The modern agribusiness is a very different beast to what it used to be.
These days, it is much larger, and more complex in many aspects. For example, the idea of engaging ongoing external advice is much more prevalent than it was historically.
In the days of farming as a "lifestyle", the idea of having someone from outside the business giving suggestions and advice was, in the most part, a foreign concept.
Generally, any external advice was provided by the accountant. If the accountant had been dealing with the family for a long time, it could be hard to give advice without fear or favour, particularly if the advice given affected certain family members more than others.
This is where an advisory board can play a part.
I have seen structured arrangements, as well as more casual ones. Both can work equally well.
The best results inevitably come when differing views are brought to the table and consensus prevails.
Some agribusinesses start with a casual advice model, while others jump in boots-and-all from the get go.
Like the public company boards, people can come onto advisory boards with specific skills, such as finance, legal, negotiation, or production.
Alternatively, they may have a broad combination of skills that make them suitable.
Unlike a public company board, the advisory boards I have seen are not directors of the agribusiness.
As the name suggests, they are there in an advisory capacity only.
It can often take a while for everyone to settle into their new roles, as it can be quite a change, particularly for the agribusiness owner.
Independence is a hallmark of Australian agriculture, and sometimes it is not easy accepting other opinions into the mix, especially if they contradict your own.
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Conversely, some agribusinesses are ready to fully embrace outside advice with gusto.
In these situations, the idea has normally evolved across a long period of time, and the advisory board is just the end result.
Occasionally, the notion of outside advice has been thrust upon the agribusiness by circumstances, sometimes within the business's control, and sometimes not.
This can occur, for example, when the business has a run of bad seasons, or certain decisions haven't paid off.
The business may be encouraged - normally by the bank - to get some outside advice to assist the business going forward.
Hopefully this advice has come in time to help the business get back on track.
An imperative of an advisory board is to do its job, and add value.
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If anyone on the advisory board firmly believes that something will assist the business, they are obligated to bring that idea forward, even if it's not popular.
Difficult situations may arise where the agribusiness family members are not suited to certain roles, or are not meeting expectations. Or, there might be a completely different topic that is contentious.
It doesn't matter either way - if it needs saying, it needs to be said, though always in a professional courteous manner.
The best results inevitably come when differing views are brought to the table and consensus prevails, not when everyone agrees with each other, as this negates the reason for having an advisory board in the first place.
If everyone in the room wants the business to prosper, then the advisory board will be successful.
- Details: bagshawagriconsulting.com.au