Employ these simple practices to optimize engagement and decision-making
Most agribusinesses participate in board meetings during the year to assess operations and make decisions about their business.
Board meetings are an essential part of any agribusiness as their very purpose serves to maintain open lines of communication between owners and management. Communication that includes updates on the state of your business, assessments on the direction of the organization, and opportunities to establish policy. This is also the place where you exercise your fiduciary responsibility, and monitor and control the functions of your business.
In order to run your board meetings efficiently, ensure they stay on course, and achieve effective outcomes and results, there are several practices that K·Coe Isom recommends following:
Make Your Agenda Count
Meeting agendas should not be cookie-cutter lists. They should be carefully considered, creative and even challenging. To build an effective board agenda, survey your business ownership group to find out what kinds of information they want to hear during the meeting. Agenda items that can bring value to ownership boards include:
- Management reports. Most board meetings include an in-person report by at least one of the business’s operational managers. Expectations for these reports should be communicated ahead of time to these managers. For a cattle feedyard, for example, you can expect your yard manager to report information regarding the number of cattle on feed, cattle movements in and out of your yard, and the status of corn and hay costs. Managers vary in their communication styles, but management should never withhold information or leave owners or board members guessing or questioning what’s going on in the company. As a board member, cultivate closer communication with managers by clarifying expectations. Be professional and proactive in your dealings with your management team.
- Financials. Board meetings usually include some review of financial information. The challenge is providing enough insight without going overboard. You might consider rotating various aspects of financial reporting among different board meetings. At times, it can be helpful and educational to dive deep into financials, analyzing line items such as repair costs or salaries and wages. At other times, the financial report can include a more concise summary, such as a one-page account of cattle-yard performance.
- Consultant presentations. Some boards have in-person reports from consultants. These may include nutritionists or veterinarians, as well as presentations on accounting issues, risk management or debt financing. These can bring valuable perspectives to your board meeting.
- Company livestock and crop numbers. A board overseeing a business that owns significant amounts of cattle needs effective reporting of cattle performance, profits or losses and hedging strategies. The same is true whether it’s about corn, cotton, soybeans, almonds or dozens of other commodities.
- Customer service. Boards need to be brought up to speed on a business’s customer care, including complaints, commendations and customer adjustments.
- Capital budgeting. Capital investment is monitored and guided by the ownership board. Board members may approve the budgeting either on a by-project basis or above a certain size or dollar threshold.
- Policies and procedures. They may not be exciting topics or appear regularly on the agenda, but company policies and procedures must be established and reviewed by board members. Make sure your board meetings visit these as needed. These may include management of various operations as well as office and staff functions and control.
- Strategic planning. Some have described this as “thinking in the future while acting in the present.” Much of the responsibility for a business’s strategic planning lies with the board. This may cover growth strategies, diversification opportunities and significant changes in management tactics, such as cattle or feed procurement, marketing or risk management.
Facilitating a Board Meeting
In addition to an effective agenda, a successful board meeting relies on good facilitation, decision-making and record-keeping.
Sometimes the board chairman facilitates the meeting, but that role can also be filled by a manager or dominant owner. What’s important is that the facilitator has the board’s support and makes valuable use of a good agenda. An effective facilitator draws out constructive discussion that includes all participants and brings issues to successful resolution. Avoid a drawn-out exchange that doesn’t lead to a definite decision, leaving management without clear direction. Make sure all decisions, including financial amounts, names and dates, are properly documented in the minutes.
Not all board meetings must be attended in person. Some boards connect by conference call or video conferencing technology. What’s important is that board meetings should be carefully organized and well run. Productive board meetings will help foster the success you seek for your farm, ranch, feedyard or processing plant.
[Originally published in the High Plains Journal, December 2018, Managing for Success column by K·Coe Isom]