Tips on Finding Board Members for Family Businesses
Choosing Board Members for a Family Business Can be a Delicate Process, but with Proper Due Diligence, a Perfect Fit Can be Achieved.
Mario Vicari and Tyler Ridgeway cover some of the key points in choosing board members for a family business, covering topics from how a board should be structured, how board members should be qualified and compensated, and what work should be expected from them.
The percentage of family businesses with a board of directors is on the rise. In fact, many of the most successful family businesses use boards. Yet companies without a board tend to struggle with the idea of creating one because the task can seem daunting. Many family companies have never had a non-family member involved â€śbehind the scenesâ€ť at their business, and that scares some families. There are also a number of questions that need to be answered:
- How should the board be structured to ensure weâ€™re getting the most out of it?
- Who should serve on the board?
- Where can we find qualified board members?
- How much work will be involved for board members, and how should we compensate them?
A board of directors can serve a vital role in helping a family company navigate its future. Besides the obvious advantage of having access to individuals with expertise in strategy and other high-level business issues, a board provides two additional distinctive benefits. First, a board brings greater accountability to the family owners and executives running the business. This is a significant step for a private company, since the family owners are agreeing to allow others to hold them accountable, for their own good and for the good of the family business.
More about what to look for, finding the right fit, and how to compensate board members here.