PHILADELPHIA--(BUSINESS WIRE)--Seven private company boards were honored for their business governance excellence at the 2021 Private Company Governance Summit June 9-11, live online. A replay of the awards presentation is available here: https://vimeo.com/561269813
The boards of these companies were selected for recognition:
- Environmental Systems Design
- Commerce State Bank
- Daily Gazette of Schenectady
- Larsen Design Group Inc.
- King Ranch
- Ulteig Engineers Inc.
- C.G. Schmidt
Seven private companies were honored for governance excellence demonstrated by their fiduciary or advisory boards. The awards — presented at the online 2021 Private Company Governance Summit on June 9, honor private company boards that best serve their stakeholders — owners, shareholders, employees and community — with best practices in their structure and performance.
The awards were created to recognize private companies that go above and beyond legal governance requirements and commit to the highest levels of governance, whether through fiduciary or advisory boards. The awards honor the performance of the board as a whole.
The sixth annual awards recognize fiduciary boards (those tasked with protecting shareholders, with the authority to vote on decisions that are binding for company management) as well as advisory boards (more informal boards that have no binding regulations, but often a significant strategic role). Fiduciary board awards were broken down by company revenues and ownership type.
The Private Company Governance Summit — now in its ninth year, is the only national conference focused on the unique governance challenges for owners, shareholders, directors and advisory board members of closely held, family-owned and private equity-owned companies. To learn more, visit www.privatecompanydirector.com.
Dozens of private boards of directors were nominated for the 2021 Private Boards of the Year award, but seven stood out for their diligence, standards and outcomes.
The boards of these companies were selected for recognition:
Environmental Systems Design
Type of Private Board: Advisory
Approximate Annual Company Revenues: Under $100 million
Company Ownership: Family-owned
Governance highlights include:
- Best practices taken from public boards: executive session preceding each quarterly board meeting, continual refreshment of board advisors to be certain that it is composed of individuals that have experience in the issues affecting the future of the company, board members act as much as possible like a public board.
- 5-member advisory board is diverse and includes just one family member (Raj Gupta, the executive chair).
- The board focuses on strategic issues and selecting advisors with specific skill sets to help management. Meeting time shifted from management doing most of the talking to the advisors doing the majority of the talking and management listening.
- Board has advised management on issues including strategic planning, risk management, organizational design to show employees they have a path for growth and development within the firm, which areas of growth to invest in, DEI, COVID pandemic response.
Commerce State Bank
Type of Private Board: Fiduciary
Approximate Annual Company Revenues: Under $100 million
Company Ownership: Closely Held
Governance highlights include:
- A majority independent board with nine outside directors, four inside (including three founders).
- The bank was able to pivot in the face of COVID-19 to work-from-home arrangements and, most impressively, to drive-thru mortgage closings.
- When an acquisition was canceled because of the financial impact of COVID-19, the board played a role in retaining employees who were preparing to leave when the acquisition was to be completed.
- The board works hard to know and understand their customers. Board meetings include reviewing overdrafts and past-due loans.
Daily Gazette of Schenectady
Type of Private Board: Fiduciary
Approximate Annual Company Revenues: Under $100 million
Company Ownership: Family-owned
Governance highlights include:
- The board has helped this 126-year-old company stabilize the core business and diversify the revenue stream. The company is transforming itself into a holding company with the newspaper at the center. All initiatives must produce cash flow to maintain the infrastructure to serve the main purpose of keeping the community informed.
- The publisher/president and his team send a written report one week before each meeting. Board members review the material and send their comments/questions three days in advance, and the team responds the day before the meeting. That keeps the actual meeting time focused on strategic discussions.
- The family started an advisory board in 2012 and changed to a fiduciary board in 2015. Both iterations of the board “trained up” the family members, who did not have governance backgrounds.
- Committees: Governance Plus (the “plus” refers to business succession), Finance/Audit, Risk/Cyber/Safety, Business Investment and Diversification.
Larsen Design Group Inc.
Type of Private Board: Fiduciary
Approximate Annual Company Revenues: Under $100 million
Company Ownership: Employee-owned
Governance highlights include:
- Committees including Nominating and Governance, Audit and Risk, Compensation and Talent, and Innovation. Each committee is chaired by a different external director.
- An independent Transition Committee of the board, consisting of the four independent directors, guided LDG through its transition from a 60% ESOP to a 100% ESOP in 2020 and selected the third CEO in the company’s history.
- The board also helped with the development of a three-year strategic plan and two new office locations nationally in 2020 and 2021, with an additional location planned for 2021. Growth has been aggressively pursued.
- The external directors are adding value in development of a strategic plan that allows the company to grow and create value for employee-owners (debt, cash flow, investments).
King Ranch
Type of Private Board: Fiduciary
Approximate Annual Company Revenues: $100 million-$350 million
Company Ownership: Family-owned
Governance highlights include:
- Detailed process for selecting family members for board service, beginning with board observer roles, then submission of a resume, statement of why they wish to join the board, an oral statement and a four-hour interview, with an outside third party assisting. Succession of family members on the board has been developed with age limits implemented for older board members and 10-year term limits implemented for new family board members.
- There are three chartered committees.
- The chair (family) and CEO (currently non-family) roles are split and have been for many years.
- The board has professionalized its auditing and accounting systems and reports to the family with the sane integrity as a public company.
Ulteig Engineers Inc.
Type of Private Board: Fiduciary
Approximate Annual Company Revenues: $100 million-$350 million
Company Ownership: Employee-owned
Governance highlights include:
- Six-member board today: five independent directors plus CEO. Two of five independent directors are women, including the chair.
- Best practices taken from public boards: a first-ever corporate sustainability report, a targeted DEI initiative, quarterly board meetings with separate executive session, board agendas focused on strategy and global issues rather than operational updates, focus on ESG, board members serve set terms, allowing for ongoing board refresh.
- Each independent board member serves on either the audit, governance and nominating, or management development and compensation committee. (Some members of management team are also on committees.)
- All board members also participate in the ESOP communications and administration committee. Committees do a lot of detail work, saving board meetings for more strategic topics.
C.G. Schmidt
Type of Private Board: Fiduciary
Approximate Annual Company Revenues: $350 million-$1 billion
Company Ownership: Family-owned
Governance highlights include:
- Board is made up of six independent board members and one family member (the chairman) and includes three women and one director of color.
- The board includes individuals from a wide variety of backgrounds and experiences, including accounting, engineering, higher education, community service, philanthropy, real estate development and health care.
- The board has established term limits for board members and their continued service is determined on the basis of their performance on the board. The chairman considers the performance of each member prior to their term renewal.
- Board is a leader in local involvement, supporting the company in community philanthropy.
About MLR Media
MLR Media publishes Directors & Boards, Family Business and Private Company Director magazines, and produces the Private Company Governance Summit; the Transitions (Spring and Fall) and Family Business Legacy & Wealth conferences; The NextGen Summit and the Transformational Women in Family Business and Character of the Corporation forums.
