Congratulations, you have just joined your first family business board. The company has grown over the three generations to be a $200m pa agriculture business. You and two other new directors are the first independent board appointments for the company.
Your induction was fairly casual, but you put that down to “it being a family owned business”. Getting into the detail, you find that the business is not just one company but an amalgamation of intertwined companies, transacting between each other to achieve the best tax outcome. The major shareholder is the managing director, the CFO is his son, and heir-apparent, and all shareholders are on the board. Due to recent weather events, the business appears to not be in as strong a financial position as you thought…and that’s not the only surprise.
You will be asked to decide and influence your peers to undertake the most appropriate course of action. for dealing with a looming financial crisis and its root-cause. This will be a consultative process and will include:
- clarifying the issue;
- gaining consensus on the options;
- agreeing the best path forward;
- implementing the agreed option; and
- respectfully providing your feedback
This is an opportunity to test your decision-making skills and remind you of the processes, tools and behaviours to apply in similar situations. You will need to have a practicing knowledge of director duties and good board decision-making practices.