Table 2
Contractual Governance: A Summary

Contractual Provision

  

Average Importance Rating (Rank)
% of Deals Which
Included Provision (Rank)
Investor Veto Rights Over Acquisitions and/or Divestiture Activity
2.56 (  2)
78.3% (T2)
Investor Approval Required for Strategic Plans and/or Budgets
2.53 (  3)
78.3% (T2)
Management Can Be Forced to Seek an Exit if Required By Investors
1.83 (11)
31.1% (11)
Investor Approval Required to Hire or Fire Senior Personnel
1.90 (  9)
39.6% (  8)
The Level of Management Compensation Must Be Approved by Investors
2.17 (  6)
61.3% (  6)
Share Options May Not Be Issued Without the Approval of Investors
2.34 (  4)
76.4% (  4)
Non-Compete Contracts Required of Management Upon Termination
2.33 (  5)
74.5% (  5)
Investor Veto Rights Over Capital Expenditure Plans
2.12 (  7)
54.7% (  7)
Investor(s) Must Countersign Bank Cheques Above a Certain Amount
1.49 (12)
21.7% (12)
Restrictions on the Ability to Raise Additional Debt or Equity Finance
2.73 (  1)
88.7% (  1)
Management Equity Ratchet Provisions Are Included as Part of the Deal
1.87 (10)
38.7% (  9)
A Specific Dispute Resolution Mechanism is Agreed in Writing
2.01 (8)
36.8% (10)