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May 2014

Leaders and Relationships

Rowena (Ro) Crosbie is the president of Tero International Inc.

Do you miss Canada? The answer is the same today as it was when I immigrated to the United States more than 20 years ago. I miss the people.

This is probably the same answer you provide when asked if you miss your hometown. Your previous job. Your college days.  Leadership_shake hands

Relationships matter. Whether at work or at home, it is the quality of our relationships that shapes our lives – for better or for worse. Our personal experience testifies to the importance of relationships and independent research confirms it. Harvard University, Carnegie Foundation and Stanford Research Institute all showed that 85% of professional success is related to people skills.

Here are five leadership activities to help improve your relationships this week.

  1. Look up from your computer when interacting with someone. Many of us are so preoccupied with email that we fail to honor the human interaction in front of us.
  2. Turn your smartphone off when meeting or dining with someone.
  3. Make eye contact and smile when you greet others. 
  4. Write five thank you notes in the next five days.
  5. Provide others with tips on how to effectively interact with you. 

Relationships are a practical matter for leaders. While many people join organizations because of inspiring missions, great benefit packages and world-class training opportunities, research reveals that they stay for one reason – their relationships. 

The bottom line: People don’t leave organizations, they leave relationships. One of the most important relationships people have at work is the one with their direct supervisor.

Tending to your product garden

Kelly Sharp is the owner of Heart of Iowa Market Place

When it comes to everyday business decisions, I always do my best to avoid jargon and keep things simple.

Every now and then, though, a term is so important that there's no getting around it. And, "product life cycle" is one of those terms.

A product life cycle is a great way to map the lifespan of every product in your business. I like to think of the cycle like a garden, which flourishes when given the right combination of seeding, nourishment, time and care.

The same is true for products. (For the record, the formal stages of a product life cycle are: introduction, growth, maturity and decline.)

At my business, the Heart of Iowa Market Place, I sometimes have an easier task with the seeding or introduction because we have a very specific niche that is "all things Iowa."

The introduction stage is the most important step in the process. It requires some real thought and even market research in the form of asking your customers what they think to make sure that you're putting the right products on your shelves.

Once a product has taken root, it's time for it to grow. You do that through proper product placement, consistent marketing and -- my favorite -- a smart sampling strategy. When you get the growth process right, a product achieves its next level -- maturity. A product reaches maturity when it becomes a customer favorite and generates strong margins.

The final stage -- decline -- is one that isn't necessarily inevitable. However, there's not a retailer anywhere who hasn't had a product that, for one reason or another, just fails to take root and blossom. I treat products like that just like I would treat a weed in the garden; I get rid of it as fast as I can. I may do it through sampling or discounting or I may even donate it to a worthy charity, but I get rid of it as fast as I can so I can start the product life cycle all over again with something that holds a higher promise of stronger returns.

Think of your product line as a garden and you, too, can keep sales and profits growing strong all year round.

Summertime and the Livin is Easy

Ella Fitzgerald sang George Gershwin’s hit “Summertime” from Porgy and Bess and you could just sense the heavy heat of summer.  This summer take a few steps to beat the heat of summer and be more sustainable.

Summertime 1My office mini blinds stay in one position pretty much year round.  Now that summer is here adjust blinds so more of the summer sun is reflected outward to save on air conditioning.  It’s great to have the winter sun warm up a space but not the summer sun.  I just climbed up on my credenza and closed down the blinds.

Turn off your lights during peak times of the day.  My window faces south so I get plenty of mid-day sun.  I turn off my lights when the sun shines brightly.  Right now I am typing this blog with the lights off (some would say I am in the dark most of the time) which saves electricity and reduces air conditioning because of the heat that lights emit.

Summertime 2Turn up the thermostat a few degrees to save energy.  I am surprised when I tour buildings the amount of people who have sweaters on or heaters running during the summer.  Tell the guy with the thermostat in his office wearing a sport coat all day to take the coat off and turn up the thermostat.

Send your thoughts to rsmith@smithmetzger.com

Selling Your Business: For Sale by Owner?

 

The fact is when you decide to sell your business you must enlist other professionals. It will be expensive, but the investment you make will lead to a greater payoff. Consider the following when you think you can do it yourself:

·      Confidentiality: This is your number one concern.  You cannot put up a For Sale   sign.  You will need to screen and pre-qualify the buyers while controlling the confidentiality requirements and managing your business.

·         Emotions: When it comes to your little slice of the American pie, you’re bound to be emotional.

