Nuffield Scholar Peter Craven outlines 'the family charter' and how it can help your family business.
Linked to episode 2 of the show, this bonus episode features bonus material with Peter Craven, who appeared in episode 2 of the series.
In the episode Peter explains 'the family charter' .
Link to Peter Craven's Nuffield report - Peter Craven | Nuffield Farming Scholarships (nuffieldscholar.org)
Farming Focus is the podcast for farmers in the South West of England, but is relevant for farmers outside of the region or indeed anyone in the wider industry or who has an interest in food and farming.
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Timestamps
00:01 Cornish Mutual jingle
00:15 Peter Green introduces the bonus episode.
00:42 Peter Craven explains the benefits of the family charter.
01:30 How do you create a family charter?
03:40 The steps involved.
05:43 Who needs to be involved?
08:38 The issue of decision making breaking down.
10:00 Peter Green rounds up.
Cornish Mutual. Farming insurance experts.
Welcome to this bonus episode of Farming Focus, which is linked to episode two of the show. If you haven't already listened, why not head back to episode two to hear the full episode? This will make sure you'll get the most from this bonus. We're now going to hear from Nuffield scholar, Peter Craven, who describes the family charter, explains what it is and how it can help you and your family business manage succession moving forwards.
Peter, what's the family charter and what are the benefits of having one? Okay. Hi, Peter. Thank you for having me back again. So benefits of a family charter is really, it's like a roadmap for a family. Um, so it's kind of a, uh, something that helps them with the direction of where they're going. Um, I guess you could also say it's like a set of rules for family and business.
So rather than just running out onto the rugby field with no clear plan, no set of rules for how we're going to act with each other. So it sets some rules. But the number one thing that the family charter is really doing is it's helping with communication, which is something we're not brilliant at within farming.
And it helps with sort of open communication, but effective communication as well. So it's really, that's what it's building on. Right. Okay. And how do you create one for your family? What I realized is that when you've met one family business, you've, you've met one family business. Um, or when you've seen one family, you've seen one family.
You haven't seen them all. They're all different. They've all got different characters. They're all coming from different backgrounds, different landscapes. And so. This isn't really something you can just say, bang, there you go, do this and you'll all be happy. There are some principles, um, so where you've come from, um, certainly as newer generations come in and as people come into that family, they don't know much about it.
And so this could be your daughter or son marries, marries someone and now who are you? And so it explains actually grandpa's put blood, sweat and tears into this business. And this is where we started and humble beginnings and we've worked hard. And this is where we are. And some of this sort of background history part is really important to set the scene for a family and business.
So. Understanding those values and, and, and who we are is, is really important. So, um, how do you create one? You really think about, um, where you're going and what you want, but then what this is, it's really a way of trying to. Avoid all your problems. Um, so what are we going to fall out? So peter you and me all of a sudden we're brothers now Uh for this next 10 seconds and that's one confusing family two children called peter.
That's it. Who would do that? It's so silly, isn't it? So what are we going to fall out over then? Let's have a conversation before it gets a problem and this idea of this drip drip effect and we can manage the drips But suddenly one day one little the straw that broke the camel's back, um, it can be a tiny thing, but if we haven't dealt with our problems as we've gone along, bang, all of a sudden we've got this huge explosion over, uh, somebody going on holiday or something.
And suddenly it's like at the end of end of the world. Um, where did that come from? So to be clear, we're not trying to resolve. every potential issue in advance. We're simply trying to understand what sort of areas the issues might occur in and adding clarity around those areas. There's a lot of steps, if you like, or parts that people look at.
So roles and responsibilities and some clarity between roles and responsibilities and then accountability. Um, so not just, you've got that role, but actually what does that mean and how are you going to take that? And if we're going to create some space. for you, but actually now you've got to be responsible and, and, and report back to us.
So it's understanding how do we set that up and what does that look like? How are we going to spend our money? Um, we could all have different ideas. How are we going to make decisions? Do we vote? Uh, does one person who shouts the loudest get what they want? I mean, these things is simple things when you start to think about it, but let's say.
