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Helping Family Businesses
Prosper Across Generations®

Maximizing the Board's Value

By John Ward

Often family business owners are too easily satisfied with their outside Boards. By its very existence, a board provides:

  • Respected, smart people sharing interest in the company
  • Stimulating give and take at meetings
  • Helpful thinking on the key issues of the day
  • Objective people on call in case of a death or disability in the business leadership

But some business leaders we know take an extra step to maximize the value of their Board. They set one-to-two-year objectives for their Boards to accomplish. We've found that Board meetings are so dynamic that we can go in lots of different, interesting directions, as one business owner put it, "but I've come to realize that we can't do everything. What I have to do is decide some things that I really want to be sure we accomplish..."

Some concrete objectives we've seen for Boards:

  • Understand the business well enough to be able to help my spouse and children know what's best for the business if I die.
  • Develop a process for selecting the next generation leadership.
  • Evaluate our strategic planning process.
  • Assure the family that our compensation methods are objective and appropriate.
  • Help CEO finalize a compelling, durable business mission statement.
  • Propose a process to recruit and select future independent Board members.
  • Develop a shareholder redemption policy.
  • Review and revise the corporate charter and by-laws.
  • Develop a conflict of interest policy among shareholders and between shareholders and the company.
  • Help develop a process to identify and audit the business's values.

Each company and Board will, of course, have its own particular objectives. We believe, however, that each CEO, chairman or family council should decide, with their Board, what objectives they want to accomplish for 1997.

 

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