We are delighted to announce that Edouard Thijssen has been inducted into the Family Business United ‘Family Business Hall of Fame,’ which recognises the exceptional contribution of individuals and their work in advancing the field of family business. Edouard is the founder and CEO of Trusted Family, the leading digital governance platform for multi-generational family businesses and family offices. At the age of 21, he realised how difficult it is to stay together as a business family in the long term and to remain successful over the generations. As the family grows and spreads out in different cities or countries, how can a business family make good group decisions and keep everyone aligned? Edouard developed a digital governance platform and mobile app for his own family business, together with a friend from another Belgian family business. They quickly found out that many other family companies around the world had similar needs, and they turned it into a company called Trusted Family. Today Trusted Family works with many of the world’s leading family businesses and family offices. As Paul Andrews, Founder and CEO of Family Business United adds, “Edouard has been a key pioneer in the area of family business communication and governance over the years and truly deserves his place in the Family Business Hall of Fame.” As Edouard concludes, “I am truly delighted and honoured that my work has been recognised by Family Business United and gained me recognition as an inductee into the Family Business Hall of Fame.”

We are delighted to announce that Peter Englisch has been inducted into the Family Business United ‘Family Business Hall of Fame,’ which recognises the exceptional contribution of individuals and their work in advancing the field of family business. Peter is an avid challenger and supporter of family businesses to create their legacy and deliver on their responsibility. Peter is PwC’s Global Family Business Leader. Influenced by his personal family business background and with 30 years’ experience in supporting international and national family businesses, he and his team supports clients to solve sensitive family business issues including succession planning, next generation development, corporate, family or wealth governance as well as philanthropy and impact investing. He is the author of several family business, family office and growth strategy related publications as well as a regular speaker at family business and family office conferences. Peter is also board member of the Family Firm Institute (FFI) and engaged in various non-for-profit organizations. He is Certified Public Accountant and tax advisor in Germany, US Certified Public Accountant (CPA) and holds a Master’s degree in Economics from the University of Münster, Germany. Finally, he was recognized by Family Capital Publishing as Global Top 100 Family Business Influencer in 2021 and 2022. As Paul Andrews, Founder and CEO of Family Business United adds, “Peter is a great advocate and ambassador of the family business sector and has developed a fantastic family business presence over the years and deserves his place in the Family Business Hall of Fame.” As Peter concludes, “I strongly believe in entrepreneurial family businesses as a force for growth, innovation, prosperity and good. This is why I am passionate about this sector and supporting them to deliver on their responsibilities as owners as well as managing their family dynamics.” “I am very honoured for being invited to the Family Business Hall of Fame. This means a lot to me as it indicates that my work over the past decades has been recognized and valued.”

We are delighted to announce that John Broons has been inducted into the Family Business United ‘Family Business Hall of Fame,’ which recognises the exceptional contribution of individuals and their work in advancing the field of family business. John Broons is a globally awarded family business expert and one of only three people in Australia to hold the coveted title of Fellow of Family Firm Institute (Boston, USA). John has dedicated his working career to answering the question: how do I guide and support families in business to a place where they’re thriving? Not only has John spent the last 40+ years answering this question, but he’s also been there and done it. Early in his career, John successfully bought and sold his own family business while maintaining close and connected relationships within his own family. One of the founders of Family Business Australia (FBA) in Victoria and a former FBA board member, he has a certificate and advanced certificate of Family Business Advising. John has been awarded The Executive Connection’s (TEC) Gold award ten times (from 2012 to 2022) for his outstanding mentoring, coaching and facilitation of executive groups. In 2019/2020, he won the Australian National FBA Advisor of the year award. Using his Thriving Family Business© method, developed from decades of wisdom and insights gained from working with family businesses, John consults globally, always with the aim of working with families to create a thriving family business. As Paul Andrews, Founder and CEO of Family Business United adds, “John is an exceptional individual who has worked tirelessly over the years to support the family business sector and deserves his place in the Family Business Hall of Fame.” As John concludes, “I became involved with family business issues in my family’s 3rd generation business. There is so much that is not known by so many families that with education and positive support and feedback these families can thrive. The work I do goes deep into my soul knowing I can help these families in business to thrive and it is an honour to have worked with so many family firms over the years.” “I am truly delighted and honoured that my work has been recognised by Family Business United and gained me recognition as an inductee into the Family Business Hall of Fame.”

