Minding Ag's Business

Guidelines for Family Meetings

When farms were one-man shops, you could carry your hopes, aspirations and business practices in your head. As the scale of farming has grown, we've seen multiple family managers, in-laws and generations involved. That's demanded a higher standard of professionalism and a need for more transparent communications between family members. As DTN's Farm Family Business Adviser Lance Woodbury shares in his June column, "In Defense of Meetings," one pressing purpose of agendas and timetables is to convert "I" knowledge into "we" knowledge.

Beyond the rationale to hold meetings, families might need refreshers on best practices so they maximize their efforts. I asked Lance to recap how to make the most of family meetings:

Woodbury, AgProgress: Marcia, a caveat to the suggestions that follow is that the design of more formal family business communication should take into account the culture and the informal communications that occur in the organization. For example, I know of one family where the principal owners gather every morning either in the office or at a restaurant for breakfast. The operational decisions get sorted out daily, and their “big” decisions happen gradually over several days or weeks through consensus, and each owner has a chance to discuss the emerging strategy with their spouse as the decision takes shape. But another family I know has a more official, quarterly meeting structure -- all family members don’t interact daily -- and they take a formal vote on big decisions.

FREQUENCY

At a minimum, family business meetings to cover significant issues should happen annually. These meetings can be coordinated with the legal requirements of entities like corporations or limited liability companies that call for annual meetings. Depending on who is at the table, I like to see strategic, big picture meetings happen at least a couple of times a year. If the business is addressing performance issues or rapid industry change, quarterly or monthly meetings may be in order. But a well designed meeting a couple of times each calendar year can go a long way in keeping people on the same page.

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LENGTH

If meeting twice a year, I would suggest a half or full day meeting each time. If quarterly, perhaps three hours and if monthly I would suggest two hours. The longer time between meetings, the longer the actual meeting should be, as there is some catching up or even re-education that likely needs to occur on certain topics.

TOPICS

Beyond succession and estate plans and updates, some of the topics we discuss include financial performance; human resource issues like hiring, employee performance, compensation and reviews; capital improvements and expenditures; growth strategies; landowner relationships; equipment needs; reports from industry meetings; issues with vendors; FSA, banking, legal and insurance concerns; community involvement and charitable contributions. Related to the family we will talk about policies including professional development and education; owner compensation and distributions; family member entrance expectations; and communication strategies with family members not working in the business.

PREPARATION

Ideally, it is good to give participants time to think about the agenda and key topics several days before the meeting. Tasking a family member with preparing an agenda, drafting a background paper on an issue or writing a proposed family business policy will help people come ready to discuss. In fact, spreading the preparation duties to other family members helps further everyone’s knowledge of the key business issues.

A final note is that some of these meetings are a good way to let younger and potentially future family business participants begin to learn about the business. Occasionally asking high school or college age family members to sit in can help them develop a realistic view of the management needs of the business, something they may not get by performing manual labor each summer or on their holiday breaks.

Remember my saying that in the absence of a good story, people make one up! Family business meetings can be one strategy to keep people aligned in their view of future challenges and opportunities.

Note: DTN subscribers can find Woodbury's columns in recent features and on the Farm Business page.

Follow me on Twitter@MarciaZTaylor

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