Becoming A NED In A Family Owned Business

A seat at the top table of a family owned business brings its own set of unique challenges and opportunities for an independent board member joining the board as a Non-Executive Director or Board Advisor. 

So, what should you be questioning if you’re considering joining a family business board? 

How is the organisation governed? 

Who currently owns the business? How are decisions made? What’s the family succession plan? Where are they on that journey? 

Many of the board roles we advertise with Dynamic Boards are with organisations that have frameworks we understand well: simple shareholder structures and with regulatory frameworks governing many aspects of how they operate (e.g. how long board members are on the board).

Depending on the size and nature of a family owned business, they may or may not have considered establishing a family charter. Most family businesses will have both written and unwritten rules of how the family operates so it’s important that as a new independent board member you are as aware as possible of the frameworks you are operating within. This will make navigating family politics easier as a non-exec. 

What would your role involve? 

What is the legal structure of the role? Are you there for advisory purposes? Are you joining as a Non-Executive Director (formally registered on Companies House) or as a Board Advisor (without voting rights)? If you are joining a board as a ‘Board Advisor’ make sure the governance structure is set up appropriately and you don’t unknowingly act as a ‘Shadow Director’ and hence become liable as though you were a director (read our blog to learn more).

If you aren’t there as a formal Director you may have influence but not control. That might be a new dynamic for you if you have been a NED previously. It’s worth being cognisant of the difference, and reflecting on whether you are willing to accept the board not taking your advice sometimes. 

If you are a Board Advisor are you happy to occasionally stray into the consultant remit and be contracted to help with special projects? It’s worth being clear on where these boundaries lie early on. 

What is the mission of the business? 

Does the business have a clear purpose statement, and/or mission and vision statement? Do they have a values or principles statement?

If the business is clear on these elements then you will more easily be able to establish whether they are things you also believe in and can get behind! But if they aren’t clear yet, and you like what the organisation is achieving, then perhaps this is something you can help them establish. It might be that their values are strong but not well documented. It’s helpful to understand what the key stakeholders are already aligned on, as this will provide a clear focus for the decisions the board will make. 

Do you appreciate the magic of the legacy? 

One board advisor to a family company talked about the family owned aspect of the business as “the little bit of magic that you always have to think about”. As you get to know the business, it is worth asking about the backstory to the organisation, who originally founded it and what legacy has been passed down through each generation. 

It can be a heavy weight to carry for the family members in executive roles: the knowledge that the business has lasted for generations and the pressure to continue to serve customers/ the mission of the organisation. Remember, you’ve not been brought in to join the family, you’ve been brought in as an independent thinker for board discussions! But it is important that you remain aware of the family legacy element and how this might impact future decisions and risk appetite. 

Do you have the secret ingredient… EQ (emotional intelligence)?

In family businesses, it is key that you have the ability to read people, to appreciate their needs and concerns, to pick up on their emotional cues and sensitively navigate the power dynamics of the board. 

You’ll need to be able to manage your own contribution to ensure you have a positive impact on the communication across the board, and that you can help diffuse any potential conflicts. At times you might need to be the voice of reason and diplomacy between family members that don’t see eye-to-eye. Objectivity and impartiality are essential traits.

Once you’ve got to know the board and business, you’ll need to strike the right balance between being respectful and sympathetic to the DNA of the family ownership and sensitively challenging pre-existing family views. Equally, you will need to feel like you are able to speak freely and that your points will be welcomed, respected and listened to by the family board. 

Are you able to work hard to establish strong communication?

Family board members will likely have many opportunities to discuss the business outside of formal board meetings. Whereas you will have had much more limited time with other board members. If you feel you don’t have sufficient insights/ information to be able to add value at board meetings then you might need to take action. 

Whilst you should all receive the same information for board meetings, it is possible that it’s the information not in the document (the pre-meeting conversations) that have conveyed much of the reality of what is happening in the business. You may find it helpful to schedule pre-meeting calls with key individuals, and to gently nudge if you feel there is information you require that hasn’t been made available to you. 

As a new board member, you may not feel you wish to question every element of the meeting that is unfamiliar to you, or to ask for the backstory on numerous aspects of the business, so again this is an important time to exercise EQ and sensitively navigate when to challenge and when to hold back. Earning the respect and trust of the board so you can be brought into the fold is key to establishing an open line of communication and trust between all parties. 

Sign me up?! 

  • Dynamic Boards advertise board roles from across all sectors, including family owned businesses. If you want to be the first to see when a family owned business is advertising their NED / Board Advisor role with us, please sign up to view our board roles (for free) here
  • If you are a family owned business looking to add an independent board member to your board you can contact us to learn more about how we can help you advertise your role to candidates who will add value to your board. We have supported other family owned businesses through this process and we’d love to help you. You can see information on our advertising options here and you can get in touch with the Dynamic Boards team at  

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