The Role of the Board

May 11, 2011 | Comments Off on The Role of the Board
Posted by John A. Aiello

The United States has approximately 2.5 million family-run businesses, according to the 2002 Families in Business report generated by the NFIB Research Foundation. Although these companies include a myriad of business endeavors,  to a large extent they face a similar governance challenge—in many family businesses the CEO plays conflicting roles of entrepreneur,  parent, shareholder and boss. The type of corporate governance structure used by a family business reflects  how the CEO deals with these conflicting roles and how the family deals with operational and business planning  challenges. Including one or more independent directors in the governance structure is often an effective means of addressing such conflicts and challenges.

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