“Strong, effective boards are directly related to business performance.” At face value, it seems obvious. The board makes the decisions. And those decisions affect the business’s performance. But what makes for an effective family business board? And what role do family business directors play?
According to the authors of the article, there are six components that compose an effective family business board. The first component: clearly define the board’s scope of responsibilities. Without a clear scope of responsibility, the board can encroach on boundaries. This leads to friction between the board and managers. Another key component of an effective board is the competency of its family director.
A family director is in a unique position—they facilitate communication between the company and the family. If unprepared for this responsibility, though, miscommunication between the company and family can lead to frustrations and eventually mismanagement.
To learn about the six components of an effective family business board and the expectations of a family business director, read “Shifting Your Board from Ineffective to Powerful: Do’s and Don’ts.”
Read about the six components of an effective family business board here.
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