What is a Family Advisory Board?
Family businesses can face challenges as they grow, and need to consider long-term directions and succession planning. Good governance is critical for every business. Have you thought about what a family advisory board could bring to your business?
Good governance is critical for every business but not every governance solution will work for every business. Family businesses, in particular, can be stretched. Everyone is so busy just working in the business it can be easy to lose sight of the big picture. And what about when it’s time to think about handing on the business to the next generation? A family advisory board can really help to put a structure around planning for the future, and give everyone a voice.
The board is a body of ‘elected’ or selected members who oversee the activities of a business. The focus of the board should be to add value to your business and improve processes. The board’s role is to determine business goals and objectives based on the owner’s succession plan, or goals and wishes and to develop and nurture business relationships with suppliers and customers.
When it comes to deciding on board members, you need to opt for trustworthy members with focus and relevant experience and expertise. A board member should always have integrity and act ethically. You will also need an experienced leader on the board. It is a good idea when appointing board members to look for trusted people who can provide skills and insights other members may not possess, e.g. accountant, lawyer, farm advisor, banker.
The board’s role is to determine business goals and objectives based on the owner’s wishes and values, and to develop and nurture business relationships with interested parties (i.e. future owners, customers, suppliers, lobby groups).
As a board member, your role would include establishing objectives, making sure adequate resources are available (including finances), and approving budgets.
It is also a good idea, in a family business, to have a few independent board members. They can bring in specific business expertise and also help to defuse potentially emotionally charged issues where they arise.
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