Not the right models.
Author | Kristie, James |
Position | Reprint |
From Building a Successful Family Business Board by Jennifer M. Pendergast, John L. Ward, and Stephanie Brun de Pontet. Copyright 2011 by the authors. Published by Palgrave Macmillan (www.palgrave.com).
MANY BUSINESS OWNERS' only experience with independent boards is as directors of local banks or charitable or civic organizations. These are often poor examples. Community banks tend to pick directors for the primary purpose of business development, often packing their boards with customers. Directors in this heavily regulated industry also tend to become mired in operations, meeting monthly, or even more frequently, to vote on loan approvals and other operating matters. Similarly, boards of philanthropic or civic organizations are often assembled with political goals in mind, appealing to various constituencies, building alliances, or aiding fundraising efforts. They are often far larger and more bureaucratic than a business board should be. Boards of publicly traded companies are another well-known model. But their board operations are influenced by a fiduciary responsibility to a diverse and far-flung shareholder base and to public company reporting requirements.
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