News Briefs

May 1999 

Top Ten Survival Tips

        The Forum's annual dinner program has become a tradition enjoyed by all.  Each year members gather to relax, socialize, enjoy a wonderful dinner, and participate in a family business experience.  This year was no exception.
        On May 3rd eighty-nine owners, successors, non-family managers, family business professionals, and educators gathered at the Butte des Morts Country Club for a delightful evening of cocktails, socializing, dinner, and program.
        Following cocktails and dinner, the husband and wife team of Dennis and Wendy Mannering entertained us as they guided us, David Letterman style through the Top Ten Survival Tips for Families Who Work Together.
 

In Appreciation

        About four years ago, family business professionals - insurance and investment advisors, accountants, lawyers, and educators  - began meeting with regional family business owners to discuss the need and feasibility of beginning an organization designed to help family businesses survive to subsequent generations.   Schumaker Romenesko & Associates sc (SR&A) was among these visionaries.
        Led in this effort by Pat Landreman, SR&A decided to join in partnership with Retained Earnings/Mass Mutual; McCarty, Curry, Wydeven, Peeters & Haak, and the College of Business Administration at the University of Wisconsin Oshkosh to sponsor this fledgling organization.
        Now, three years later, the Forum thanks Schumaker Romenesko & Associates for its commitment - financial, intellectual, and physical - to the Forum.  We are extremely grateful to Pat, Kerry Koehler, Steve Toepel, Mark Smith, and their colleagues for providing this extraordinary commitment.  We will miss their involvement.
 

Welcome!

       We are pleased to introduce the John Meyer family of Meyer Services, Inc., Appleton.
        Meyer Tree Services was founded in 1963 as a tree trimming service.  At that time, John Meyer provided a majority of his services to the utility companies in the area.  In 1980, as the majority of cabling went underground, John took advantage of the change in the industry, changing the name to Meyer Services, Inc. Thus, he positioned the company for the next generation.
        Today John's children -- Dan, Paul, Amy, and Sandy -- are actively involved with John in the business' growth and success.  John's wife Joyce, once active in the business when it operated out of their home, now plays a less active role.
 

Successors Peer Group

        Extending the discussion on program topics, sharing experiences, bouncing ideas off one another, and building networks are the core of the successor group's agenda.
        About 15 successor generation members have indicated a desire to meet as their schedules allow.  About half a dozen successors have been meeting on the second Tuesday of each month for dinner and discussion.  The April meeting was held at Victoria's Restaurant in Appleton.
        The group's topics have included termination of employees, charities, succession planning, family counsels, finding outside directors, family meetings, division of stock, sibling rivalries, and codes of conduct.
        The May meeting will be at 5 p.m. on the 11th at the Pioneer Inn in Oshkosh.  The group encourages junior generation/successors to participate in the meetings.  To make a reservation for a successor meeting, contact Renee at 424-1541.
 
 

Board Members

        During the May 3 dinner program, we recognized retiring Board members - Jim Hayes and Jim Janes - and new individuals who are filling family business seats.
        We are happy to welcome Bill Bassett, Bassett Mechanical, and Jim Neumann, RB Royal Industries, as new family business Board members.
        Bill and Jim join continuing Board members - Bob  Engels, Al Hartman , Mickey Noone, John Peeters, Lori Phillippi, Lyle Reigel, Burk Tower, and Joe Verhagen.
 

Facilitation Training

        Program evaluations and discussions with members tell us that facilitators for small group discussions are helpful and appreciated.
        To ensure that we have enough trained facilitators to keep our discussion groups small, we will again provide facilitation training on August 26, 1999.
        Although only sponsor facilitators are used for program group discussions, this training program is open to both members and sponsors.  Members find that facilitation skills are valuable for their business needs.
        Details about the session will be made available in early August.
 

