Running the Family Business Board

With economic, technological, and regulatory disruptions creating both risk and opportunity, strong governance is essential to the long-term success of family businesses. Strong governance is enabled by a combination of boardroom culture, policy, and practice. Family business directors have considerable discretion in determining the specific processes, practices, roles, and responsibilities they delegate to management to best support stakeholder needs and expectations. 

This second Director Essentials report in the Family Business Series focuses on five key aspects of running the board and steps family business boards can take to enhance their governance. Each of the five key subject areas below is presented briefly but may be the focus of considerable deliberation by the board. Suggested discussion questions and additional NACD resources are provided for each area. 

Five Focus Areas to Enhance Family Business Governance

1. Governance Principles and Culture: What set of principles and culture does our board need to best serve the business and elevate the family’s priorities now and into the future?
2. Board Role: What is the role of the board, and how do we carry out the board’s work to create long-term value for the owners?
3. Governance Practices and Documentation: Which governance documents, structure, and practices establish and reinforce our ideals?
4. Board Meetings: What board calendar and management reporting support effective board meetings and decision-making?
5. Director Onboarding and Evaluation: How do director onboarding, education, and evaluations support the board’s ability to address critical issues?