Author: Claudia Binz Astrachan  

Don’t wait for a vacancy. Prepare family members now — through education, mentoring, clear expectations, and hands-on experience — to serve on boards, family councils, and committees.

Family members serving in governance roles can be an incredible asset to the family enterprise system. Family directors typically bring a deep understanding of business and family values, culture, and history -- and can therefore provide guidance and oversight that aligns with the past as well as the shareholders’ envisioned future. Those serving in governance coordinate the interface between ownership and enterprise, facilitate tricky conversations, coordinate family gatherings, and arrange educational activities and engagement opportunities for the next generation. 

Sadly, family members don’t always manage to successfully perform their various governance roles. Sometimes a family director lacks basic financial literacy or a sound understanding of governance boundaries, or a family council member embraces partial views favoring individual preferences rather than collective wishes of the family. Boards or family councils can become dysfunctional because of toxic family dynamics; such governing bodies drive away the best talent. 

We’ve seen that families don’t end up with the best talent for these important roles unless they have a transparent, rigorous, and sensible process to educate and develop, identify, select and elect, onboard, evaluate, and eventually offboard family members suited for governance. This article discusses both the most useful capabilities for family members taking on governance roles, as well as a sensible process for developing a pool of talented and motivated family members for governance service.  

Read the full article here.