EY World Entrepreneur Of The YearTM
Effective governance of the family business: comparing experiences — identifying best practices
Clear communications lead to effective governance
Even with the challenges — and inevitable conflicts — caused by family ties, family businesses can attain effective governance as long as communications are open, clear and inclusive.
Here are three tips shared by panelists at the Family Business Summit.
- Don’t let your board grow too large. EY’s global survey of the world’s largest family businesses found that eight is the average number of board members, according to Dr. Joe Astrachan, Wells Fargo Chair of Family Business, Kennesaw State University. In a family business, the most important thing is to know where all the decision-makers are, noted Marjo Miettinen of EM Group Oy.
- Connect shareholders to the supervisory board. While shareholders shouldn’t automatically get a seat on the board, they do need to be connected. For example, Andrea Prym-Bruck of the Prym Group noted that they created a shareholder committee of five people to represent 42 shareholders’ interests.
- Think hard about making spouses part of the family business. Like the next generation, spouses can also challenge established family mindsets, according to Prym-Bruck. But other family businesses do not give spouses entry. According to Miettinen , every case is different.
Moderated by: Carrie Hall, Americas Family Business Leader, EY
- Prof. Joe Astrachan, Wells Fargo Chair of Family Business, Kennesaw State University, US
- Pankaj Khimji, Co-Owner and Director, Khimji Ramdas, Oman
- Marjo Miettinen, Owner, EM Group Oy, Finland
- Andrea Prym, Archives Director, Prym Group, Germany