{"id":92096,"date":"2025-02-03T14:15:15","date_gmt":"2025-02-03T19:15:15","guid":{"rendered":"https:\/\/www.rbcroyalbank.com\/en-ca\/?post_type=rbc_my_money_matter&p=92096"},"modified":"2025-02-03T14:15:15","modified_gmt":"2025-02-03T19:15:15","slug":"would-your-farm-benefit-from-an-advisory-board","status":"publish","type":"rbc_my_money_matter","link":"https:\/\/www.rbcroyalbank.com\/en-ca\/my-money-matters\/business\/right-sized-business-advice\/commercial\/would-your-farm-benefit-from-an-advisory-board\/","title":{"rendered":"Would Your Farm Benefit from an Advisory Board?"},"content":{"rendered":"\n
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As independent entrepreneurs, farmers are hard wired to innovate and adapt to the everyday variability that is inherent to farming. And most farms look to advisors \u2013 bankers, accountants, agronomists, nutritionists and veterinarians \u2013 for their expertise in the daily operation of the business. There might also be times when your farm business could benefit from establishing and formalizing an advisory board of experts outside your usual circle.<\/p>\n\n\n\n

What is a farm advisory board?<\/h2>\n\n\n\n

\u201cThe role of an advisory board can be anything the farm wants it to be \u2013 dealing with a big acquisition, an expansion, farm transition or human resources,\u201d says Terry Betker, farm management consultant and owner of Backswath Management<\/a> in Winnipeg, MB. \u201cMaybe you\u2019re looking for input on big picture decisions for your farm.\u201d<\/p>\n\n\n\n

Betker has been advising farm businesses for more than 30 years, including the use of advisory boards, and he\u2019s also had a place around the table on several farm advisory boards.<\/p>\n\n\n\n

How can an advisory board help your business?<\/h2>\n\n\n\n

For Leighton Kolk, the decision to bring in outside advisors grew out of monthly meetings he and his family were already holding as part of the overall management of Kolk Farms Ltd \u2013 a diversified beef feedlot, irrigated cropping operation, seed cleaning and retail family business in Iron Springs, AB.<\/p>\n\n\n\n

\u201cAfter about a year or two of our regular family business meetings, I wondered about bringing in another perspective because it\u2019s pretty easy to get tunnel vision,\u201d says Kolk, owner, CEO and chair of the advisory board.<\/p>\n\n\n\n

The expertise they were looking to add was around financial management. \u201cI recognized I wasn\u2019t as strong as I\u2019d like to be around financial statements and tax planning \u2013 and my kids were asking questions that I couldn\u2019t answer \u2013 so I approached a retired accountant I knew and he joined as our first \u2018outside\u2019 advisory board member.\u201d<\/p>\n\n\n\n

Over the years, the Kolk\u2019s advisory board has grown to seven. There are four Kolk family shareholders \u2013 Leighton, his wife Eleanor, their son Jordan and daughter Megan \u2013 one of their farm business unit managers (also a new shareholder), plus two outside members.<\/p>\n\n\n\n

\u201cWe recognized that we needed some strategic help around human resource planning and have brought in another paid advisory board member for the HR suite of things, as well as some strategic planning,\u201d says Kolk.<\/p>\n\n\n\n

The board is now a key part of big picture discussions about the family farm business \u2013 working at a higher level to focus on the business and not be in the business \u2013 and has evolved with the farm operation.<\/p>\n\n\n\n

Identify where outside expertise can help<\/h2>\n\n\n\n

Knowing when your farm business might benefit from an advisory board isn\u2019t always clear. Something might trigger it based on discussion you are having with your regular team of farm advisors that warrants additional input and ideas.<\/p>\n\n\n\n

\u201cAre there issues you keep bumping into or stumble on?\u201d says Kolk. \u201cFor us it was financial literacy, so if you can identify what those areas are, that might be a good start for an advisory board member.\u201d<\/p>\n\n\n\n

