Breaking Off the Partnership: When a Strategic Alliance Breaks Down

Partnerships are great, but the needs of your organizations might not match up forever. A recent split between associations in the world of financial valuation underlines this point.

Partnerships are great, but the needs of of partnering organizations might not match up forever. A recent split between associations in the world of financial valuation is a case in point.

Sometimes the strongest of alliances simply don’t last—even when there’s a clear industry benefit to keeping a united front.

Last week, two key organizations that had partnered in the professional valuation space—the International Association of Consultants, Valuators, and Analysts (IACVA) and the National Association of Certified Valuators and Analysts (NACVA)—announced that they would be parting ways, with the U.S. organization, based in Salt Lake City, cutting its ties to the international group.

The associations, which had been strategic partners since 2000, have some differences—IACVA is nonprofit, while NACVA is for-profit, for example—but shared a goal of creating standards for business and intangible-asset valuators. So what changed?

Going in different directions: In a press release regarding the split, IACVA suggested that NACVA’s priorities had moved away from its own. “Management’s actions at NACVA indicate that its membership no longer believes it is important to be involved with international valuation standards and the international network for collaboration that is available with other experts,” a statement issued by Toronto-based IACVA said. NACVA, the larger of the two groups (it has at 7,500 members to IACVA’s 6,000), recently played up its credentialing in a year-end message from association CEO Parnell Black. “The credentials you hold and cherish are those that meet the highest standards,” Black wrote. “I believe it is important that our members know that the Certified Valuation Analyst (CVA) credential meets the highest standards. There are no higher standards.” Black noted the CVA credential recently had been accredited by the National Commission for Certifying Agencies.

A push for standardization: As Compliance Week notes, the two groups had an incentive to continue working together. Both the U.S. Securities and Exchange Commission and London-based PricewaterhouseCoopers argued for the need for a single, consistent industry standard. “The fragmented nature of the profession creates an environment where expectation gaps can exist between valuators, management, and auditors, as well as standard setters and regulators,” Paul Beswick, now the SEC’s chief accountant, said in a 2011 speech cited by the publication.

When breakups make sense: But not every partnership is destined to be advantageous to all parties. As an ASAE resource page offering insight on the benefits of such strategic alliances notes, there are significant challenges that can limit their usefulness—such as having a partner that doesn’t hold up its end of the bargain; a potential drain on human and financial resources; a scope that limits (or goes far beyond) an association’s mission; and the inflexibility such a partnership might create. For example, the journalists’ diversity coalition UNITY has lost two of its largest members in recent years due to organizational issues; and sometimes, mergers can seem like a better idea to one association than to another.


Ernie Smith

By Ernie Smith

Ernie Smith is a former senior editor for Associations Now. MORE

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