While private and family-owned businesses may not be subject to all of the legal and regulatory rigors of publicly-traded companies, your business can nevertheless benefit from good governance practices suitable for your company. Our program features an opening dialogue with Lynn Clarke, a director of several privately-held companies, primarily in the food, beverage, retail, and e-commerce sectors, and Bill Schlimbach/VP-Deputy General Counsel and Corporate Secretary at J.M. Huber Corporation, one of New Jersey's premier family-owned companies, operating in industries ranging from personal care products to food and beverage, flame retardants and smoke suppressants, sustainable forestry and engineered wood products. We'll then launch into a series of expertly-led roundtables, in which private and family company leadership and directors will share issues, ideas and learnings on topics such as: What is the linkage between effective governance and a company's legacy and future prospects? What are the options for an effective governance structure? Does my company need a board of directors, an advisory board or other oversight body? Should we bring in outside members to our board? And what skills do we need? How should we be using a board: objective reality check and good sounding board on strategy, competitive threats, long-term growth, talent and compensation? What are workable boundaries between the roles of board and management? What are some of the issues where we could get real value from a board: succession planning, coaching and mentoring your management team, assessing your longer term plans/strategy, identifying disruptive risks? We encourage company leaders to attend in conjunction with a board member or members if your company has a board.
DISCUSSION SUMMARY AND KEY TAKEAWAYS
HERE'S WHAT YOU MAY HAVE MISSED
This well-attended event with a mix of private and family-owned businesses opened with an informal conversation between Bill Schlimbach, General Counsel for J.M. Huber Corp. a 6-generation family-owned business and Lynn Clarke, a family-company Board Director, a former private company owner and corporate executive.
Bill presented the history about how the Huber family decided, due to the size and complexity of the business, to create a formal board of directors, and the to bring non-family Independent Directors into the decision-making process. This was later followed, due to the absence of a family member to replace the retiring CEO, by the hiring of a non-family CEO. In such cases, as is true today, active communications and frequent interaction with the family members have been critical in building and maintaining the trust of the non-family management. In addition, the implementation of an internship for young family members to gain a working insight about the business; on-voting Director seats on the Board; and on understanding the strategic decision-making process, which Bill emphasized, are critical components of their proactive process of succession planning.
Lynn shared her experience of when she bought a business and formed a Board of Directors, who not only brought their individual experiences, but provided a solid sounding platform to challenge her about the future, which she referred to as a “Hard Head with a Soft Heart.”
She also shared her experience as a Director of a family-owned business, which similar to Bill’s experience, brought in non-family member executives who actively mentored the next generation of family members to learn the business and gain operational experience. She presented a board maturity model and described three factors that are often recommended for good family and private business governance: establishing a family council, developing a strategic planning process and setting up a board of directors.
The informal conversation was following by discussions at each table of specific topics relevant to the special environment surrounding private and family-owned businesses. These ranged from when does the business transition from informal to formal, the decision-making process, succession planning, and managing the dynamics of family values and business decisions. Each table’s takeaways were shared with the group. The common theme was that it takes hard work to be a successful family-owned or private business, and that the passion shared by the founder or owner is difficult to maintain without a succession planning process. This was underscored, as Lynn noted at the beginning of the program, with the statistic that only 5% of family-owned business continue to the 4th generation. Participants shared insights and suggestions for dealing with the various challenges presented to family and other privately owned businesses.
An overwhelming majority of the participants showed interest in attending another session on this theme and would allow more time on their calendars to cover the topic.
All participants were provided a copy of the 2017-2018 NACD Private Company Governance Survey to take to their boards. The survey is a comprehensive document, which includes insights and guidance on areas of particular relevance to private company boards.
2017-2018 NACD Private Company Governance Survey attached below.
Lynn Clarke is an independent board director, chair, and CEO with consumer packaged goods, technology, e-commerce, and digital and specialty retail expertise. Currently, Clarke is a director of several privately held companies, primarily in the food, beverage, retail, and e-commerce sectors. Clarke is a board member of the National Association of Corporate Directors’ (NACD) Atlanta chapter and a member of Women Corporate Directors and the Young Presidents’ Organization. A frequent speaker at events for business and educational groups, Clarke has most recently spoken at the Institute of Internal Auditors Conference on the role of boards and internal audit, at the Google-sponsored E-Commerce Traffic Summit, and at a Women Corporate Directors program on the Impact of Millennials on Consumer Markets. She has also spoken to board chairs about the board’s role in strategy at the Family Business Consulting Group’s Chair Forum and on building effective independent boards for privately held businesses.
William Schlimbach is Vice President, Secretary and Deputy General Counsel of J.M. Huber Corporation, a 135-year-old, 5th generation, multi-billion dollar family-owned New Jersey company. As Deputy General Counsel and Corporate Secretary, Bill works closely with the Board on governance issues including shareholder matters, heads a shareholder communication team and is regular liaison with family members including family leadership on relations with the Board and the Company. Bill has broad based experience in corporate and commercial legal and litigation matters including acquisitions, divestitures, real estate, bankruptcy, finance and securities. Bill started his career as an associate at the Javits & Javits law firm in New York, became a partner at Javits, then joined Huber in 1985, where he started out as counsel to 11 operating businesses, and in the mid 90’s, became responsible for the legal aspects of divestitures and acquisitions, financing, major capital projects, start-up businesses and a financial services business.
Headquartered in Edison, New Jersey, J.M. Huber Corporation has remained a family-owned business since its founding in 1883. Huber’s portfolio companies have strong leadership positions in many different areas, including: ingredients for personal care and food and beverage products; flame retardants for a wide range of polymer-based applications; engineered wood products for residential construction; and sustainable timberland management.