Can “pop-up” boards work for family businesses?
Family businesses are defined by their long-term outlook, strong values and deep personal commitment to the enterprise. This is often reflected at board level too, where there is often a reliance on long-serving individuals with deep knowledge of the business and trusted advisers who know the family well. In uncertain times, these characteristics can be a significant advantage, bringing stability and especially in times of change such as growth, succession or external shocks that require specialist knowledge. In today’s uncertain times, family firms are increasingly reflecting on whether their governance arrangements are fit for such times. One route being tried by some family businesses is to experiment with a more dynamic, issue-led approach, namely “pop-up” boards – an arrangement in which temporary, specialist advisers focus on a specific issue, rather than being a permanent fixture in the governance structure. certainty. But they can make governance more complex – While still relatively new, this approach reflects a broader trend in how boards are thinking about governance, and it has particular relevance for family-owned businesses. A changing governance environment Nurole’s latest Board Barometer suggests that boards are approaching the year ahead with a degree of caution. Expectations for growth are mixed, operating costs
are expected to rise, and political and regulatory uncertainty is seen as the most significant risk organisations are facing. Family businesses are dealing with the same underlying issues: policy change, tax, cyber risk, technology change and the increasingly complex landscape in which they operate. For, family firms which are often run with leaner boards and fewer committees, this heightened complexity is putting greater weight and importance on the judgement and experience of a small group of individuals. The research also highlights that boards are spending more time on risk, resilience and execution, and less time on routine financial oversight. For family businesses, this will feel familiar. Board discussions are increasingly about how decisions are made, whether risks are fully understood, and whether challenge is sufficiently open and constructive. One of the more striking findings from the research is that most board members believe their boards could add more value than they currently do. The challenge is not a lack of ambition, but how best to unlock that value without over- complicating governance. The appeal of issue-led governance It is in this context that ‘pop-up’ boards are gaining interest. Rather than establishing standing advisory bodies, ‘pop-up’ boards bring together a small number of external experts for a short, defined period to focus on a specific
Niamh Corbett Nurole
FBUK Issue 6 28
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