Non-Executive directors needn’t be just for large organisations. All companies should have a properly constituted board. In particular, family businesses where the board is often made up exclusively of family members can benefit from the independent, experienced, view that a NED can bring.
Non-exec directors can help boards focus on the right things and have productive meetings devising and implementing strategy without getting bogged down in management issues or day-to-day office politics.
Research by Charles Russell Speechlys conducted amongst over 300 family businesses last year revealed that ninety percent of UK family businesses operate with no formal governance structures in place. From my experience, a lack of formal governance can lead to struggles with succession, complacency within the business, family disputes, and even damage to growth.
One of the key areas which is worth addressing first and foremost is the structure and make up of the Board. I wasnt surprised that, according to our research, only two thirds of family-owned businesses have a Board of Directors and of those Boards, 75% consist exclusively of family members.