The document discusses the importance and benefits of establishing a business advisory board for family owned businesses, noting that only one third of family businesses currently utilize such boards. It outlines that advisory boards can help implement good governance, provide impartial advice and expertise, and assist with long-term strategic planning to help ensure the sustainability and success of the business across generations. The document also provides a case study example of the benefits a family business received from recruiting non-executive directors to their advisory board.

1. Business Advisory Boards
Their role in the family farm
Bill Winter

2. Boards in Family Owned and
Farming Entities
Help or Hindrance ?

3. SAMPLE
• Agribusiness - Dairy, Piggery, Cattle
• Regional Food Company
• Rural Engineering Company
• Sand and Soil Supplies
• 8 x Regional Business $5 – $20
million
• Regional Construction Co

4. Farming Families
“WE ARE THE CUSTODIANS FOR
FUTURE GENERATIONS”

6. Only one third of family business use
a formal board of directors or an
external advisory board
(survey KPMG/FBA )
“THOSE WHO HAVE AN ADVISORY BOARD
OUT PERFORM THOSE WHO DON’T”
PwC / MGI / FBA

8. Why a Board ?
• A board of Directors is defined by its legal
responsibility
• Section 198 of the Corporations Act 2001 states
“the business of a company is to be managed under
the direction of the directors”
• The responsibility is shared by all directors
Are dad and mum on the board ?
Your sister or your kids?
Your mates ?

9. It does not matter what
size you are. Or, if you are
an active or a passive
director
The Corporations Act 2001
applies to all directors
Shadow directors ?

10. The Key Challenge for External Advisors
How do you help implement
governance, compliance and
business disciplines and still
maintain the family vision,
culture and core values that got
them to where you are today ?

11. FAMILIES IN BUSINESS

12. BOARD ADVISORS STAFFOWNERS
A BETTER CHANCE OF SUCCESS

13. Four key essentials for family
business long term success
• Business advisory committee

14. Four key essentials for family
business long term success
• Business advisory committee
• Succession plan

15. Four key essentials for family
business long term success
• Business advisory committee
• Succession plan
• Business plan

16. Four key essentials for family
business long term success
• Business advisory committee
• Succession plan
• Business plan
• Buy & sell agreement

17. WHERE will you be
in the future?
HOW do we
get there?
What will
you look
like ?
This is
what’s
known
Strategic
or Business
Plan
Review
Measure
Change

18. Dealing with boards does not come easily to
most family business founders
A board will inhibit their
ability to make
decisions

20. They cannot come to
terms with the changing
business compliance
and risk management
environment of the
2000’s

21. AREAS OF CONCERN
•Corporations Act 2001
•OHS legislation
•Fair Work Australia 2009
•Competition and
Consumer Act 2010
•Privacy Act
•Environmental Protection
Act
•ATO
•Industry Code of Conduct
•ASIC
•Dangerous Good Act
•Equal Opportunity Act
•Disability Discrimination
•Race Discrimination Act
•Equal Opportunity for Women
•Sex Discrimination Act
•Health Records Act
• Human Rights and Equal
Opportunity
•Whistleblowers Protection Act

23. Family members don’t
take kindly to advice
from outsiders

25. Family and business
issues should not be
shared with
nonfamily members

27. Case Study

28. Quote : “Why We Recruited NEDs”
• Good governance
• Umpire
• Ensure sustainability of our business
• Transparency
• Attractive to prospective employees
• Flexibility

29. Benefits
for the 2nd Generation and Beyond
• Wise counsel – Impartial
• Ask the hard questions
• Focus on issues not personalities
• Long term strategy planning
• Credibility with financiers, Govt,
marketplace

30. Non Executive Directors
What have they brought to our board?
• Can be more objectively critical
– Can be critical on family performance - family can
be protective of each other
– Can provide opinion that is solely in the interests
of the business and not influenced by family
matters

31. Non Executive Directors
• Specialist skill sets we needed
– If you’ve got a Non Exec of the right skill set, can
provide knowledgeable, clear and sometimes
alternate thinking
• Added expertise in our core business
– Added an outside experienced view to our
internal views and experience
– Gave us a foot in the butt when needed

32. Non Executive Directors
• Sounding board for ideas
– Family can use to think through ideas – are we
getting carried away with ourselves?
– Very helpful in strategic planning
• Assistance in family conflict
– An independent thought in family discussions
– Family reporting to family,
i.e. performance reviews, salary reviews, promotion,
career planning

33. Bill Winter
Email : billwinter@bigpond.com.au
www.pointnorth.com.au