How should family businesses cultivate and prepare the next generation for board service?
Owners need to provide ongoing education and exposure to the family and enterprise to those who are interested in serving. Potential candidates will need:
A deep understanding of the family enterprise including its history, culture, operations, finance, products or services.
A broad understanding of business in general and the industry in which the company competes.
A commitment to servicing the family owners' goals.
Opportunities to be involved with family in ways that build communication and trust.
Knowledge of the roles, authority and responsibilities to the company's top executives.
The ability to offer an independent perspective while functioning as part of a team.
Craig Aronoff, Co-Founder and Principal Consultant
Start by making inquiries to potential family members about directorships that are inclusive. Once the family members are identified, then:
Help educate them about the specific roles/expectations of a board and of individual directors.
Help build the business-related skills they need to contribute to meetings in a meaningful way.
Help them develop specific personal attributes that contribute to a collegial, collaborative board culture.
Connect them with appropriate mentors/coaches who will provide ongoing support to them in their role as a director, so that they have opportunities to further develop over time.
Kelly LeCouvie, Senior Consultant
I recommend setting realistic expectations early:
Service is not a right but a responsibility to represent all owners.
Everyone is served best when the right members are elected to the Board of Directors (BOD).
Family board members don't need to be industry experts or financial experts but they should take the effort to understand both areas.
Owners can help next-generation members identify the talents and expertise they have to contribute to the BOD. They should also develop an understanding that different points of view can be valuable.
Some families develop a “Junior Board” or some type of experience that exposes next generation members to the BOD process. These meetings often immediately follow official board meetings and reproduce management presentations, the key issues discussed, and the appropriate background information.
Otis Baskin, Consultant
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