The Role of the Board at Family-Owned Hagerty
Based in Traverse City, Michigan, Hagerty is the world’s leading insurance and service provider for classic vehicles and host to the largest network of classic car owners. A family business from the start, Hagerty set out to sell insurance that could not be found anywhere else. In 1984, right from their basement, Frank and Louise Hagerty launched the first Agreed Value policy for vintage boats, completely changing the way collector boats were insured. From the beginning, Hagerty has embraced innovation. By listening carefully to clients, business partners, employees and the collector community at large, Hagerty has developed products, services and programs that exceed expectations.
The vision for the future of the company driven by McKeel Hagerty, the Chief Executive Officer, gave rise to a strategic decision to form the Hagerty board in 2010. Creating the board ensured Hagerty could access the diverse experiences, skills and perspective that only outside directors could provide to continue to grow the business into a world class company.
As a private company, Hagerty has discretion regarding the structure of its board. Initially the board consisted of an equal number of family directors and non-family directors. The board has evolved and family directors are now in the minority. This strategic move adds another level of independence to board operations and provides a high level of accountability.
The board has played a critical role in balancing family dynamics among the owners. Like many private companies, Hagerty has a mixed group of working and non-working family members and owners. It is important to assure the non-working owners that the company is being well run and that their resources are being stewarded properly, especially when selecting among competing priorities that require capital investment. The board and the associated governance structure provides confidence and clarity around decision-making. In addition, the board has allowed the business to operate effectively when family conflicts arise that are difficult to resolve in a business setting. Having the board in place during these challenging times gives Hagerty stakeholders assurance that the company is stable and will continue to deliver on its commitments.
Over the last several years Hagerty has experienced exponential growth which led to the desire to upgrade the management team and management practices to a truly professional level. The board assisted in creating boundaries between the legacy family practices from the entrepreneurial phase and the newer practices management would need to operate the company going forward. A committed team, led by the Chairman of the Board, Tom Jones, and the General Counsel and Corporate Secretary, Barbara Matthews, has aligned Hagerty’s governance principles with public company standards. For Hagerty, the pillars of good corporate governance include an intentional approach to agenda development that focuses primarily on strategic discussion, regular board and committee evaluations, succession planning for the board and the top tier of management and an extensive on boarding process for new board members.
The impetus behind the creation of the Board was a desire to tap into a diverse set of experiences and insights to support achievement of the company’s strategic objectives. This has translated into a winning approach for Hagerty.