·         Judgment: There is no way you can view your business objectively, it is too much of you and you either under price or overprice it.

·         Time: Do you have enough time to run your business and sell it at the same time?  It will typically take one year and will eat-up much of your “free” time.

·         Special Knowledge, Skill and Experience:  Your skills are in running a business not in selling a business.

·         Adversarial Relationships:  You want more and the buyer wants to pay less. And-after the sale you will have to work the buyer.   Your representative needs to be the go-between and keep the deal moving forward.

All business owners have a dislike of paying professional fees. You will reluctantly engage their services only when it is absolutely critical. For most owners, the sale of their business will determine their future lifestyle.  You will need to have a team made up of a: Business Intermediary (the deal maker), an Attorney (legal protection) and your CPA (tax avoidance).

Remember: “The person who represents himself has a fool for a client”.

Good Selling!

 

Steve Sink, CBI, M&AMI

ss@phxaffiliates.com

So what the heck is Snapchat?

Katie Stocking is the owner of Happy Medium LLC.

There’s been a lot of buzz this past year over Snapchat, but what is it about this app that has everyone talking?

Snapchat is a photo-sharing app with a unique twist: the photos you send disappear. Once a “snap” (photo) is opened, it will disappear within seconds and is deleted from the company’s servers. Users can no longer access the images after they have disappeared.

Once downloaded, you can use the app to send out pictures to as many friends as you like. Some special features include the ability to draw on your photos, caption your photos and set how long - between one and 10 seconds - the image will be visible to those receiving it. You can also view when your snaps were opening by the receiver. Snapchat also added a few new features recently, including the ability to text inside the app, where messages will disappear once you leave the conversation. A new video call feature was also recently added.

When you receive a snap, you simply press and hold your thumb on the image to keep looking at it until the designated time runs out. While there is no public timeline, there is the ability to add photos or videos to your “story” which can be viewed by all of your contacts.

Basically, Snapchat is a light-hearted, visual way to have a conversation. The “disappearing” aspect and spontaneous nature of the app are what makes it different and more appealing to a younger generation than texting. With no signs of slowing down, it will be interesting to see how Snapchat grows in the future and how it will continue to change the way we communicate with each other.  

Is advertising becoming just a punchline?

Screenshot 2014-05-21 22.48.28Drew McLellan is the Top Dog at McLellan Marketing Group

JDate, the Jewish dating service, has a new ad campaign running and they launched it with billboards in Tme Square.  

The headline reads "Find Mr. Right to Left" as the company shifts its messaging away from "someone else's romantic success stories" to more of a "me right now" vibe that's aimed at millennials.

The next two ads in the series will feature headlines like "Because Dating Shouldn't Be as Hard As Parting the Red Sea" and "Matzah Ball Recipes Don’t Survive on Their Own."

What most people will find interesting about this campaign is that JDate didn't hire an agency to create this campaign -- they crowdsourced the lines. At this point in time, I find the crowdsourcing angle to be old news -- seems like half the SuperBowl ads were crowdsourced over the past couple years.

Here's what has my attention and concern. Good, effective advertising used to be well crafted from a strategy that made sense in every medium and to each of your key target audiences. But as our attention spans shorten and companies like JDate take short cuts to creating their campaigns -- everything is reduced to a funny bit or clever punchline.

In some ways, that works for the bigger consumer products. We don't really have to be told how they work or why they're useful -- we know what beer does ("Bud" "Weiser" frogs). We get what a Wendy's hamburger is for (Where's the beef?"). And no one has to think too hard to figure out why someone would go on JDate's website.

But for most businesses -- that method does not work. You're not a household name and what you sell isn't as obvious as beer, burgers or insurance. Your marketing needs to be built around a strategically sound plan that moves a prospect through the necessary steps of the know • like • trust = sales model that we've talked about before.

You can't rely on a funny line or sight gag to actually get someone to want to learn more or to wonder if they need what you sell. 

Don't get fooled by all these punchline ads all around you. You're going to actually have to do the hard work of understanding your customers and why they would be interested in what you have to say.

Drew McLellan is the Top Dog at McLellan Marketing Group

5 Things to get more out of LinkedIn now

Danny Beyer is a sales executive at Kabel Business Services. He is a serial networker and often speaks about networking tips to groups in the community.

LinkedIn is one of the most useful networking tools currently available as a “social media” platform. It allows user to connect professionally, share great content, and generate business. Unfortunately, it is also very underutilized. I’ve given several talks to students and professionals about the power of social media. It seems like most people have Facebook and Twitter figured out but LinkedIn is a different story. Here are five quick tips anyone can do to start seeing real value from their LinkedIn profile.

