It is interesting in this context, that 73% of family firms looking to grow aggressively have non-family non-executives. Family firms need a board which is able and willing to give an opinion, and question decision-making, but which also shares the company’s vision and values. As Andy Berliner of the US based organic foods producer, Amy’s Kitchen says, “We’re forming an advisory board, but finding people who share our values and have the right experience to help is not easy. We want people who not only have the skills but who appreciate what we’re doing and can put their heart into this.”
While every family firm will want directors who ‘fit’, every business will have different needs when it comes to the selection of the board. We often work with owners who are nervous about giving up control or sharing confidential information with ‘outsiders’, even when these people are board directors. Others worry about the expense, or struggle to see the value of board meetings, which means they don’t allow the time needed to make best use of them. The process of selecting and hiring outside board members also raises real concerns about getting it wrong, especially for owners who don’t have established processes for doing this, and aren’t aware that there are ways to protect themselves if things don’t work out.
Likewise attracting the right individuals and ensuring a good fit can be challenging, as potential non-executives need to understand the dynamics of the family business, and the complexity of the family relationships involved.
Nowhere is the board more important than in strategic planning. A good board should be challenging the business to develop such a plan, if it doesn’t already have one. For example, it should be raising questions about the impact of new technology, and asking for information on market trends. The right kind of non-executive director will also have significant experience to offer in the detail of the planning process, from helping the business think through the issues objectively, to scenario assessment, to the formulation of a realistic and effective plan, and monitoring progress against it on a regular basis. A robust strategic plan will also be invaluable in recruiting new non-executives, by identifying areas for future expansion or diversification, where different skills and input might be needed at board level.