New Insight Guide On Non-Executive Directors In Family Firms

Family Business United (FBU), the UK’s independent champion of the family business community, has today launched Insight Guide: The Value of an Outside Voice. The new publication examines the role of Non-Executive Directors (NEDs) in family businesses and how to make the appointment a success.

The guide is produced in association with TWYD & Co, leadership advisers to families in business. It brings together two complementary perspectives. The first explores why NEDs matter so much in a family business and the roles they play. The second is a practical guide to making an appointment, covering how to define the need, run a search, agree the terms and give the relationship the best chance of success.

Family businesses carry a particular tension at their heart. The shared history, deep loyalty, patient capital and sense of stewardship that make them strong can also make difficult questions hard to ask. When the people around the board table are also the people around the Sunday lunch table, uncomfortable truths can go unspoken. The guide argues that the right NED does not dilute those strengths but protects them, bringing independent judgement, constructive challenge and wider experience.

The launch comes as family businesses face a demanding agenda. Succession, growth, the governance needed as they scale, and the wider planning made more urgent by the reforms to Business Property Relief and Agricultural Property Relief all call for clear thinking at board level.

Paul Andrews, Founder and CEO of Family Business United, said: “Ask the families who have thrived across generations what made the difference, and many will point to the moment they chose to invite an outside voice into the room. That decision is rarely easy, because opening the boardroom to someone from outside the family can feel like a step into the unknown."

"But with succession and the reforms to BPR and APR firmly on the agenda, the case for independent perspective has rarely been stronger."

"I hope this guide prompts an honest conversation around board tables across the country. The families that endure are those willing to keep asking whether their board is fit for what comes next.”

David Twiddle, Founder and Managing Director of TWYD & Co, said: "This guide is important for family firms considering the appointment of a Non-Executive Director. The value of an appointment depends far more on defining the need properly than on finding an impressive CV, and families who agree why they need a NED before they start searching tend to make the strongest appointments.”

The guide covers:

• The roles a great NED plays, from constructive challenger and guardian of good governance to steward of succession, honest broker and mentor to the next generation

• Finding the right person, including the qualities that matter most and why independence of mind outweighs comfort and familiarity

• Appointing a NED, from agreeing the mandate and running the search to assessing candidates, setting the time commitment, fees and terms, and planning the first year

• Changing long serving board members, one of the most sensitive parts of board renewal

• A glossary of governance terms and a step by step checklist for employing a Non-Executive Director

Insight Guide: The Value of an Outside Voice is available here to download.