  1. Make sure the email address associated with the account is up to date: LinkedIn uses that email address to communicate when new messages are received, when connection requests have been sent, and when group conversations are happening. There will be no communication if the email address on record is from an old job or an AOL account that doesn’t get attention anymore.
  2. Use the “Recommended for You” section of the profile editor to add valuable content to your profile: The recommended for you piece is a wizard that forces users to enter information that will complete their profile. It covers things like education, work experience, non-profit volunteering, certifications, special projects, and more. Remember, the more information you provide on your LinkedIn profile the easier it is for others to find you and your services.
  3. Find great content on Pulse: Pulse is LinkedIn’s news and headlines channel. It allows users to customize the news the want to see based on hobbies, professions, and interests. The content and articles that are available through Pulse are from industry leaders. It’s a free way to keep up on current trends both professionally and personally.
  4. Use the “inshare” button to share content outside of Linkedin to your page:  The inshare button is the same things as the “like” button or “share” button for Facebook. When you read an interesting article share it to your LinkedIn page by simply clicking the inshare button. By sharing great content you provide valuable resources to your network and position yourself as an expert in the industry. 
  5. Connect with weak or lost connections with the messaging service: LinkedIn provides a fantastic messaging service that people feel compelled to respond to. I have had a 100% success rate when using the messaging service through LinkedIn. It has more clout and attracts more attention than traditional emails or other forms of digital communication. 

These tips can be implemented is as little as five minutes and results can be instant. Try making some new connections through LinkedIn today to grow your professional network and expand your influence.

Developing key messages for your business

Claire Celsi is the director of public relations at Spindustry Digital.

Key messages are essential to an effective communications strategy. Here’s the process I’ve used and recommended to my clients over the years. This is a shortened version, but it’s a good roadmap to writing key messages that can be used in news releases, web copy or sales materials. Key messages

The first key message you should develop is a master narrative. This is your "elevator speech," the three sentences that define your company and what it does. It is sometimes tough to boil this down into a short statement, but sometimes you only have a very short time to impart this important information. Every company should have one. If written out, this message should be short enough to fit on the back of a business card.

A reporter will often ask a very generic question, such as, "tell me about your company," to start off an interview. Sometimes, it's just as much for their own information as for the interview. The Master Narrative is a good answer to that question. One quick tip: You are who you say you are. You're the expert about your own business. Let your master narrative reflect that.

After the master narrative is solidified, the next step is developing three memorable key messages. These will be the cornerstone of media relations efforts as well as sales and marketing materials. The first key message should address the quality of the products or service offered. Here's an example:

"Acme Pencils are manufactured with the highest grade of wood and are quality-controlled to assure each pencil meets our strict standards."

The second key message should delve a little further into the workings of the company itself. What is the central passion that inspires or drives the company's owner or its employees? Here is an example:

"Acme Pencils is dedicated to preserving the environment by using only recycled packaging and a no-waste manufacturing process."

The third key message should be about your customers: "Acme Pencils are preferred by school districts in the United States, and our company has more repeat customers than our competition."

Of course, not all of these messages will apply in every situation. That is why you need to develop message categories based on likely interview subjects. There is a great technique for doing this. Sit down and think of the top five things that are likely to affect your business this year. Then write a key message that addresses each situation.

After you have your key messages written, go back and write at least three supporting points for each. For example:

Key Message: Acme Pencils are manufactured with the highest grade of wood and are quality-controlled to assure each pencil meets our strict standards.

Supporting Point # 1: Acme Pencils have a money-back, no-questions-asked guarantee.

Supporting Point # 2: Our associates average 15 years with the company and have a combined 150 years experience manufacturing pencils.

Supporting Point # 3: Acme Pencils win accolades year after year – we’re recognized by American Pencil Magazine as the industry leader.

One very important caveat about supporting points: Use numbers, use facts and use third-party endorsements.

After you've developed the master narrative and main key messages, you can even go a step further and define a tag line or write a boilerplate for your website or news releases.

The key messaging process is a collaborative effort. A facilitator (who ideally is familiar with the company, but has outside perspective) can help identify key message themes and write the messages. The process works best when all stakeholders are present for the initial work session. It’s important to get their perspective, and especially their endorsement.

Most turn to friends before Google for advice

When strategizing about how to acquire new customers businesses should pay close attention to the purchasing behavior of their target market. Where are they lurking? What influences their buying decisions?

