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.
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.
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.
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.
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
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.
Our Each One Bring One
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
ð a half-day sporting clays and pheasant hunting
at Hunter's Park near Brillion,
ð a basket of wines,
ð a business development course (non-credit),
ð tickets to the UW Oshkosh theater, or
ð 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.
August 26, 1999
Nov 10, 1999
Apr 11, 2000
John L. Ward
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.
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.
Return to Home Page
University of Wisconsin Oshkosh home
Vol. 2 No. 6 New Briefs
(c) 1999 Wisconsin Family Business Forum
Editor: Susan Schierstedt
800 Algoma Blvd., Oshkosh, WI 54901 email@example.com