Family dynamics and board duties: A delicate balance

In every country of the world, the large population of family-owned companies constitutes a bedrock of commercial activity and creativity. Most operate within the same legal and financial framework placed on publicly traded corporations. But family companies place an added layer of obligations on their board members, especially the independent non-family director (often called an outside director). It should be no surprise that these demands are unique to each family-owned company. Simply stated, each family has distinctly different characteristics, needs and driving forces that affect their company.

While it's easy to state such an obvious fact, it is far more complex to explain how this translates into additional or different duties for those who want to excel as members of a family-owned company board. Look at the dynamics of any family (your own, for example), and you begin to understand the tradeoffs often made between material gain and quality of life. This same balancing act takes place in family-owned and -operated companies. You must not only try to understand this, but also recognize how this may influence your actions and advice as a director.

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