How to Ready the Next Generation for the Board
In this issue's Two Hats, we comment on the pros and cons of the next generation attending board meetings. Here are some other ways to begin preparing the next generation for its eventual board participation.
Some family firms use "Shadow Boards" or "Junior Boards" to simulate the board experience for the next generation. These meetings often immediately follow official board meetings and reproduce management presentations, the key issues discussed, and the appropriate background information.
Many families share the minutes or agendas or information packets from board meetings with the next generation. It's helpful to have a knowledgeable member of the family (i.e., a board member or the board chairman) available to answer next generation questions.
At the annual shareholders' meeting, families often review the board's activities for the past year. (Some families actually ask all the shareholders to ratify the board's actions of the past year.)
Occasional joint meetings of the independent directors and family shareholders build rapport and trust. A special session could be held for the next generation family members.
Families can encourage family members to attend educational seminars on governance and boards. (The National Association of Corporate Directors in Washington, D.C. has frequent programs.) Some invite local professors or family business consultants to conduct workshops for the family, if the family is large enough. Family member directors could possibly do the same for the family -- or a family friend who's an active, knowledgeable director for other companies.
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