The Second Commandment Of Family Business Succession: Create A Board
POST WRITTEN BY
Jacob M Engel
Author and CEO of The Prosperous Leader.
I help CEOs and their organizations prosper.
Having a board as a private, family business usually seems like a nuisance at best and unnecessary at worst, especially when those board members are outsiders. "Why should strangers know all my problems or how much money I make or lose?"
Most owners of privately owned companies are both officers and board members. They and their family members usually own most if not all of the shares. No wonder, then, why board meetings are almost nonexistent or just a formality.
However, a board is a must, especially if you want to create a seamless succession. Why?
1. It keeps everyone accountable, as meetings and reports will be required.
2. It mitigates politics and allows the company to create a meritocracy, especially having independent directors.
3. It allows for a seamless succession plan to be implemented with continuous updates to the board.
So what type of board works best for a family business?