Boardroom INSIDER for… AUGUST

 

THE GREAT FAMILY BUSINESS BOARD SHAKEUP

 

(August, 2015Family business is the hidden mainspring of our global economy, accounting for two-thirds of all businesses worldwide, 70% of global GDP, and employing up to 80% of the world’s workers. Yet the role of boards and corporate governance in family firms traditionally lagged, with succession, strategy, board monitoring and professionalism too often weak points.

That seems to be changing, though, according to two articles in the August issue of online governance monthly Boardroom INSIDER. “4 Hot Trends for Family Biz Boards” spots a global move toward “more professional boardroom procedures, structures and qualifications,” according to BI publisher and consultant Ralph Ward. Yet family firms are “picking and choosing governance upgrades that meet their unique needs.”

Experts quoted in the article find family-held companies shedding their old taboo about allowing non-family outsiders into their boardrooms. The savvy and experience they can bring (especially if they’ve served as independent leaders at other family businesses) outweigh any “outsider” squeamishness. Further, “family board members tend to behave better” with a nonfamily director in the boardroom, Ward writes. “They try not to embarrass their family.” Family businesses also now seek more training to help family members be better board members and fiduciaries.

Family business boards are even trying out “More Independent Leaders,” a second BI article finds. One hot model — a family board chairman, but an empowered independent board lead director, who takes on more of the actual boardroom operations. This outside lead director often acts as “a mentor and regent” for an incoming family board chair, notes Ward.

Also in the August Boardroom INSIDER:

pink Are CEOs just a “tool” of the board (and should they be)?
pink Five hot-button items that belong in your “board wannabe” resume.
pink How smart boards keep tabs on litigation facing the company.
pinkQ&A: Is it time for our “tainted” board member to resign?