A great board meeting can occur thanks to preparation, people and a plan. For ethanol plants, it is fairly typical to have board meetings, but they vary in function and value at each facility.
Our involvement in board meetings over the year has given insight into what makes them successful. The number one benefit of board meetings comes from maintaining open lines of communication among the directors and plant management.
Whether meetings are held monthly or quarterly, they work best when they are consistent and well-planned. Some plants hold a quarterly meeting of an executive committee and a meeting of the entire board during the other months. Regardless of the timing of the board meetings, agendas that are well-thought-out and meetings that are well-facilitated produce the best results in terms of engagement and decision making. Agendas should not be cookie-cutter but rather creative and even challenging.
When building agendas, it is best to survey directors on the kinds of information they want communicated in board meetings. Here are key elements for bringing value to ownership boards:
&bull; Reports. Expectations for reports from the management team should be clear, and typically include plant performance, grain movements and grind, and the status of grain,&nbsp; chemical and enzyme costs.
&bull; Communication. Managers vary in their communication styles, but it is never helpful to withhold information and leave directors guessing or questioning the management of the plant. Boards can cultivate closer communication with managers by clarifying expectations and by being professional and proactive in the way they relate with each other and management.
&bull; Financials. Board meetings would not exist without some review of financial information. It can be a challenge, however, to provide enough insight, yet not too much. It could be valuable to rotate various aspects of financial reporting among different board meetings. At times, going through the financials can be helpful and educational, including line-item analysis such as repair costs or labor costs including all benefits. It can also be helpful to have a much more concise summary&mdash;perhaps a one-page CliffsNotes version of plant performance.
&bull; Consultants. Some boards require in-person reports from consultants. These commonly include assessments of new technology or advancements, but can also include presentations about accounting issues, risk management or debt financing.
&bull; Customer Service. Boards need to be brought up to speed in the area of customer care, including complaints or commendations and customer adjustments.
&bull; Capital Budgeting. Capital investments are monitored and guided by the board and approval is made on a project-by-project basis or above a certain cost threshold.
&bull; Policies and Procedures. This isn&rsquo;t an exhilarating area and doesn&rsquo;t belong regularly on the agenda, but boards need to establish and review company policies and procedures. These include aspects of plant management, as well as the function of the office and staff, controls in office management, etc.
&bull; Strategic Planning. It is especially important that the company is managed in the present according to future thinking, and much of this responsibility lies with the board. This includes growth strategies, diversification opportunities or significant changes in management tactics, including grain procurement, ethanol and distillers marketing or risk management.
Good facilitation, informed decision-making and solid record-keeping are important aspects of board management that make the process valuable. Whether the facilitator is the board chairman, manager or a staff person, the important thing is that they have the support of the board and can pull together an effective agenda, draw out positive discussion from all participants and bring issues to successful resolution. We recommend board members go in to their next meetings prepared and enthusiastic about the process. This makes you and your board more effective and, ultimately, gets the job done.
Author: Donna Funk, CPA Kennedy and Coe LLC (800) 303-3241 funk@kcoe.com

Get Onboard: Tips to Meeting Success

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Upcoming Events

2024 International Biomass Conference & Expo

2024 International Fuel Ethanol Workshop & Expo

Biodiesel Summit: Sustainable Aviation Fuel & Renewable Diesel

Carbon Capture & Storage Summit

North American SAF Conference & Expo

Get Onboard: Tips to Meeting Success