FB ACAD E MY
and staff retention would be
looking elsewhere. “Having the skills
to help you through
that period is what really matters. That probably
means rotating and refreshing fairly regularly,” she says. Motivation is another factor to consider,
according to Huse. Individuals who want to create a network for themselves or to learn are not suitable. Instead, the aim should be to recruit people whose primary interest is in doing something for the company. Just as selecting the right supervisory board
members is crucial, so such a board can play a vital role in choosing senior executives. As Harvard Business Review suggests, it might appoint a formal nominations committee that
Angus advises family businesses setting up
advisory boards to define roles before looking for individuals to fill them. Too often, she says, roles are built around family members or outside advisers. “In the long run it is far more productive to start
with a charter for the board and clear descriptions of responsibilities,” she says. “It will help to establish staggered terms for
board members, so that institutional knowledge is retained while allowing for rotation on and off.”
GET ON BOARD Board members should be in place long enough to have a “meaningful impact”, says Angus, although open-ended terms are best avoided in favour of keeping a reappointment possibility. Long tenures may lead to older directors serving lengthy terms and crowding out the input of a capable younger generation. Terms of three-to-five years are sometimes suggested. “Diversity of perspectives—age, gender,
experience—is also critical, to reflect the reality of the family and the world in which the business operates,” says Angus. Board members should also be chosen to match
the family business’s current circumstances. If the company is embarking on a rapid period of growth or is expanding overseas, directors with experience of these situations should be sought, says PwC’s Steele. Alternatively, a company focused on stability
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CAMPDENFB.COM
uses objective criteria—defining specifications, carrying out a wide-ranging search and rigorously assessing candidates—to make selections before presenting a short list to the supervisory board and management.
The best supervisory board will
consist of a well-designed mix of perspectives that matches the owners’ long-term vision for the business
There are cautionary tales of companies that
failed to benefit from the kind of professionalised approach that a supervisory board can bring. “It is safe to say that larger family businesses have
dual board systems. Maybe this is the reason why they are so successful,” says Klein. “If we look at examples where family businesses
fail, such as Schlecker, an international grocery chain, we see that a functioning advisory board has not been installed.” Indeed Schlecker filed for bankruptcy in early
2012. This former retail behemoth’s demise was partly put down to the unwillingness of its founder, Anton Schlecker, to listen to outside counsel. Last year he received a suspended jail term for intentional bankruptcy and saw his two children put behind bars. As Klein says, “We can learn a lot from
failures”. ISSUE 73 | 2018
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