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Criteria for Evaluating the Board

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As his title suggests, Robert Neuschel, Professor of Corporate Governance at the Northwestern University’s Kellogg Graduate School of Management, studies boards of directors. His research and experience allows him to offer the following list of key factors leading to board effectiveness. If you are wondering how well your board is performing, you might consider these benchmarks:

  • Complete openness and trust between CEO and the board.
  •  Workable flow of information – both formal and informal.
  • Climate that encourages discussion and disagreement.
  • Maturity and objectivity in considerations.
  • Challenging but not adversarial board spirit.
  • High moral tone in guidance and decisions.
  • Good preparation and homework.
  • Advocates for the business.
  • Strong relationship efforts with CEO.
  • Willingness and capacity to face tough issues.

Board evaluation, we believe is extremely important for family firms because of the benefits that family firms gain from effective boards and because of the complexity of family business where family and non-family members may seek a variety of economic and non-economic goals.

 

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