Ryan Agre, vice president of finance and family office for Vermeer Corporation, a manufacturer of industrial, commercial and agricultural equipment based in Pella, Iowa, explains how effective governance provides a strong foundation for his dual role:
I’ve spoken to a lot of family businesses around the country on ways in which they can continue to develop their governance structure.
If the desire is to have a dual-role executive and family office leader, you need to have a fairly mature family office concept and business model. You have a healthy balance between what’s being processed on the family side and what’s being processed on the business side. You have two distinct spaces that you’re operating in, but they’re actually one, and the family has to figure out how they interrelate. And a lot of times there’s way more integration than they fully understand.
We’re not trying to rip the family out of it, but you have to have boundaries — that’s part of good governance and essential for a common understanding by the family, the board and management.
For instance, at Vermeer, we have a plus-one board structure: We have at least one more independent director than family director. That’s effective governance. Corporate matters that are brought to a vote have the opportunity for independent directors to work with shareholder directors, but we don’t have a family atmosphere where personal desires could sway the vote. Independent directors are helping keep an independent perspective that is not personal.
On the family side, you also need to have a structure. For Vermeer, it is the Ownership Council, which allows all family members to be represented in a capacity that provides a voice. The voice is not the boardroom. But you need a body that allows all family members to come in with grievances, with opportunities, with suggestions. And we work through that, have great conversations, and then figure out from a collaboration standpoint what needs to be brought to the board and what needs to be brought to executive management.
You also have family members who are a part of the executive staff. They know their function when they’re sitting in the executive office is the company. They also know they’re a family member, and a shareholder. They’re not going to deny that, but they are very effective at understanding their different roles.
Effective governance in all those spaces is what provides the opportunity for me to step into a multifaceted role.
