By: Gary Smith

As I shared in a previous blog, business continuity involves the company’s continued operation when something unexpected happens to the owner before the owner’s exit. The Business Continuity Board-Part I will provide valuable information before reading this blog. I’ve also noted three other blogs that will be helpful to every business owner as they evaluate their exit planning options.

Exit Planning – Process, Strategies, and Outcomes – Venn Law Group

The Two Exit Planning Killers: Time and Tax (Part 1) – Venn Law Group

The Two Exit Planning Killers: Time and Tax (Part 2) – Venn Law Group

In today’s blog, we’ll focus on what actions you should take once you’ve determined the members of the business continuity board.

Meeting Structure and Confidentiality

Ideally, this group should initially meet in person at least every two weeks, as you want to create and maintain momentum for this group.

Each member of the group will need to sign a confidentiality agreement.  This is important as you may be (and probably should be) discussing information about the company that shouldn’t become widely known.

You should also select a name for the group. This is part of the psychological incentive. The employee is not only a vice president but also a member of the XYZ Business Continuity Board.  *Never pass up the chance to make someone feel important.

Setting Expectations – Do’s and Don’ts

1. Discuss the purpose of the continuity board and how it will prepare each person for their prescribed role.
2. Confirm a regular meeting date and time. Once that is set, emphasize that everyone will commit to attending. *I think having the meeting at the beginning of the day is a good idea.
3. Decide how long meetings should last and stick to that time limit even if you stop mid-sentence.
4. Based on 1, 2, and 3 decide on a regular meeting agenda.

Don’t use this meeting to discuss issues not on the agenda. Any important issues not on the agenda should be addressed outside this meeting. This meeting is about how to run the business, not about dealing with day-to-day issues.

For example, a common problem businesses face can be with a job/employee/customer. This meeting could confirm who should handle that problem, i.e., who has the authority to deal with it, and whether they need help. This situation is relevant to continuity planning.

However, this meeting should not be used to resolve the problem.

You can also use this meeting to review how the problem was handled and how you need to handle these problems in the future (what do you start, stop, or continue doing).  However, you aren’t discussing how good or bad the resolution of the problem was in this meeting.

That’s a topic for outside this meeting.

A Sample Agenda

Here’s an example of a generic agenda.  Remember, the meeting is about developing, implementing, and changing the continuity plan for your emergency exit.

• One to two-minute break if needed to let everyone get focused on the meeting
• Review the status of action items from the prior meeting
• Review the information from your regular agenda (from the first meeting, as amended) to review at each meeting. For example, this could include:
  • Income Statement, Balance Sheet, and Cash Flow Statement (What are the key issues to watch for?)

1. • Budget vs. Actual Financial Statements

1. • Job descriptions changes and decision-making authority given to different positions;

Example: Should a project manager be responsible for doing X;  Who should evaluate X’s performance as a project manager;

This group would not evaluate the person unless you decided that this group should be responsible for assessing the person as part of the continuity planning.

• The next big things facing the Company and who’s in charge of them
• Discuss changes to what this group does if necessary
• Decide action items for the next meeting.

An Important Rule

Don’t cancel meetings.  It’s easy to keep canceling or miss them once you do that.  If there’s an emergency that can’t wait involving everyone in the group (or everyone other than one person), move the meeting to later that day or when that emergency is over if possible.  Don’t lose focus or momentum for this group.  (I believe the meeting should happen if there are two people available to meet.)

The Final Thought

Nothing lives in a vacuum.  This board and this planning can (and should) feed directly into your regular exit planning.  What this board does should also increase the value and stability of your business.  In addition, having this board should make your life a little less stressful.  That might lead to more time for other things.  Then that might lead to some happiness.  You get the picture.  It’s a good thing.

The experienced attorneys at Venn Law Group can help. We help our clients determine the best solution for themselves and their businesses by guiding and managing the process so that the owners can continue to focus on their day-to-day activities while moving through the transition. Contact us today.

Gary W. Smith has over 20 years of experience providing legal counsel and innovative solutions to business owners and management teams. His focus areas include mergers and acquisitions, succession and exit planning, securities and capital structures, business structures, and tax. He excels at navigating the legal complexities of diverse industries ranging from professional services and IT infrastructure to manufacturing and real estate.