Governing a family business is like sailing a ship. Indeed, the term governing itself comes from the Greek word for “guiding or steering.” Any family that owns a family business must consider where their family business is headed. That’s determined by who is steering the business and in what direction they’re headed. This is even more compelling as we face the rocky waters of the pandemic, rising inflation, and geopolitical unrest. If you wish to have a business that is resilient and has a positive impact on all stakeholders (e.g., employees, customers, vendors, and society) you must make sure your board is intact and functioning optimally. The board determines the company’s direction, as a collective group, similar to the way that a captain steers a ship.
Your Family Business Needs a Board
A board should be at the helm of any family business, steering the business in the right direction. If you wish to have a business that is resilient and has a positive impact on all stakeholders (e.g., employees, customers, vendors, and society) you must make sure your board is intact and functioning optimally. This article offers some questions to consider as you develop best practices for your own board, such as who should be on the board, whether you need an independent director, and how often your board should meet. As you shore up your own family business in these turbulent times, it’s important to think through the purpose and practices of your board. Because in the end, the ultimate fate of your business (e.g., sale, merger, or dissolution) will be determined by the owners. Not management.