As a business it is easy to assume that prospects opt for Google to guide their research. However, in service-related industries - those that operate on trust and relationships - prospects depend on positive recommendations to find their candidates.

In fact, according to a 2014 report by the Hinge Research Institute, 87 percent of buyers turn to friends or colleagues first for recommendations when shopping for financial services, while only about 1 out of every 10 shoppers start their research online. This may be the digital age, but humans still rely heavily on fellow humans for advice on how to spend their coin.

Although search engine optimization (SEO), inbound marketing, and AdWords are important to online and local retailers - service related businesses may be better off leveraging their existing loyal customers for growth.

LemonpicAlthough referrals are important they do not guarantee prospects will sign on the dotted line. The Hinge Research Institute also noted that 81 percent of referred buyers end up judging a business by researching its website. If the website is a lemon the referral dies on the vine.

Therefore a professional website goes a long way to closing the deal. Compare it to the days of old when companies were judged on the appearance of their storefront, cleanliness of their office, and credentials hanging on the walls. Sure, those are still important but today people nearly always begin their assessment online.

Having processes in place aimed directly at increasing referrals will get the ball rolling for service companies - buyers simply turn to friends and family first. But a professional and informational website is vital in converting those referrals into sales.

Don't Forget About Mother Nature On Mother's Day

I would hate to guess how many Mother’s Day gifts end up in the trash.  Cards, pots, flowers and more.  Not trying to be a scrooge here but how can special time spent with mom be more sustainable?

Gardening with momMost moms have a garden and like flowers.  How about being a brute and helping to restore a neglected garden.  Lots of mulch is easy to spread and helps retain moisture rather than watering all the time.  Over time the mulch decays and makes for better soil.

A live plant is a gift that keeps on giving.  Make sure they are native so mom does not have to water in the hot sweltering August sun.  Day lilies, peonies, hydrangeas, and many types of hostas flourish in Iowa.  Read the label about preference for sun and remember most hostas like shade.

Mothers day 2An old fashioned bike ride and picnic are a good choice.  You don’t have to bike far to enjoy the outdoors.  Water Works park should be especially beautiful this Mother’s Day.  Pick out a quiet place and talk about life.  Still a good idea if mom is older and has to be driven there for a picnic.

Send your thoughts to rsmith@smithmetzger.com

The Power of Inner Motivation

What motivates you to do a good job? Leadership_motivate

Most of us have seen examples of passionate people who outperform individuals with greater technical qualifications or skills.  Without passion, individuals can lose their knowledge advantage through complacency.  Leaders who match individuals to jobs they are not only skilled in, but also motivated to do, will thrive in the face of today’s rapid changes.

External Motivation

A common approach to motivating people is to reward them for the behaviors you want to see and punish those you don’t want to see.  Hence the common saying, “What gets rewarded gets done.” 

Motivation theorist Frederick Herzberg describes external rewards like pay and benefits as hygiene factors.  They are like temperature.  When the room temperature is comfortable, we don’t think about it.  When it is too hot or too cold, we are unhappy and think about little else.  Similarly, the absence of rewards can be de-motivating.  The presence of rewards is not, in isolation, motivating.  

Inner Motivation

Inner motivation is something that motivates people to want to do something without expecting a reward.  According to study after study, people report feeling motivated by things like:  a sense of accomplishment, pride in good work, sense of growth, being challenged and working with great colleagues.

If we don’t tap into the emotion and passion of others, we are unlikely to achieve much more than short-term, limited success.  Competent leaders do not underestimate this challenge.  They know they cannot force someone to be passionate, and they understand the difference between external and internal motivation.  They devote energy to creating an environment that fosters and naturally promotes inner motivation.

Does this mean leaders shouldn’t reward people?  Rewards are important when they are given as recognition rather than bribe.  When rewards recognize the intrinsic motivation already in play, people cherish them for what they symbolize. 

Stephen Covey, author of the seminal book The Seven Habits of Highly Effective People once said, “You can buy a person’s hand, but you can’t buy his heart.  You can buy his back, but you can’t buy his brain.  His heart is where his enthusiasm is; his brain is where his creativity is, his ingenuity, his resourcefulness.”

If you’re frustrated that you can’t offer greater rewards to your team, reflect on the tireless efforts that people devote in the spirit of volunteerism and ask yourself why?  You’ll probably reach the same conclusion the motivation studies report.  Tapping inner motivation doesn’t require a larger budget.  It requires leadership.

Is Your Internet Front Door Open and Inviting?

