The board’s role is to govern the company, rather than manage it. It is the role of senior management to manage the company, taking into account the advice and direction of the board.

It is recognised that given the small nature of this farming company and the close relationship between management and performance, that management issues may well be broached at board level. However, in this situation, it should still be recognised that successful implementation of management strategies and ultimate accountability must be the responsibility of management.

The role of a board can be encompassed in two main areas:

Ensuring compliance (through monitoring of the company and promoting accountability at both board and management level);

Improving the performance of the company through strategy formulation and policy making.

Specific tasks that the advisory board can provide to the business include:

• Assist in setting the goals of your business including short-term, medium term and long term objectives;
• Input into the overall strategic direction of your business;
• Ensuring policies for the farming operation achieve business objectives and are in keeping with overall strategic direction;
• Reviewing the performance of the CEO or general manager, and possibly other family members at management level;
• Approving and monitoring budgets;
• Reviewing and approving capital expenditure (possibly beyond a certain level) which relates essentially to the utilisation of cash surpluses;
• Reviewing progress towards business goals and promoting accountability within the management structure.

The advisory board should consist of non-executive along with existing family members (being executive members). The make-up of the board should have a blend of expertise in accounting, finance, business management and industry exposure.

Where specific expertise is required (e.g. legal) specific people may be asked to attend board meetings.

For individual board members to perform roles effectively several requirements need to be met which include:

• Access to appropriate, timely and accurate information;
• Sufficient time to enable directors to carry out specific duties;
• A willingness to ask questions that go to the fundamental core of an issue, and may at times pursue independent lines of enquiry with other team members.

As this is an advisory board, family members (shareholders) will have sole discretion over board membership, term and specific roles.

Expectations of directors in the board process include (but are not limited to):

• Acting in a business-like manner with integrity and in the best interests of the company as a whole;
• Using judgement, common sense and tact when discussing issues;
• Being sensitive to interpreting any request or indication from the chairperson that aims to ensure the orderly and good-spirited conduct of the meeting;
• Fully support board decisions, particularly with discussions involving business partners, suppliers, customers, staff and other stakeholders;
• Keeping confidential all board discussions and deliberations;
• Disclosing to the board actual or potential conflicts of interest which may exist or might reasonably be thought to exist between the interests of the director and the company.

The Chairperson’s role within an advisory board is critical to the success of this process. This person is considered the lead director and effectively facilitates the governance process.

The chairperson will normally be a non-executive director with experience in this role. Suggested that the chairperson is elected by yourselves prior to the first meeting, or indeed elected at the first meeting.

Specific roles of the chairperson include:

• Chair board meetings;
• Establish the agenda for board meetings in consultation with CEO / General Manager;
• Regularly review with the CEO / General Manager progress on important initiatives and significant issues facing the company;
• Provide a mentoring role for the CEO / General Manager.

A company secretary is nominated with the primary responsibility of:

• Coordination of board papers and agenda and forwarding these to directors at least five working days before meetings,
• Recording and distributing the minutes of board meetings.

*This role may not be appointed officially and may be conducted internally as required.

The meeting agenda is a key element in the planning process for all board meetings with the intent of enabling an efficient flow of information which results in effective decisions. A typical board agenda may look something like this:

1. Date, time and venue;
2. Apologies;
3. Approval of minutes of the previous meeting;
4. Matters arising from the previous meeting;
5. Formal approval of matters requiring discussion;
6. Specific reports that may be required by directors;
7. CEO’s report;
8. Finance report (if not included with CEO’s report);
9. Operational policy issues (may be supported by discussion papers);
10. Strategic issues;
11. Contributions from outside specialists if scheduled;
12. Other business;
13. Date, time and venue of next meeting;
14. It may be useful at various points to review the meeting progress and evaluate.