A misconception that people have of family business directors is that they aren’t always born with natural leading ability. Even the most accomplished executive had to learn the process first.
Too much pressure is placed on those who are expected to act as natural-born leaders. By failing to have some mystical insight, they’re often voted out of the company. As an experienced Family Business Consulting firm, we know what attributes your directors need. Read on to learn how Positively People can help you discover better ways to help your directors lead your company.
Include Independent Family Business Directors
A common problem amongst family governance boards is including independent members. They may fear doing so will take away from their identity or power. However, including independent members increases your level of objectivity. They aren’t as emotionally invested, allowing them to make decisions free from family politics.
Expanding your board can also fill gaps in knowledge and skills, making you more competitive. Learn how your firm can find success with our family business advisory team.
Leave Family Matters Out of the Boardroom
Some arguments arise about how the company should steer business operations. Most notably, family governance boards often bring personal matters into business meetings. While many family brands begin with these members, they should not only influence shareholders. They should serve in a ceremonial capacity where they offer advice.
When your firm grows, your board needs to evolve with dedicated training. Learn the right way forward for your brand with family business succession planning.
Align Both Sides Under One Mission
Whether a director’s powers are ceremonial or have weight, they all need to understand the current goals. Sharing ideas, information, training, and experiences can improve communication between both sides.
Some relatives may feel silenced by not knowing enough about the company’s operations. Others can be intimidated by more business-minded members. Incorporating a two-tiered board may work best to keep everyone included. Begin defining your firm’s roles, responsibilities, and goals with our advisors.
Find Candidates Before You Need Them
Waiting until after a director steps down is rarely a wise decision. Instead, possible replacements should be considered sooner with mentorship and training.
Some companies wait until after possible members graduate from their university, while others are incapable of enticing them to take on more responsibility within the group beforehand. You can’t wait to make a reactionary decision if you hope to grow. Your best bet is to begin continuity planning with an experienced family business advisor.
What Requirements Do You Have in Place?
The mark of a poorly prepared board is one lacking defined requirements for serving. Not only should that include who can lead, but how they conduct themselves. Some firms have arbitrary guidelines, like who is the oldest or allowing only male relatives. That does nothing to help the company set goals, succeed, or survive.
Clearly defined roles, responsibilities, and rules prevent family members from overstepping. You should focus on specific metrics for directors, including:
- Minimum Age
- Experience Needed
- Device Etiquette
- Skill Tracking
- Observational Roles
- Future Opportunities
- Scheduled Policy Updates
- Nomination Process
There are many considerations for you to make towards family business succession. Make the best decisions possible with Positively People and contact us today to get started.
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