Engaging 7 | Via Skype Part I
Engaging 7 | Via Skype Part I
Martha Owen Jones, Tuesday
I figured the next challenge we would face as owners would be dealing with some sort of response from Dan Sumner—I certainly didn’t expect it to come from Christopher. He sent us all a formal email asking for a meeting of the Owen Products Owners Council to discuss a redemption request. That certainly woke us all up. Owen Products is finally almost finished paying off the debt we took on from redeeming the stock that was held in Alfred’s Trust, and Mike had mentioned that he would be submitting a proposal to the board for a capital investment to improve two of the kilns in the Western plant. The Owners Council has also discussed the need to increase the dividend. That’s certainly important to me because we’ve got Jameson’s college tuition bills to pay and Ryan didn’t get much of a bonus last year. We were just beginning to see a light at the end of the financial tunnel and now this happens. Where the heck does Christopher think we can get the cash to redeem his stock? Ryan asked me why I was so uptight yesterday—not that I could tell him.
Mike Owen, Tuesday
I’m so angry, I can’t see straight! Christopher deliberately sideswiped us with this redemption request. Didn’t he plan for these kinds of situations? Why did he come to us instead of someone else? He’s got all those important investors. So, one of them dropped out unexpectedly—why does that mean we’re expected to make up the shortfall? It’s not like we’re rich. One quarter of the value of the company? After we already redeemed Alfred’s trust? That would be cutting muscle, not fat. Heck, that would be cutting limbs. Why didn’t Christopher bring this up when we were talking to Dan Sumner? This is absolutely ridiculous, and I’ll let him know it—in no uncertain terms.
Amanda Owen Cooper, Thursday
Just finished the Owners Council meeting. It was a complete disaster at the beginning. We did it via Skype—honestly, there was no way we were going to pay for everyone to fly out, after we just incurred all the expense for the special meetings related to the Sumner offer. As chair of the Owners Council, the best I could do was just try to keep order. Martha acted like the bossy big sister and kept scolding Christopher for not planning better. She was leaning into her computer—her face was huge—and shouting. Mike’s passive-aggressive streak came out and he piled on, accusing Christopher of not caring about Owen Products and trying to destroy the company, saying that Dad would be apoplectic, and adding that now he would have to tell all the employees that there would be no holiday bonus and no raises. Mike was pacing around, so sometimes we could see him and sometimes we could just hear him yelling. Christopher stayed pretty calm but he got defensive and said that he never would have stayed on as an owner after Dad’s death if he had known we would treat him this way. I was banging the gavel on my desk in front of my computer and trying to get everyone to be quiet (while also trying not to get sucked into the argument).
Finally, I just leaned forward into the computer, banged the gavel as hard as I could, and told everyone to sit down and be quiet. I asked Mike to sit down and stay put so that we could see and hear him properly. Then I reminded them that we hadn’t even formally started the meeting or heard Christopher’s request, and so we were jumping to conclusions.
First, I asked Mike to read our Code of Conduct. He sounded a bit sheepish when he read item 1: “Speak respectfully and honestly.” And he nodded when he read the final item: “Forums speak with one voice.”
Then I made an introduction to the meeting. I practiced it in the mirror this morning, to be sure I could make the points clearly. It wasn’t easy for me, because as a lawyer I’m more used to being an advocate—acting on behalf of my client—than as chair.
“As owners, we owe each other the courtesy of listening to requests made by our fellow owners. As chair, I propose that we proceed with this matter as follows:
“First, we need to make sure we understand Christopher’s request completely. Christopher, we will ask you to read your request.
“Second, we will allow clarifying questions. We’ve already seen that there’s a great deal of emotion around this subject, but not much enlightenment, so each of us will have the chance to ask questions, but not engage in discussion or debate—yet.
“Third, as owners, we are obliged to evaluate Christopher’s request in the context of our governing documents, agreements, and policies. What do our key documents and policies say about this request? We will need to look at them. We also need to understand the financial implications of Christopher’s request, which may require obtaining additional information from the company. Mike and Martha, the three of us will come to consensus on what information we need to evaluate the request.
