This paper provides empirical evidences that help understand rationale behind participation of private businesses in collaborative watershed management and the conditions in which it can be effective. We focus on the case of Volvic where Danone has initiated from 2005 onwards a watershed protection program in partnership with local public authorities in order to sustain the flow of two water services, i.e. water quality and availability. We develop a comprehensive analytical framework based on the most recent developments of Ostrom’s socio-ecological framework. We identify a number of attributes of the SES system that are likely to explain innovative feature of the local action situation (new local governance arrangements and economic incentives) involving the agricultural sector and aimed at reducing the use of chemical inputs and improving the management of cattle effluents in the area.