Betker has seen great value in advisory boards to help farms with whatever is going on in their business \u2013 transition planning, all aspects of financial management and human resources. \u201cA farm advisory board can be very helpful around investment and financing,\u201d he says. \u201cWe talk to more and more farms about how to structure their compensation program to labour, to management and to owners,\u201d says Betker.<\/p>\n\n\n\n

Whatever the issue, venturing into an advisory board doesn\u2019t have many hard and fast rules. For Kolk, it started with a little humility and realization that he didn\u2019t know all he needed to navigate financial reports, but he could reach out to somebody who could help.<\/p>\n\n\n\n

Advice for starting or growing an advisory board for your farm<\/h2>\n\n\n\n

There is no single way to set up a board, but Betker has some seasoned advice for farmers considering this route.<\/p>\n\n\n\n

For starters, productive advisory boards begin with some formality. He strongly recommends farms create a charter \u2013 a written document to set some clear parameters for the board \u2013 expectations, compensation, terms of service, etc. Advisory boards, unlike traditional board of directors, have no legal liability or fiduciary responsibilities to the farm operation.<\/p>\n\n\n\n

\u201cAs a rule of thumb, I would not include your accountant or lawyer or banker directly on your advisory board,\u201d says Betker. They are part of the day-to-day group of advisors for the farm business, and could be invited to a meeting if there is specific input required on a bigger issue.  <\/p>\n\n\n\n

\u201cI\u2019m also a little careful about putting family members on the advisory board that don\u2019t yet have an ownership interest,\u201d says Betker.<\/p>\n\n\n\n

That rings true for the Kolk\u2019s also. Leighton and Eleanor made the early decision to wait until their children were 25 years old before being able to become shareholders. Two of their three children chose to be involved in the family business, including ownership and a place around the advisory board table.<\/p>\n\n\n\n

When it comes to the specifics of how many board members and how often to meet, there are some guidelines although every board is a little different. \u201cI think one is very healthy and two is great \u2013 but the most important thing is the outside board members bring value,\u201d says Kolk.<\/p>\n\n\n\n

Betker uses three to five members that meet four times a year as a rule of thumb for an advisory board.  \u201cAt least one non-agricultural person would be good and don\u2019t be shy about asking people to join your board,\u201d says Betker.  <\/p>\n\n\n\n

As the advisory board for Kolk and his family evolves, the constant for them is the professionalism and unbiased approach their advisors bring to the task. \u201cThey ask straightforward questions without any emotional attachment, and they don\u2019t care about the paint colour of new equipment,\u201d says Kolk.<\/p>\n<\/div>\n<\/section>\n","protected":false},"excerpt":{"rendered":"

How to establish an advisory board of experts outside your usual circle.<\/p>\n","protected":false},"author":80,"featured_media":92114,"parent":57338,"menu_order":0,"template":"wp-custom-template-optimizely-mmm","meta":{"_acf_changed":false,"advgb_blocks_editor_width":"","advgb_blocks_columns_visual_guide":"","footnotes":""},"tags":[229,574],"rbc_content_type":[31],"rbc_audience":[110],"rbc_lob_group":[35],"rbc_difficulty_level":[33],"rbc_mmm_category":[305,391,326],"class_list":["post-92096","rbc_my_money_matter","type-rbc_my_money_matter","status-publish","has-post-thumbnail","hentry","tag-agriculture","tag-commercial-insights","rbc_content_type-article","rbc_audience-business-owners","rbc_lob_group-business","rbc_difficulty_level-beginner","rbc_mmm_category-business","rbc_mmm_category-commercial","rbc_mmm_category-right-sized-business-advice"],"acf":{"contently_publication_id":"","custom_author":"Jane Robinson","rbc_video_header":"","rbc_media_duration":"","rbc_video_keywords":"","rbc_video_description":"","rbc_video_upload_date":"","rbc_toc_for_mmm_tag":"h2","rbc_toc_for_mmm_limit":6,"rbc_toc_for_mmm":null,"rbc_toc_for_mmm_action":""},"yoast_head":"\n\n\n\n\n\n\n\n\n\n\n\n\t\n