More Than A Seat At The Table – What Family Businesses Need From A NED

Most family businesses reach a point where the board needs more than just familiar voices around the table. This usually happens as the business grows, the family becomes more complex, or the next generation starts to step up. It might be when a founder is preparing to take a step back, or when the rising generation starts to push for change. It’s often a moment of reflection, a point where the family realises it needs a fresh perspective to help plan the next chapter. At this stage, a Non-Executive Director (NED) can add real value, offering independent oversight and strategic insight that can be hard to find within the family itself. But bringing a NED into a family business isn’t as straightforward as it might seem.

Family businesses can be deeply personal. Decisions aren’t just commercial, they carry emotional weight, reflect shared history, and often involve long-standing relationships. For example, a father who has built a business over decades might struggle to step back, even as his son or daughter is ready to lead. Or siblings working together may find themselves locked in old patterns of behaviour, still seeing each other as they were in childhood, rather than as mature, capable adults. One client refers to this as the 'Short Trouser Effect' – the idea that no matter how capable or experienced the next generation becomes, certain family members will always see them as they were at fifteen. An aunt might still remember the time a now-CEO knocked over a tray of drinks at a family gathering, or a cousin might recall a heated argument many years ago. These small but lasting memories can shape perceptions and create unspoken barriers to leadership. An effective NED cuts through this, providing an outside view that isn’t burdened by family history or internal loyalties.

This is where the challenge lies. Family businesses don’t just need smart, experienced people on their boards. They need individuals who understand the unique dynamics of a family enterprise. It’s not just about balance sheets and strategic plans. It’s about understanding what the family stands for, where it has come from, and where it wants to go. It’s about knowing when to challenge and when to support, when to push for change and when to respect tradition.

A good NED can be a sounding board for the CEO, a mentor for the rising generation, and a steady hand during times of transition. They can help the family business avoid common pitfalls, like over-reliance on a single leader, succession issues, or missed growth opportunities.

For example, they might step in when a founder is struggling to let go, gently encouraging them to focus on the future of the business rather than day-to-day control. Or they might help a family align around a shared vision, avoiding the kind of drift that can lead to conflict or division over time. But finding the right person takes time. It means looking beyond just technical expertise and focusing on fit – not just for the board, but for the family as a whole.

At TWYD, we often say that the best NEDs for family businesses are those who can wear two hats – one for the commercial realities of the business, and one for the values, purpose, and continuity of the family. It’s a rare combination, but when it works, it can be transformative.

So, if you’re thinking about adding a NED to your board, start by being clear about what you really need. Are you looking for strategic insight, industry expertise, or a voice of calm during challenging times? Do you need someone to mentor the next generation or challenge the current one? Whatever the case, the right NED can be a powerful ally in securing the long-term future of both your business and your family’s continuity.

Why NEDs are Different in Family Businesses

The role of a NED in a family business is different from that in a corporate environment. In a corporate setting, the focus is typically on shareholder returns and short-term performance. In a family business, the priorities are often broader and more personal. It’s about stewardship, long-term planning, and preserving family values while still achieving commercial success. This means the NED must have a deep appreciation for the family’s story, its culture, and its ambitions.

In many cases, the NED also has to act as a bridge between generations, helping to manage the delicate transition from one leadership style to another. They may need to support the rising generation as they take on more responsibility, while also maintaining the trust of the older generation. This is no small task. It requires patience, empathy, and the ability to understand complex family dynamics without getting drawn into personal conflicts. For example, a NED might find themselves helping a family articulate its shared purpose or mediating disagreements between siblings about the future direction of the business.

Finding the Right NED

Finding the right NED for a family business is about finding someone who can fit into the culture, understand the family’s goals, and provide the right kind of support at the right time. This means looking beyond traditional CVs and industry experience, and instead focusing on values, personality, and emotional intelligence.

The best NEDs are often those who don’t need to do the role for financial reward or status. They have already achieved significant success in their careers and are now motivated by the opportunity to make a meaningful impact. They do it because they want to help, to share their hard-won insights, and to guide the next generation without the distractions of personal ambition. They understand that a family business is not just about profit – it’s about people, relationships, and continuity.

A good NED will bring their own experience, but they also need to be good listeners. They should be able to challenge when necessary, but also know when to step back and let the family lead. They need to be resilient, adaptable, and genuinely invested in the long-term success of the family and the business. Above all, they need emotional intelligence – the ability to read the room, understand unspoken dynamics, and know when to push and when to pause.

Ultimately, the right NED can be a valuable asset, providing fresh insight, a steady hand in times of change, and a trusted voice at the table. For family businesses looking to the future, this kind of support can be the difference between merely surviving and truly thriving.

About the Author - David Twiddle is the founder of TWYD & Co, a specialist in executive search and leadership advisory for family businesses. With decades of experience, David has worked closely with founders, rising generations, and family boards, helping them find the right NEDs, define leadership roles, and plan for the future. His approach blends commercial insight with a deep understanding of family dynamics, offering practical advice that helps business leaders make confident decisions.