As an organisation Family Business United (‘FBU’) is all about championing the significant contribution made by family firms through income generation, employment and wealth creation, not forgetting their contribution to the communities in which they operate. Our purpose is to raise the profile of family firms and to dispel the myths around them, recognising them for the impact that they make daily on a local, regional, national, and in some cases, international level. Family Business MATTERS is the latest campaign launched by FBU to make people realise the impact of the sector. The facts and figures show their importance. Did you know? It is estimated that family businesses in the UK generate around £2.0 trillion in turnover annually (1) Family businesses are significant employers, employing around 14 million people (1) Family businesses represent around 86% of all private sector employees (1) There are around 5 million family firms in the UK today (1) Family firms employ around 51% of the private sector workforce in the UK today (1) In 2019, family businesses contributed £637 billion to UK GDP (1) Family businesses in the UK generate around one third of UK GDP (1) The Top 100 family firms in Scotland generate revenue of around £20 billion annually (2) The Top 100 Scottish family firms employ over 112,000 people (2) The oldest family firm in the UK is RJ Balson & Sons who are based in Bridport and date back to 1515 (3) The oldest family firm in Scotland is John White & Sons who are based in Auchtermuchty and date back to 1715 (4) The top ten UK family firms generate annual turnover of £49 billion Some of the largest family firms in the UK include JCB, Arnold Clark, Euro Garages and Pentland Brands Britain’s Top 100 family businesses now employ over 750,000 people (5) Britain’s Top 100 family businesses are all very substantial enterprises with an annual turnover of at least £500m (5) Family firms really are the engine room of the UK economy and that is why Family Business Matters! Notes: Note 1 – Source: The UK Family Business Sector Report 2020-21 Note 2 – Source: Family Business United Research, The Top 100 Scottish Family Firms Note 3 – Source: Family Business United Research, The UK’s Oldest Family Firms Note 4 – Source: Family Business United Research, Scotland’s Oldest Family Firms Note 5 – Source: Boodle Hatfield Report, The Third Pillar of the UK Economy

