CIBC Mellon: Managing a Cross-Border Joint Venture

During his 10-year tenure, the president and chief executive officer (CEO) of CIBC Mellon had presided over the dramatic growth of the jointly owned, Toronto-based asset servicing business of CIBC and The Bank of New York Mellon Corporation (BNY Mellon). In mid-September 2008, the CEO was witnessing the onset of the worst financial crisis since the Great Depression. The impending collapse of several major firms threatened to impact all players in the financial services industry worldwide. Although joint ventures (JVs) were uncommon in the financial sector, the CEO believed that the CIBC Mellon JV was uniquely positioned to withstand the fallout associated with the financial crisis. Two pressing issues faced the JV's executive management team. First, they needed to discuss how to best manage any risks confronting the JV as a consequence of the financial crisis. How could the policies and practices developed during the past decade be leveraged to sustain the JV through the broader financial crisis? Second, they needed to continue discussions regarding options for refining CIBC Mellon's strategic focus, so that the JV could emerge from the financial meltdown on even stronger footing. This case is intended to provide an example of best practice in joint venturing. There is a school of thought within the scholarly community that suggests that JVs are less profitable than wholly owned subsidiaries, are a transitional organization form, are very hard to manage, and are a vehicle that might result in the loss of one's technology. The CIBC Mellon JV provides a counterpoint. It has been quite profitable and stable, has not resulted in BNY Mellon losing its technology contribution, and senior management has been able to effectively manage operations.

• Leadership
• Strategic alliances
• Joint ventures
• Financial crisis