Responsibilities of Ownership

Fiduciary Duties of Majority Shareholders
- Reg Wydeven
McCarty, Curry, Wydeven, Peeters & Haak
        Family businesses are typically owned and operated by a small number of individuals, oftentimes exclusively by family members.  These families work hard to develop and promote their product or service, backed by their family name, in an effort to satisfy a need of their community while making a profit for themselves.  For liability and tax reasons, many of these families have incorporated, with the family members owning a majority, if not all, of the shares of their company.  In addition to worrying about the day-to-day operation of not only the business, but also the family, if one or more family members own a majority of their company's stock, they must also worry about their fiduciary duties to minority shareholders.
        If one or a few individuals own 50% or more of a company's stock, they are known as majority shareholders.  Majority shareholders have what is known as a 'controlling interest' in the company because they have the ability to control the board of directors, the body that essentially runs the business.  By definition, a controlling interest has the potential for abuse of company assets.  Because of this, majority shareholders owe a fiduciary duty to the corporation.  In other words, majority shareholders must put their personal interests aside and act in the best interests of the company.
        Minority shareholders may be younger generation family members or outside individuals.  Family members who are majority shareholders put minority shareholders in a very vulnerable position.  To protect minority shareholders' interests, the law has given them several tools to combat oppression, should it arise.  Examples of such oppression include paying excessive salaries or bonuses to select family members, unfairly transacting business with a family member, or by approving corporate loans to family members on terms that are not in the corporation's best interest.
        The first defense the minority shareholder may pursue is his or her right to inspect corporate records in order to keep abreast of company activity.  An inspection of the records may, in fact, reveal misconduct or misappropriation by the majority.  If so, the minority shareholder may file a derivative action.  A derivative action allows the minority shareholder to sue the wrongdoer on behalf of the corporation.  If the majority shareholder negligently or intentionally breached his or her fiduciary duty, he or she would be liable to the corporation for damages.
        If the fiduciary breach is very serious, a minority shareholder may also initiate a proceeding to have a court involuntarily dissolve the corporation.  The court may then approve the liquidation of the company or the sale of its assets, which would likely be devastating to the majority shareholders.
        There are many advantages associated with owning a family business, but those advantages come with responsibilities.  If a company has minority shareholders, the family member(s) with a controlling interest in the company owe a duty to the minority to act in the best interests of the company.  If the majority shareholder(s) breach this fiduciary duty, the protections afforded the minority shareholders may cost those with the controlling interest significant monetary damages, and possibly even the business itself.
 

Membership Drive

        Our Each One Bring One drive continues.
        Businesses that join now can participate in the summer successors peer group,  the August facilitation training, and request use of Forum resources.
        Membership fees for 1999-2000 will remain at the same levels -- $1,800 for businesses with annual sales of $5 million or more and $1,400 for those with less than $5 million in annual sales.   What a value!  As several members have commented, the Ward workshop alone was worth double the annual membership fee.
        As part of this recruitment effort, members will receive a "Thank You" gift.  For each new business that becomes a paid member by September 30, 1999, the referring member will have a choice of one of the following gifts donated by our sponsors:
    a half-day sporting clays and pheasant hunting at Hunter's Park near Brillion,
    a basket of wines,
    a business development course (non-credit),
    tickets to the UW Oshkosh theater, or
    seasons tickets to UW Oshkosh basketball or baseball.
        If you know a family business owner that would benefit from participation in the Forum, call Sue Schierstedt with the contact information.
 

Upcoming Programs

Date/Time                       Topic/Event                             Presenter        
August 26, 1999                Facilitation Training                  Dale Feinauer
Sept 1999                         Responsibilities of                     Sponsors
                                           Ownership
Nov 10, 1999                   Generational Perspectives         Paul Karofsky
Apr 11, 2000                    Workshop                               John L. Ward
May 2000                         Dinner Program                       TBA

        Two other programs are being planned for October and February.  As these become firm, we will provide them for your calendars.
 

Special Year 2000 Program Opportunity

        Creating and Preserving a Family Tradition - The European Experience, a family business workshop, Cervinia, Italy, March 11-19, 2000.  The workshop is being planned by, and for, members to provide an exceptional educational opportunity and international business experience.
        This workshop will be a collaborative effort between our Forum and the SDA Bocconi University in Milan, Italy.  It will focus on family business planning activities and will include presentations by our sponsors and  Italian family business owners and educators, tours of Italian family businesses, and time for family activities.
        This experience in family and business growth will be at an eclectic Italian ski resort at the foot of one of the most inspiring and famous mountains in Europe, The Matterhorn.  Optional activities may include skiing, shopping tours, and excursions.
        This workshop is open to Wisconsin Family Business Forum  members and sponsors only.  The fee for this workshop will be in addition to the annual fee.
        Those who want to participate will be asked to complete and submit an application form and deposit to reserve the appropriate number of places.  Details and application forms will be sent to all members and sponsors as soon as they are available.
 

Forum Directory

        The second edition of the directory will undoubtedly become an even more valuable resource.  This year, most members provided more information about their businesses and families.  You will also find e-mail addresses for many of the family members.
        The directory also includes information about our Board and committees and about our sponsors, including our new sponsors, First National Bank - Fox Valley and Grant Thornton LLP (effective July 1).
        Your new copy will be shipped to you early in May.  As we will only distribute one copy to each member, please be sure to put it in a conveniently located place so all Forum participants can access it.
 
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Vol. 2 No. 6 New Briefs
(c) 1999 Wisconsin Family Business Forum
Editor: Susan Schierstedt
(920) 424-2257
800 Algoma Blvd., Oshkosh, WI 54901 schierss@uwosh.edu
Website: www.uwosh.edu/wfbf/