Let's say we've both got children or let's say, um, let's say you're a lot younger than me, Peter. Um, and your children aren't coming into the business yet. How do we deal with that? Are we going to let all the children in? Are we going to have this sort of employment policy that we talk about? And we say, well, actually we think we want people that have been in some kind of education, or we think they want to work outside the business for a couple of years before they come back.
So when they come into the business, they're welcomed by other members within the business and they've got some self worth. The other thing is these family charters, they're not set in stone. So I don't know if we said living documents, but there's something that it's not, Oh, there we go. Put it in the drawer, frame it, put it on the wall.
This is something families evolve, families change. And so must the charter. And so you must keep going back and saying, look, we've got little tweaks here. We need to keep looking at this. We need to work on this. We didn't have this problem before. You'll never be able to see all of this stuff coming at you, but it's just trying to be proactive so that when something does come up, you're able to deal with it together.
And you're able to already have basic conversations about getting along so that you can deal with the more tricky stuff when it happens. Who else needs to be involved in creating that family charter? Should you involve accountants, solicitors, et cetera? Yes, absolutely. You need professionals, but not straight away.
So this is really something that you've got to think about yourselves and think, what do we actually want? And so it's been described to me as sort of, this is four steps down the road of the how part, and there's lots of people that, that can then. Come in and do the how part, uh, and you could have an accountancy firm, maybe, or a solicitor firm could looking at the how, but they missing some of these crucial earlier steps, which is what do we actually want?
And it's much easier and, um, much cheaper if you can work out what you want in the first place, rather than just going, we don't know what we want. And then you're, you're like. Okay, it's a field day for people with services. Actually, you work out together as a family. Come together. What do we want? What are we trying to achieve?
Where are we going? How are we going to do that? You will be talking undoubtedly about shareholder agreements and, and shares in the business and how that's going to work. And if somebody wants to exit the business, I mean, somebody told me you shouldn't get into bed with somebody unless you know how you're going to get out of bed again with them.
So understanding that clearly from the start. Um, so all of that plays in and you do need input, get the professionals involved, but not right at the beginning of the process, really. Just, uh, yeah, just make a start yourselves and then involve them later on. I think that's what you're saying. So. To summarize, what would your three top tips be on creating a family charter?
So number one, I'd get as much information as you can, um, on understanding what it is and if you think it's relevant to you, um, because you could quite happily say we've got on fine with that out of this. Why do we suddenly need Peter Craven bringing this idea up? So understanding what it is and, uh, go and have a look at my, uh, YouTube clip of my Nuffield.
And if you can get a look at my report, you just get a bit more understanding. You need to start questioning what's going right on the farm, but also what's not going so well. And, and understanding, um, what you might need to do and how you might need to do that. There's a, there's a sort of a, an inward reflection, I guess.
And then this, this sort of bit that really the charter starts off with is. What do we want? Um, what are we actually wanting? Um, where are we trying to go? And understanding that, um, first for yourself. And I would say it took me two years to work that out. So it's not something that you just, it's just a, an overnight thing.
Um, this takes a lot of thinking about, and to have this conversation with a family, they don't always know what they want. Um, and so it's not easy. So there are probably three things, whether I've helped, uh, answer the question, I mean, the problem really. It's decision making, um, in a, in a business and it's, and that's what really gets, um, knocked, um, because the communication stops and then the decision making stops and when an opportunity comes along, you're unable to grab it because you can't make those decisions together.
And so the family charters really. It's sort of bringing everybody together on one page. Um, it's adding transparency. Um, the communication is, is being, is building. Um, but it's this decision making and the trust that it creates so that when those opportunities drop out of the sky, and they do drop out of the sky, you're in a position.
That you can grab them when, when, when they arrive and you're able to make those clear decisions because you're able to communicate. That's really where the magic starts. And it's all sounds a bit wishy washy and vague, but it's, it helps you make decisions as a family better. But I think that's something which we don't always do in agriculture.
We get quite focused on output and yield and how much and the technical side of things, but actually that softer side of things is something which we're really trying to bring a focus on throughout these podcasts. So thank you, Peter, for all of your wisdom and your insights and your time and your thoughts.
They've just been incredibly helpful. Um, so thank you very much for coming on, uh, farming focus. It's been a pleasure. Cornish Mutual Farming Insurance Experts