This project focuses on families who own large tracts of forestland in the United States and manage them for economic return. This segment of forest owners has been further refined to those families who have been operating their family business for multiple generations. Specifically, this project seeks to understand the intersection of the family, business and forestry characteristics of these firms with the objective of sharing best practices and opportunities for the future.
Forty-three families participated in the project. They hailed from forested regions in the west, north and south and were further segmented into four acreage classes. The responding family firms had a median of 98 years in business and four and a half generations of ownership. Over three quarters of family firms intend to continue to own and manage their forestland “for many generations to come”. They have shown resilience and adaptability, changing industry sectors when necessary and making changes to their management structure and composition as required by business conditions or size and complexity of the enterprise.
The forestland was important economically and environmentally to these families and represented a median of 75% of their assets and business revenue. While the primary forest management objective was for timber/fiber production, they viewed the land as a link to prior generations and were committed to preserving their land for future generations. Most families had conducted conservation actions on their land, and three quarters had their forestlands third party certified for sustainable forest management.
The vast majority of these firms employed family members in the business and had done so for almost every generation. Most families were still relatively small, with a median of 25 members, 15 of whom were shareholders. Communication was fairly informal, often limited to the annual report and between individuals. Stock ownership was restricted to family members for over 80% of the firms. A majority had shareholder agreements and stock buyback provisions.
Although not universal, there appeared to be differences between those that owned less than 100,000 acres and those who owned more. To start with, those with more acreage had owned their land an average of 20% longer. Accordingly, they had more generations with more descendants and shareholders. They also had higher percentage of non-family shareholders, non-family managers and board members. The larger firms were more formal in their family relations as well, being more likely than smaller firms to have family councils, family employment and succession policies and specific programs to engage the next generation.
While many firms employed the services of family business advisors, use of the advice seemed to be mixed. A minority of all firms, including large landowning ones, had policies or formalized practices in family employment, succession planning, share redemption, engagement of the next generation and communication. As these families continue to grow in generations and members, it will be important for them to bolster their family processes as they have their businesses. They have shown the foresight, planning and patience necessary to manage their forestlands sustainably for multiple generations, however it is often family sustainability that is hardest to achieve.