Blog Series: Part 2 of Farm Succession Planning
PASSING YOUR FARM TO THE NEXT GENERATION
This is the second part of a 3 part blog series full of valuable information pertaining to farm succession planning.
The Importance of a Board of Directors in Your Family Farm
When you think back through your life there are likely moments that stand out as extra meaningful because of the great memories they created within your family. Whether it's Christmas morning opening presents with your favorite cousins, or family dinners with your whole family seated around the table discussing the day’s events, these moments are magical. These moments are what make up your family traditions. We’ll never argue with anyone against the power of family traditions. Family farms like yours are built on the foundation of tradition. It’s what has kept you growing for so long. However, the bigger your company grows, the more family tradition can begin to cloud your leadership decisions.
Non-family board members
This is why we always recommend that all family businesses, especially family farms like yours, pour your energy into developing a board of directors that is made up primarily of non-family members. Surely this sounds like a mistake to too many people reading this. You’re thinking, “of course we want the board members to all be members of our family.” We understand. This is a response we often hear, but the reality is that an unbalanced board leads to unbalanced decision-making.
When members of your family are tasked with making critical financial or operational decisions about your family farm, they bring a lifetime of bias. Certainly, this rings some bells for you. When you’ve watched generations of your family run a family business you develop an idea of how it ought to be done. Your vision can get clouded by tradition and loyalty. But, on the flip side of the coin, your family traditions and loyalty are what make your family farm what it is. It’s the heart and soul that your parents and grandparents put into their work that has allowed you and your children to follow in their footsteps.
Strike a balance
As you develop a board of directors for your family farm, it’s wise to work toward striking a healthy balance of family and non-family members. Consider how adding unbiased industry experts, young creative business leaders, and wise experienced farmers might strengthen and support the great work your family board is already doing.
Take the board’s direction to heart
Ideally, your board consists of wise leaders whose self-interest in the company isn’t at stake, but they want its legacy to succeeding as your family business. You shouldn’t feel threatened by these leaders. Although you won’t always agree with these folks (and you shouldn’t), rest in the fact they want what is best. Listen to their advice. It’s how multigenerational companies last as long as they do.
When done successfully, preparing to leave your family farm to the next generation is a complex and thoughtful task. By taking the time now to develop a diverse board of directors made up of a majority of non-family members, you're creating an environment where tradition and loyalty are celebrated and enhanced by the many experiences and viewpoints of other trusted colleagues. After all, no board of directors can change the family traditions that you remember so fondly from your youth.
Farm Credit of Central Florida provides financing for Farms, Homes, and Land. Call us today at 863-682-4117!