When choosing representatives for their business board, families have two main options – having a family member occupy the position or appointing an independent director. A family member, particularly an experienced and/or elder member, as part of the board is usually expected. However, the recently released MGI Australian Family and Private Business Survey of 5,000 family businesses, indicates some reluctance to the idea of considering an ‘outsider’ as part of the family board. This may not pose a problem when everything is running smoothly, but it can be beneficial to acquire a new perspective from a qualified adviser outside the family business.
Check out the full infographic below for more on how independent directors can add value to family business boards.
In conclusion, having an independent non-executive director on the board is something every family business should consider. They can add value by bringing a new perspective to the board and can facilitate better communication between family members within the business. In many cases both the business and the family unit reap the benefits of having a non-executive director on their board.