You might think by now that every business in the country has its own website. If you do, you'd be wrong.

According to Dex Media earlier this year, only about 40 percent of small businesses had their own website last year. Experts predict that number to double in 2014.

What's that mean for you? More challenges to your business but also more opportunity.

The challenges come, obviously, in the form of more competition. If your business hasn't carved out its own niche, odds are fairly good that one of those new websites will be promoting a competitor.

In fact, I'm in the process of updating my website at the Heart of Iowa Market Place and it's a smart time to take a long, fresh look at your website, too. Is it tired? Outdated? Boring? Is everything spelled correctly? How about its grammar? Is all your contact information easy to find? Is it truly as good as it can be in the way it showcases your services and products?

Those are basics -- and you can't afford to overlook them. When you get them wrong, you come out on the losing end of sharper competition.

However, a real opportunity for your business comes from the recognition that this is the perfect time to step up your game. When you think about it, a website is like opening another location for your small business; it allows you to be less reliant on walk-in traffic. It also helps you reach and build a bigger audience for very little money. And, after the winter we just had, it's no surprise that you can still make sales to people who don't want to venture out into the cold and snow.

Go beyond the basics by reaching out to a smart, creative web designer who can make your website everything it should be -- and that includes designing it so you can make updates yourself without spending lots of dollars. And, don't forget to create a mobile site, too.

Remember, your website is your company's face and front door to many, many people. Some of those folks will never walk through your doors. Just make sure your website is so inviting and easy to use that the only reason they don't come to you in person is because they're able to buy everything from you online.

Get over being nice

Danny Beyer is a sales executive at Kabel Business Services. He is a serial networker and often speaks about networking tips to groups in the community.

A little over two years ago, Scott Siepker made a splash when his YouTube video, Iowa Nice, went viral. It was a scathing rant to all of those people who assumed Iowa was simply a flyover state good for nothing more than producing pork and corn. I remembered laughing so hard I cried, feeling a deep sense of pride in my home state, and quickly forwarding it on to about a dozen people. The video showed a new side of Iowa while hitting home the message that yes, we are nice.

While I will never knock someone for being nice, there is a time when one can be “too nice.” Over and over I hear people tell me that they don’t want to ask favors of their connections or seek help because they don’t want others to feel they’re using them. We don’t want to come off salesy, or conceited, or self-serving. In short, we want to be nice.

My best piece of advice – get over it. People genuinely want to help and the only way they can do that is if we let them know what we want. We have to share our goals, our dreams, and let others know how they can help make those dreams a reality. If you suffer from being too nice think of it like this: Imagine if a friend came to you and asked for the same favor you’re too nervous to talk to them about. Would you assist in any way you could? If the answer is yes than you should feel comfortable asking your friend to help. It really is that simple.

A network, both professionally and personally, really can help all of us achieve our dreams and desires, no matter how large or small. In the end it all comes down to sharing those desires with anyone who will listen. The more people who know what you want the better your chances are for success. Start sharing those dreams and get over being too nice. After all, we’re Iowans, according to YouTube we’re already nice enough.  

Leaders and delegation

Rowena (Ro) Crosbie is the president of Tero International Inc.

Clean your room. Please, clean your room. I’ll pay you to clean your room. You can’t go out until you clean your room…

Rewards, punishments, begging, nagging... Why is it so challenging to get people to do things?

Leadership_blog

Delegation, whether at work or at home, is an area where many leaders struggle. Many times it seems simpler and more expedient to do the work ourselves. 

When done well, delegation benefits everyone. Leaders free up time for other activities. Followers grow and contribute.  Organizations achieve more. Sadly, many of us have never learned how to delegate well and we stress over whether the delegated task will get done right, or at all. Here are some fast tips.

Leaders must correctly diagnose two areas: skills and interest. If someone knows how to do the task and likes it, delegation is appropriate.  If one of those two variables is lacking, a different leadership action is needed.

1.     Skills and Knowledge

As leaders, we often make too many assumptions about what people can do and what they know (or should know). It is further complicated by employees who underestimate the task or overestimate their own skills and abilities. When someone lacks skills or knowledge in any measure, delegation is risky.

Let’s return to the “clean your room” example. It is common for parents to believe that their young person already possesses the necessary skills for this job. Do they? Really?

Why would a young person know how to clean a room well? Why would they share the same definition of “clean” that a parent does? If you have ever been met with the response “I did clean it” and the result doesn’t meet your standards, chances are there is a skill or knowledge gap. Delegation wasn’t appropriate.

