The Emotional Benefits of a Board: By Stephanie Brun de Pontet, PhD
While many articles have been written on the importance of a well-functioning board of directors to the sustainability of a family business over generations, it is not unreasonable to also pose the more immediate and selfish question: why would I want a board? What is in it for me today? How can a board help me tackle the ‘hard stuff’ that I sometimes would rather not have to address? There are plenty of good ‘business’ reasons for having a board – but the truism that ‘it is lonely at the top’ generates a series of emotional benefits that can also be derived from having a board.
Just to name three:
Experience, Expertise and Empathy. A board of risk-taking peers can ease the fear of the unknown and help anticipate new challenges. Individuals who have the experience of having been in the CEO chair in a down cycle, with limited access to credit, will not only have practical advice and possible solutions, they will also have true understanding of the pressures a business leader faces every day.
A Sounding Board. Like most anyone else, family business owners are full of ideas that range from great to mediocre. What many of them lack is a sounding board to help evaluate those ideas—a panel that is knowledgeable and objective and will listen and react honestly, appropriately and without unintended consequences.
Confidential and Empathic Counsel. The empathy independent directors have for the leader and owners of a family business confronting an intense dilemma will enable them to lighten the mood, and think through rational options in a way no others could. For example, how can we decide if we should pay more dividends to appease frustrated shareholders, or hold more cash in reserve to put the company in the strongest possible position coming out of this recession? Making the decision to put together a board of directors with independent outsiders who can really push you to address the hard questions can feel like a frightening leap to many business leaders. However, in our experience those who take the plunge find far more emotional support and encouragement from this group of individuals than they ever expected.
We would love to hear about your experience with your own board, or in sitting on someone else’s board and the opportunities you saw for this kind of emotional support (and sometimes push) for the CEO.
I would also like to invite you to consider our upcoming webinar on Family Business Boards. We will be addressing many of the issues that face family businesses when trying to get the most out of their boards.
Our September 29th webinar, Building your Board for Maximum Impact will answer many of the questions around developing your board, give you practical ideas and best practices and allow you to ask questions that are pertinent to your family’s board.
To register or learn more about our webinar just go to www.efamilybusiness.com Hope you can make it!