Several members of the family have influenced the evolution of our corporate governance and created policies and protocols that have made our decisions more objective.
Arrocera la Esmeralda S.A.S has reached an important milestone in its history, celebrating 70 years of sustainable rice production and distribution throughout Colombia. Today, the company retails a wide variety of rice products under its legacy brand Arroz Blanquita, as a tribute to Mrs. Blanquita Cárdenas, the mother of the founder of the family’s business.
Learning from experience
As in many family businesses, the current CEO, José Manuel Suso Dominguez, was exposed to the business at an early age, working in the company during the summers.
“When I had to choose a career,” he says, “I was guided by my father and by the passion I already had for the company. I used to do a bit of everything and I was always making observations and finding opportunities for improvements. My father could see that those were important contributions.”
This informal learning throughout the summers advanced the development of José Manuel’s understanding of the family’s values and traditions. It also gave him the opportunity to apply his creativity in developing innovative solutions to the company’s operations.
He notes that when he and his siblings were graduating from university in the 1980s and 1990s, they brought with them a new generational mindset that reflected the importance of implementing total quality management, just-in-time production and continuous improvement – all of which were garnering widespread attention at the time, but not widespread adoption.
The second-generation vision
The original business approach had been cautious and operated under two key principles: paying the maximum price to the farmer and selling at the minimum price to the consumer. This small-margin approach meant that many operations, including inventory management, were conducted in-house and often by hand. While the principles behind the strategy were admirable and benefitted farmers as well as customers, it wasn’t optimal for the company’s growth.
With José Manuel’s arrival, a modernized vision for the future was introduced – one that would promote agro-industrial innovation in an efficient and sustainable way, supported by fair trade and a respectful commitment to equality and diversity.
Good governance 101: Purpose, values and vision
The family’s values and core purpose to ‘grow and provide healthy food for life’ did not waver with their ambitious vision. Since the 1980s, the company has been striving to educate farmers and help them transform their farming operations to be more competitive. The family’s values are embedded in the values of the business and among the associates who support the progress of its operations.
The vision for the company has continued to evolve across the generations. When the company was founded, the first generation was not familiar with quality-control processes. In contrast, the second generation began to project the company toward total quality control in order to streamline its processes and deliver high-quality products, staying true to the family’s core values and purpose.
As its second-generation leader, José Manuel has advanced the company to become a leader in its sector, not only for implementing advanced technology and quality mechanisms, but also for the international recognition it has received, including ISO 9000 and ISO 14000 certifications.
What is the protocol for choosing the next leader?
To sustain the company’s momentum, the question of who could lead the business into its next phase became increasingly important.
Arrocera La Esmeralda SAS has had only one succession event when the leadership of the company was transferred from the founder to his first-born son, José Manuel. He had been preparing for this leadership role for most of his life by working in different areas of the company from a young age.
No protocol was adopted in this first succession process. For the next generation of leadership, however, the family has implemented a family protocol for selecting successors and other family members who want to work in the business. There are specific written conditions that must be met, including a requirement for potential successors to complete a formal education while also spending time in the company to manage their own projects and learn the operations of every area of the business.
Family members have strictly accepted the protocol and resisted hiring any family members until the protocol procedures have been well-established and communicated. An additional family governance tool has also been developed to support the protocol with the formation of a family council. The family council mechanism is being used to approve the hiring of all new employees and the council’s hiring decisions must be unanimous. If two candidates with equal qualifications are presented and one candidate is a member of the family, the family council is expected to select that family member for the role.
Keeping the company in good family hands
The Arrocera la Esmeralda family protocol has also been designed to protect the family’s assets by ensuring that the ownership of the company remains in the family’s hands.
As well, one of the practices that has been maintained is to permanently involve family members in the work of the company, especially for those who are perceived to be potential candidates for succession. This practice has served a dual purpose as protection in the event that a manager is unable to perform a role, while also allowing the family to closely study the performance and skills of potential successors and ensure that the leadership of the company will continue to be in the best possible hands.