Five questions every agribusiness board should ask before a major capital decision

Large capital commitments in agribusiness are long-lived. A processing plant, a new region, an acquisition or an irrigation programme will outlast several commodity cycles, at least one change in policy and, often, the executive team that proposed it. That is exactly why the board’s role is not to validate the business case, but to test it.

Over the years, five questions have consistently separated decisions that created value from those that only created activity.

1. What has to be true for this to work?

Every investment case rests on a handful of assumptions: prices, yields, volumes, costs, timing. Ask management to list the few that really drive the outcome — and to show how the return changes if each one moves against them. If the case only works in the base scenario, it is not a case; it is a hope.

2. Why us, and why now?

An attractive market is not the same as an attractive opportunity for this company. Boards should understand the specific advantage being deployed — distribution, origination, technology, relationships — and why the timing is right rather than simply available.

The board’s job is not to validate the business case. It is to test it.

3. How does this fit the portfolio?

Capital is finite. A good project can still be the wrong priority if it concentrates exposure to the same commodity, region or customer, or if it absorbs management attention needed elsewhere.

4. What is our exit or adjustment path?

Few decisions are fully reversible, but many can be staged. Ask how the investment could be phased, what milestones would trigger the next tranche, and what the options are if conditions change.

5. Who owns the outcome?

Clear accountability is often the difference between a plan and a result. The board should know who is responsible for delivery, how progress will be reported, and which indicators will tell early whether the thesis is holding.

In practice

• Request a one-page summary of the critical assumptions and sensitivities.
• Compare the proposal with at least one credible alternative use of capital.
• Agree on review milestones before approval, not after.

None of these questions is new. What makes the difference is asking them consistently, with independence, before momentum makes the decision for you.