“Fourth, we need to agree about the threshold for making this decision, if our governing documents don’t specify it. Will we require consensus, or majority? We will also need to confirm whether Christopher has a vote or not.
“I move that these four steps are the preconditions for discussion. There is so much at stake for us in this request—as a family as well as owners. We owe it to ourselves, to each other, and to our entire family to be respectful, thoughtful, open-minded, and fully-informed before we jump into debate.”
Everyone was silent for a moment, and I worried I had lost them. Then Mike said, “I second your motion.” Martha said, “I agree.” Christopher nodded.
So we began.
To learn more about the importance of an Owners Council, check out “Why You Need an Owners Council” in our Family Business Basics series.
Family Business Governance Analysis:
- Part I of “Via Skype” shows the Owens in a pretty negative light, at the same time as it shows the positive value of all the work they’ve done to organize themselves as owners of Owen Products, Ltd.
- By way of background, Christopher, the youngest sibling and the founder of CombuSynth (a tech startup focused on harnessing nano-scale combustion synthesis techniques for use in solar panels), recently had a key investor drop out just as bills came due for new equipment CombuSynth purchased to scale up their operation. Christopher reluctantly chose to approach his siblings and fellow owners about having Owen Products, Ltd. redeem his shares.
- It’s clear from the responses—Martha’s and Mike’s especially—that Christopher’s request hit an uncomfortable nerve. Martha scolds Christopher for not planning, and Mike blows up, saying that Christopher is trying to take down Owen Products. We’re used to seeing the Owens speaking and acting in fairly measured ways—being mindful and respectful of their different hats as owners and siblings. Not here!
- One of the things that I’ve noticed in family groups who face a stressful situation is playing out here—sibling-owners, when angry and upset, tend to revert to acting as they did when they were children growing up together, in birth order rank. Christopher is the youngest of the Owen siblings, and you can see both Martha and Mike demonstrate an attitude of “you’re so irresponsible” and “you must not have planned ahead.” These are expressions that you might well have heard in the Owen household when, say, Christopher forgot his homework and Martha or Mike had to drop it off at school for him. In their frustration—and their concern about the company’s financial position and their own—they seem to disregard all that Christopher has done as an adult to build his business and develop his investor base, and instead treat him as they did when he was a child.
- To their credit, the Owens have come together via Skype to discuss Christopher’s request in a special meeting of the owners council, rather than calling each other to vent and triangulate their anxiety (to see triangulation in action, check out Episode 6 of Disengaging, where Matthew attempts to deal with his mother’s frustration and anger by calling his uncle Peter and his father). Amanda, who chairs the owners council, stays out of the sibling bickering and blame-laying, and instead opens the meeting by reminding them of several important things, laying her recommendations out in a motion:
- First: that they need to understand the issue completely before discussing—or venting—so they need to hear Christopher’s request.
- Second: that before they can discuss and debate the merits or issues raised, they need to be able to ask clarifying questions, again, to be sure they understand the issue and the request.
- Third: that Christopher’s request occurs within the broader framework of the governance of Owen Products. There are governing documents, agreements and policies that apply in this situation. Before jumping to any sort of conclusion, it is critical for the Owen siblings, as owners, to re-familiarize themselves with these.
- Fourth: that they need to agree on the threshold for making this decision, if it’s not spelled out in the corporate documents, agreements and policies.
- Amanda is worried that her siblings’ frustration and worry is going to overwhelm their commitment to being engaged owners, but in the end, engaged ownership prevails. The Owens agree to Amanda’s procedural motion.
Before we go, one last point. This was a meeting that would have been better had it been conducted in person rather than over Skype. Amanda comments that the cost of flying everyone to a common place was too high, after all that was spent on special meetings in connection with Dan Sumner’s offer to purchase Owen Products. Furthermore, everyone is busy with their lives and professional responsibilities. But Amanda, as chair, probably wishes they had done this meeting in person. It is easy to misinterpret emotions when you’re seeing them on video—especially when participants are pacing around or yelling into the screen. For a topic as important and potentially fraught as this one, an in-person meeting likely would have gone better and done less damage to family relationships.