Leader Action: Training and coaching.

2.     Interest and Motivation

If they have the skills and knowledge, can the leader delegate? It depends. Do they also possess sufficient interest and motivation?

All of us have things to do that we are skilled in but lack interest. We procrastinate. We make excuses. Does the individual find the task itself motivating? If yes, delegation is appropriate. If not, delegation may fail. You may find this is true of the exercise program you keep delegating yourself to do. You know what to do – you just don’t want to do it.

Leader Action:  Support and encouragement.

The who, what, when, where, and why of fiduciary duties in small businesses

Matt McKinney is an attorney at BrownWinick Attorneys at LawMatt McKinney

What is a fiduciary duty?

A fiduciary duty is often regarded as the highest duty recognized by the law. In simplistic terms, a person charged with exercising fiduciary duties (commonly referred to as a fiduciary) must discharge their duties with the utmost good faith, care, and the finest loyalty.

More specifically, the term “fiduciary duty” is often used as an umbrella term describing a number of duties that are collectively referred to as fiduciary duties.  For example, “fiduciary duties” frequently encompass duties such as (1) the duty of care - generally to act with diligence and with the care an ordinarily prudent person in a like position would exercise; (2) the duty of informed judgment - the process of gaining sufficient familiarity with the background facts and circumstances to make an informed judgment before acting; (3) the duty of disclosure - commonly interpreted as a duty to disclose certain information to shareholders or members; including, conflicts of interest; (4) the duty of confidentiality - to protect confidential and non-public information; and (5) the duty of loyalty - customarily meaning to act in the best interests of the corporation, company, partnership, etc...

Who is charged with exercising fiduciary duties?

Generally speaking, persons who exercise control over a corporation, company, partnership or similar entity are held to this higher, fiduciary duty standard. Therefore, and not surprisingly, directors and officers of corporations, who by their very nature exercise control over a corporation, are held to this higher, fiduciary duty standard. Importantly, however, directors and officers are not the only persons held to this higher standard.  In fact, in addition to directors and officers, majority shareholders are also often held to this higher, fiduciary duty standard.  Consequently, even if you do not serve as a director or officer of a corporation, be alert, because if you hold an interest in the business, you may nonetheless be held to this higher, fiduciary duty standard.

Business owners in different business entities are also held to this higher, fiduciary duty standard. For example, partners in both general and limited partnerships are ordinarily required to discharge their duties in a fiduciary manner. And, depending upon applicable laws in different states, members and managers in limited liability companies (LLCs) may also be required to discharge their duties in a fiduciary manner.

When do fiduciary duties apply?

Principally, fiduciary duties apply when a fiduciary takes action or declines to take action that relates to or that could otherwise effect the business entity; including, potential business opportunities not yet realized.

Fiduciary duties are generally not extinguished until the fiduciary is relieved or removed from the position that created the fiduciary duties to begin with. It is important to note, however, that in many jurisdictions fiduciary duties can extend beyond the point in time in which a person is relieved from their position within the business entity.

Where do fiduciary duties come from?

Fiduciary duties were developed through the common law - a body of law originally developed in England and later shaped by our courts. Today, fiduciary duties arise from both the common law and state statutes. For example, the Code of Iowa imposes statutory standards of conduct upon officers and directors in Iowa corporations. As explained above and setforth within Iowa Code Section 490.830, the Iowa Code generally requires directors to act in good faith and in the best interest of the corporation. These statutes often form the basis of a claim or defense for breach of fiduciary duty.

Why do you need to be aware of these fiduciary duties?

Whether you know it or not, if you are a part of a business entity (as a director, officer, member, manager, partner, or majority shareholder) you will likely be held to this higher standard when taking action with or relating to the business entity. Failure to comply with fiduciary duties can result in liability to both the business entity and you.  In fact, failing to fulfill fiduciary duties can be considered oppressive conduct, which can result in the dissolution (termination) of the business entity.

It is important to note that this article serves as an introduction to a legal concept and that fiduciary duties can and do differ from state to state and entity to entity. If you have questions or concerns regarding fiduciary duties, you should consider contacting a licensed attorney.  

For additional reading on the topic of fiduciary duties, visit the following links:

Care, or Beware! Iowa’s Fiduciary Duty of Care

A Deeper Dive into a Director’s Duty to Become Informed

A Director’s Duty to Remain Silent

Oppression, Breach of Fiduciary Duties, Freeze Out, and Judicial Dissolution – An Iowa Court of Appeals 2011 Analysis

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