Moving from the Kitchen Cabinet to a Fiduciary Board

Moving from the Kitchen Cabinet to a Fiduciary Board

Moving from the Kitchen Cabinet to a Fiduciary Board

April 25, 2021

By Mary Lee Schneider 

Your company has been operating well for years with an informal group (or board) of advisors. You call this your “kitchen cabinet,” comprised of trusted friends and business associates. It might include the company or family’s banker, attorney, or other people well-versed in the history of the company.

But winter is coming…  

It could be the transition of ownership from one generation to the next, or the hiring of the first non-family CEO. Or perhaps a family member is about to step into their first CEO role and would benefit from the counsel of experienced chief executives. Maybe the business is now of a size and level of complexity that additional skills are needed to support the next stage of growth — or to face the challenges ahead.

If, after much reflection, you decide that the company would benefit from a fiduciary board (and before you pick up the phone and activate your network), ask yourself the following questions:

If you’ve answered yes to all of the above (and still before you pick up the phone and activate your network), answer this next set of questions:

This last bullet point bears emphasis. While there is certainly nothing wrong with reaching out to your network for qualified and relevant candidates, there is great value in pushing yourself out of your comfort zone for candidates with diverse or non-traditional backgrounds. Consider tapping into resources within the National Association of Corporate Directors (NACD), the Private Directors’ Association (PDA), or any number of specialized retained search firms for new board members. Over time you may find that some of your most valued board members have backgrounds that at first blush might not have been an obvious fit. 

Convening your first fiduciary board is one of the most important decisions a company will make as it matures and grows. Make sure you take the time to understand the implications of taking this next step and identify (objectively) the skill sets and backgrounds needed to take your company to the next level. 

 

Mary Lee Schneider is a director of Larry H. Miller Group of Companies, Active International, Old World Industries, and Board of Trustees, Penn State University. She is also an NACD Directorship Certified director.

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