How to run an effective family succession meeting

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Over the years, I have been involved in a number of family succession meetings as both a family member and an external facilitator. In my experience, when the issue of management and farm asset succession is addressed openly and early by the older generation and relationships are good, these family meetings are relatively straightforward.

Too often, however, the transition from one generation to the next is never addressed, no one knows what is to happen or when and it is assumed that the “will” will finally provide the Successionanswers. This is a recipe for disaster and at the recent RCS Succession & Continuity Planning Roadshow in central Queensland, Kylie Wilson, Anderssen Lawyers, stressed that this approach can not only destroy family relationships but can also have dire financial consequences.

In my experience, there are nine keys to a successful family succession meeting:

BEFORE THE MEETING:

1. Bring someone in who is independent of the family and has experience in facilitation
An external facilitator does not provide the answers. They manage the process to draw the possible solution/s from all family members at the meetings. They facilitate discussion and provide frameworks for the family to analyse suggestions and obtain agreement on the desired outcome. The agreed proposal should then be analysed by specialist legal and accounting personnel to ensure that what the family wants can be achieved in the most legal and tax effective way. It is great to see RCS becoming more involved in helping rural families with Succession and Continuity Planning and I am now part of a specialist team at RCS offering this service.

2. Choose a neutral venue and catering
A neutral venue away from the farm. This avoids unnecessary interruptions to the meeting due to activities on the farm. If your meeting is in “town” you will fix the pump when you get home and find it has broken down. On the farm, the broken pump can provide a welcome escape from a difficult meeting – most people try to avoid conflict! Family meetings held at the kitchen table often reflect a family hierarchy, which has existed for a generation. This is a business meeting and your place at the table should not bring forth old memories of being chided as a child for not eating your vegetables.

Catering should be prearranged to provide minimal disruption. The female members of the family should be at the meeting not in the kitchen. Leaving the meeting to prepare smoko or lunch is another easy way to avoid family conflict which must be addressed.

3. Have an agenda
An agenda provides focus for the meeting and ensures people know what they’re coming to discuss. A facilitator will work with you to develop an agenda for the meeting. From working with many other families, they know the steps that have to be taken to achieve outcomes.

4. Involve all stakeholders
As a family, it is important to involve everybody in the meeting; this includes children that have chosen career pathways off the land, the daughter-in-laws and son-in-laws and anybody else who will be affected by the result of succession and continuity planning. A good external facilitator will contact each individual by telephone before the meeting to gain his or her personal perspectives and will be impartial and objective.

5. Set clear goals
 It is essential that each member involved comes to the meeting with their personal goals written down. This may take some time, thought and preparation and needs to be communicated honestly with all members of the family at the meeting. If people are not clear, open and honest about their aspirations, there is a chance that they will do what is “expected” of them rather than following their dreams and what is fulfilling for them.

Jim Rohn’s quote highlights this point very clearly:

“If you don’t design your own life plan, chances are you’ll fall into
someone else’s plan. And guess what they have planned for you?
Not much.

AT THE MEETING:

6. Have agreed ground rules
A facilitator will work with the group to establish and ensure participants respect ground rules such as:

a. We will be positive not negative
b. We will focus on the future not the past
c. We will be constructive not destructive
d. Negotiations will continue if anyone voluntarily leaves the room.

7. Allow open communication
It is critical to obtain the ideas of all family members and ensure all voices in the family group are heard by all participants.

If dominant members continually interrupt and do not listen to others’ points of view, I use an orange, which I pass to the speaker. If you do not hold the orange, you have to listen and cannot speak until you have the orange in your hand.

Some people will not contribute an opinion until they are asked to do so. Often these quieter, more reflective members of the family at the meeting are thinking about the issue while the rest are talking and not listening effectively. When a response is drawn from them, it is usually more considered and often very helpful.

Managing conflict in the group is vital to a successful family succession meeting. Avoiding conflict is a natural reaction, however, to achieve a meaningful outcome we have to consider different points of view in a rational and unemotional way. An external facilitator can minimise the emotion and focus on the facts.

Asking the difficult questions: It is important that every participant’s thoughts and feelings are considered. I find that one of the best questions I can pose as a facilitator is “Will you be happy with the outcome in 5 or 10 years if you do nothing now?” I have also observed that many of the younger generation, including my own children, do not want to discuss succession as they have to face the inevitable death of their parents. I have suggested that we simply ignore the issue of death but instead ask the question “Will Dad & Mum still want to be running the farm when they are 95?” If the answer is “no” then we need to work on a transition plan now.

AFTER THE MEETING:

8. Distribute the minutes (a record) of the meeting
It is the role of an external facilitator to ensure that accurate minutes, or a record of the meeting, are kept and distributed to all participants after the meeting. It must include a clear list of actions (what is to be done, by whom and by when). This written record of the meeting provides an accurate record of outcomes of the meeting and should be circulated in draft form and agreed to by all participants immediately after the meeting while what was “actually” said is clear in your minds. It can be used as the basis for discussion with legal and taxation specialists.

9. Outline the next steps…
Have you ever been to a meeting that felt like it was pointless? There must be movement in a forward direction following the meeting. This means that it may involve further meetings, it may involve specific actions from family members, what is important is that families keep moving towards their desired outcome. You can expect your facilitator to contact you to keep the process moving – we know how easy it is to get side tracked by the demands of the farm.

Sadly, too many families end up in the courts with the farm having to be sold to pay the legal fees.  I have also seen too many siblings, who played no part in the succession planning decisions, contesting outcomes finally revealed in the will.  I want my children to always be the “mates” they are today, supporting each other throughout their lives.  Working with them to understand their visions and goals to develop our “family succession plan” has been very rewarding.

I encourage you to use an external facilitator at your meetings.  I am proud to be part of the RCS Succession and Continuity team and would love to speak to you about your family situation and your steps forward.

RCS can also conduct an independent business analysis and develop forward cash flow and balance sheet projections on which to base sound decisions.  We also have key industry partnerships with taxation, legal and off-farm investment specialists and are able to match you with knowledgeable professionals.

Rural Succession and Con (1)

 

 

 

 


Article by
Claudia Power
Principal RCS Advisor
& RCS Succession and Continuity Planning Team Member

Claudia Power 1