The Family Business — To board or not to board? - Phyllis J. Campbell
Part 3 of 3: Practical Steps to Recruit Truly Independent Directors for Your Family Business
In Part 1 and 2 of the Series of “To Board or not to Board”, we examined the barriers, opportunities and framework questions that need to be considered before recruiting outside board members.
This third part of this series of articles will layout some practical steps in getting effective outside directors into the company.
First of all, it is important to acknowledge that independent directors need to be just that — truly independent advisors. What does that mean?
In phase one of a family-owned company board, it is not atypical to have a mix of key family members (shareholders) and friends of the family as the “starter board”. We also see a typical advisory board structure that has two thirds family members and one third outside independent directors.
However, it is important (in phase two) — to consider what truly independent board members can bring and how to thoughtfully recruit them.
Independence, in the context of family-owned business, means people who care about the nature of the business and understand the family as a starter. However, it is also paramount that the outside directors bring a diversity of thought, business experience and an ability to give the unvarnished advice to family and management that they may not otherwise hear. Diversity of thought is infused through a mix of family members and outsiders who represent age ranges (generations), gender diversity as well as ethnic and other types of diversity. It is important to recognize that fresh perspectives will come from individuals that have very different life experiences and perspectives that correlate to business opportunities.
Secondly, it is important to have a recruiting process that is expansive and thorough.
The process of recruiting begins with defining the priority order of criteria, keeping diversity of thought in mind. Recruiting can start with brainstorming a list of ideal candidates that are known to the family — i.e., who aligns with our stated criteria? However, it is important to look to outside sources for additional names, as there are a number of qualified individuals who are available and willing to sit on a family-business board. Outside recruiting firms can be additive to this process.
In asking the question: “To board or not to board?”, it is important to acknowledge that in order to grow and stay viable for the long-term, a set of outside perspectives is necessary and important. The payoff is that the business, led by management and advised by a diversified board, can be a force for the long-term good of the family, the employees, the customers and for the communities it serves.
Authored by Phyllis J Campbell, Phyllis J Campbell Consulting LLC
Phyllis J. Campbell is a Family Business Board Consultant with over 40 years of board and executive leadership experience. She has led in both nonprofit and public sectors and now advises family businesses. Passionate about fostering diversity and inclusion, Phyllis focuses on building strong board cultures to support sustainable growth and long-term success.
Connect with Phyllis on LinkedIn.
