this in a way that retains the spirit of a collaborative approach, avoiding over-complex or dry bureaucratic language.
Enough companies and other organisations have now been through the process of developing partnership agreements to demonstrate that there is a relatively standard set of considerations. However, each sector will have its own distinct internal dynamics to navigate in order to reach a satisfactory agreement, and this article considers the experience through a business lens.
The partnership manager will need to negotiate with various internal corporate teams, each with their own perspectives and interests in the proposed agreement. For example:
- The legal team’s overriding consideration is to understand what elements of the partnership, if any, have legal ramifications for the company and how/whether these should be reflected in the agreement;
- Marketing colleagues may ask why partnership agreements do not set out any direct, short-term, commercial benefits to the company;
- The procurement team may question why the agreement does not include a detailed specification of deliverables; and
- The public relations team may ask whether involvement in the partnership may leave the company’s reputation vulnerable to the actions of poorly-performing partner organisations.
In each of these cases, a different negotiation approach may be needed to ‘sell’ the partnership internally. And while this dialogue process is taking place, the company must also maintain buy-in from external partners – including guaranteeing the right to adjust or amend whatever agreement emerges from the company’s internal process.
In some cases, the process of developing of a partnering agreement, and the questions it prompts, may result in a renewed commitment to impact assessment in the partnership. Even the most progressive companies require that partnerships bring some kind of return, even if it is highly indirect and long-term.
Developing a partnership agreement should represent a good investment of time, an opportunity for stakeholder engagement and trust building. It is likely to result in a more robust partnership, with a clearer shared understanding of roles and responsibilities, of the organisational dynamics of each partner organisation, and of the aims of the partnership. And once an organisation has been through the process once, the agreement can serve as a template for future applications, which can save time in the future.
Within highly regulated sectors such as healthcare or natural resource extraction, the process of developing a partnership agreement can be particularly challenging. Conflicts of interest must be avoided; firewalls may be needed between commercial and non-commercial areas; and anti-bribery considerations are paramount.
Novo Nordisk, for example, has recently spent several months developing a partnership agreement template for use in partnership arrangements, including Cities Changing Diabetes. The company has developed a ‘decision tree’ to help diagnose quickly when a partnership agreement may be needed, and when another document may be more appropriate.
The decision tree helps to differentiate between sponsorships, donations, grants, consultancies and partnerships. It distinguishes between the purpose, partners, contributions, process and outcomes for each of these different arrangements. An internal definition of partnership has been developed, which also helps to distinguish situations where a partnership agreement is needed.
Importantly, the internal definition of partnership includes the term ‘co-creation’. This focus on co-creation recognises that no single organisation (including the company) has sole control over the direction of the partnership. And co-creation is at the heart of partnerships for the SDGs.
TPI and PRC have jointly developed a partnering agreement scorecard, which draws on the experience of 23 partnership projects facilitated by the Dutch Ministry of Foreign Affairs. This provides guidance to those coming to the experience for the first time.
In 2004, PiP’s Ken Caplan co-authored ‘The Partnership Paperchase’, looking at the experience of structuring partnership agreements in water and sanitation partnerships in low-income countries. Among other things, the document includes some standard wording to enable a partner to leave a collaboration (see page 27).
Photo: Tai Chi in central Tianjin; Cities Changing Diabetes
