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While boards of directors are common at large firms and nonprofits, family businesses don’t always see their value or understand how to use them well.  However, according to consultant and author Larry D. Hause, boards can help family businesses make better decisions and thrive, if they are structured the right way and used effectively.

There’s no better way to kick off 2023! This program dives into essential governance topics such as finding board talent, accountability, decision-making & planning, training the next generation and so much more.

Join Craig Lloyd of Lloyd Companies, along with two key non-family executives, to learn how 15 years of working on their family business has prepared them for their current state of business and family. You’ll leave with at least one strategy, and likely several, to use in your own family business succession planning (video starts at 2:40).

Within families that own banks, there can be a disconnect between parents who control the bank and children in line to take their place. Some parents struggle to see their grown children as fully-realized adults while members of the rising generation might view parents as out-of-touch and ready for pasture, having had enough time at the helm as primary shareholder or chief executive, or both.

The first business succession plan attorney Larry Hause developed was for his own family’s business, a NAPA auto-parts store in South Dakota. “It was a small business with big problems,” Hause says. The transition did work out: Hause’s youngest brother bought the business and it’s thriving. But the experience showed Hause that family-business owners and managers need to be on the same page. 

You may be a parent contemplating how to bring up topics to the younger generation. Or, you’re in the next generation trying to figure out how to bring up topics to parents or grandparents that may stir up emotions. Larry Hause of Hause Family Business Transitions will lead a conversation with two of our family business members, Jennifer Edney of Edney Distributing Co., Inc., and Mark Moffatt of Moffatt Products, Inc. We’ll discuss how to best prepare for conversations we know we need to have but may not be easy to have.

Whether your business uses a board of directors, is thinking about starting one or if you serve on a board, the Board School could be for you. Prairie Family Business Association’s Board School is designed for business owners who:

• Are considering establishing an advisory or fiduciary board.
• Want to increase the value and effectiveness of their current board.
• Are hesitant to establish a board because of a presumed loss of control.

What is the purpose of a Board in a private/family business? What are a Board’s responsibilities? How does a Board work with owners? How does a Board work with management?

This session will examine the process of succession and exit planning from a number of possible exit scenarios.

LARRY HAUSE, JD is a nationally recognized family business and wealth transition strategist, attorney and author who specializes in helping owners resolve difficult, contentious and seemingly “impossible’ transition challenges in a low risk, highly effective.

As an attorney, Larry understands the legal rights and responsibilities of owners, directors and managers; the tax consequences of changing ownership; and the numerous ways properties can be held and allocated to protect the business and resolve differences among owners.

The random stabbing death of Todd Bachman, chairman and CEO of Bachman’s Inc., during a visit to the Beijing Olympics shocked those who knew him and the venerable Minneapolis-based floral and garden center. Amidst grieving, the family-owned business turned its attention to an issue that inevitably rises when a key executive dies suddenly and unexpectedly: leadership succession.

At some point following a tragedy that befalls a business leader — for some, way too soon — thoughts and actions must focus on business. What needs to be done? Who will do it? When? How? The questions can seem endless and answers unclear. When a well-known person or company is involved, add the stress of public relations.

Instituting term or age limits for directors is a way to ensure you have the right board members to help your family business grow and thrive in today’s competitive marketplace. Requiring directors to step down once they have served a predetermined number of terms or reached a certain age takes emotions out of the equation because the board members know in advance when they’ll need to step down.

1. Begin early and talk often about succession planning.

The process never stops. It’s continual and intentional. You don’t know what you don’t know! Take time to work on your business.

2. Mission and Core Values

Your mission and core values can guide your decision making as both a family and as a management team. Create these and rely on them! Being a family business is an advantage to long-term survival. The more challenging times we overcome, the more likely we are to increase our longevity – so look at challenging times as opportunities.

These are proven characteristics that will drive you to become a Century Club Company – 100 years old and older!

-Presenters Vicki TenHaken, Mike Paton, Sara Stern, Stacey Pearson, Adam Gallenberg, David Plummer.

A Board of Directors is supposed to direct. That seems pretty obvious. But that is not usually what we find in family businesses in transition. We find three things: first, we see boards that are not active. They are viewed as legal requirements of a corporation, not a valuable asset.

Joe let his notes from the trustee committee fall on his desk, the different viewpoints still ringing in his ears: The Blacknair family had approached Joe about his bank serving as co-trustee of their family trusts to replace another trust company who wanted to resign. Joe had just made his initial presentation to the committee, and the response he received was not favorable. Joe opened the file of the background information he assembled for the committee and began reading again . . .

This article provides a functional definition of governance for private businesses (as opposed to public companies) and distinguishes the roles and responsibilities of governance from the roles and responsibilities of the family, ownership, and management.

Did you hear the story about the fellow who spent more time on deciding what car to buy than on choosing his wife? Sad but true, many family businesses make the same mistake in choosing a Transition Consultant to help with the transition of their family business. The point is to put forth the effort to find the right Consultant because your family and business are major parts of your well-being.

The Allen family consists of six adults. All but one spouse is working in the family-owned, international businesses. The main business is toy design manufacturing. The other businesses include toiletries and men’s sport clothes. These items are mostly made in Asia, with some still being made in Australia, the original home of the company. Sales for the company are $250M per year. The company had a Board of Directors which included the entrepreneur, her husband, and their close friend and trusted legal advisor. The business executive team includes the board member and several executives who have key oversight.

Every family business has a balance point—a place where the owners’ values, needs and goats are effectively integrated with management’s values, needs and goals. Knowing where your business’s balance point is located is key to running a successful business and transitioning it successfully.

The balance point model is defined as an alignment or integration of the family, owners, and enterprise interests—as well as a balance of separation and integration.

Separation can help clarify roles, responsibilities, authority, and accountability. Separation can also help identify values, needs, and goals

Did you know that 70% of all family businesses fail to successfully transition from the first generation to the second, and that 80% fail to successfully transition from the second generation to the third? This statistic is alarming.

This issue expands on our October December 2013 newsletter that recommended practical steps to reduce legal risks when family members jointly own and manage a business. With help from Larry Hause (page 2, left column), we provide more recommendations on this topic. Also, we provide a reminder (page 2 right column) that Minnesota employers need to update their employee handbooks and written policies.

1. I will be honest with you.
2. I will disagree openly – improving relationships demands accuracy not agreement.

Park Industries has made stone working machines for decades. But for the past few years, another type of enterprise has been taking shape within the family-owned St. Cloud company.

Why do we need to plan for long-term care? We’re living longer—a lot longer—and there is a diminishing availability of caregivers. Then there is a significant probability of needing care. If you are already 65 or think you’re going to live to 65, there is a 70 percent chance you’re going to need long-term care.

FFI Fellow status was established in 2001 top recognize individuals who demonstrate ongoing expertise and commitment to the field of family enterprise. To be eligible for Fellow status, individuals must complete an FFI Advance Certificate, be an FFI member for ten years, and present at an annual conference or be published in Family Business Review or The Practitioner.

The Interdisciplinary Achievement Award recognizes outstanding achievement in the advancement of interdisciplinary services to business families.