As we enter deeper into the 21st century family businesses have a world of opportunity in front of them but need to take stock and act accordingly. The world is changing so it is important for family business owners/leaders to recognise that things are changing and to consider the impact that these may have on their businesses, this week, this year and in the years that lie ahead. Those that take a long term strategic view, and the emphasis is clearly on strategic, will undoubtedly be better placed to survive and thrive for generations to come. The CEO of tomorrow’s family firms will need different skills to the CEO of today and ‘yesteryear’ and whilst it is an obvious statement to make, time needs to be give to addressing the future skill needs of the next generation of leaders so that they can gain the skills now, and not be playing catch up later on. Obviously the past couple of years have been tricky with economic and political uncertainty in abundance, and to a certain extent this will prevail whilst key macro decisions are being taken and implemented. But there are other changes taking place that should be on the family business radar, if they are not already. Climate change and sustainability, sustainable business goals, globalisation and the rise of the millennial generation continue to fill the media pages and these are just some of the signs of things to come. The High Street is suffering and the retail sector is changing almost daily, shopping habits continue to evolve and the continued growth of ‘home shopping’ is seriously affecting many family firms too. Add to the mix the inherent pace of change with technology and the rise of AI and robotics and things that may have been ‘out of reach’ may become game changers going forward. Consider the impact of new ways of doing things and the impact these may have, the role of drones, driverless vehicles and the like and how the family firm may need to adapt. Families also have to address the role of social media and the impact on their businesses or ‘real time’ marketing, brand voice and messaging and how this may impact on their business and customer engagement going forward – not easy by any means and something that some find a lot harder than others, but social media is here to stay and will need to be part of an ongoing communications plan for all family businesses to explore and address. The family business world is also facing changes to the very nature of the family firms as more and more families are approaching key stages in the transition of their business to the next generation and notoriously over the years succession planning and such transitions have been difficult and trying times for many. Given the rate of change in the world at large, the worlds in which family firms operate, time needs to be used wisely and not spent focusing on internal matters. There is also the need for the right people and with a near fully employed workforce, recruiting and retaining the right people to meet the ongoing and future needs of the business will become even more critical but families have the benefit of their history and heritage that can come to bear in this regard. Research suggests that people are attracted to family firms with the right roles, opportunities for growth and empowerment to do their job so by their very nature, family firms can have an advantage when it comes to finding the right people with the right skills going forward. Communication is also key. Open and honest conversations underpin the very essence of family businesses and families and their broader management team are encouraged to take time to reflect on where their journey is taking them, considering what is the purpose of the business and where their journey is going to end up. Collective, shared vision and purpose is essential as family firms continue to embrace the changing world around them as is the need for clear communication within a family and within the family firm, empowering boards, management teams and employees to contribute to the underlying goals and ambitions of the family. Family firms that have already survived for generations prove that longevity is possible and that with the right governance frameworks, strategies and conversations, plans can be put in place to continue to thrive. But it is not always easy and there is also a need from time to time to step back and look at the business going forward and take stock of some of the ‘bigger picture’ challenges that may also be serious opportunities for the family business too. The pace of change currently is fast but as a result family firms face opportunities as well as challenges. Family firms that will be successful going forward will be responsive to the opportunities present and deal with the challenges head on. One of the keys is taking the time to think of what the real challenges are and to plan for them appropriately. The next generation have different skills and can be of great value in developing new approaches and embracing new technologies and develop new approaches too so the need for conversations between the generations is crucial to assist the development of the right plan for the business. There are also pressures from regulatory bodies too and the need to ensure compliance with the changing nature of regulations, not least the corporate governance reporting that all private businesses need to have taken on board to some extent as well. The world is changing but family businesses have the opportunity to once again rise to the challenge but need to take the long term view and plan. As always there is a lot on the family business agenda but thinking strategically about the business and removing the barriers to take time out to work on the business rather than in the business is essential for long term success. As we enter the new decade, family firms should be encouraged to take stock and spend some time on their strategic vision and plans for the business, and all that entails, to help them move on with the next stage in their family business journey too. Time is something that is often in short supply but when it comes to the family business and plans for the future, finding time to think about the future will undoubtedly be time well spent.

Designed to be a one-stop location for security fencing products, the centre will hold large stocks of Palisade Fencing, V-Mesh Fencing and Gates as well as ancillary products including concrete postmix and security fixings. Located in Garforth, Leeds next to one of Naylor’s manufacturing facilities, the new centre is based on a separate site and includes a retail trade counter and offices. Jason Torvill at Naylor said: “Our new retail fencing centre is designed to give customers easy access to the full range of security fencing and gate products in one location. Benefitting from high stock levels and close proximity to our concrete fencing manufacturing site, the new centre will make it even easier for customers in Yorkshire and surrounding counties to obtain the fencing and related products they need at short notice.”

Scattered holdings with too many people involved, cousins in different countries running their own kingdoms in silos, & the changing environment of business can often get too complex. “If you cannot make it greater, at least preserve it. Do not let things slide. Go on doing my work and increasing it, but if you cannot, do not lose what we have already done,” said Jamsetji Tata to his sons on his death bed! This is the emotion, which most founders of Family Owned Business (FOB) worry about and yet are unable to help the next generation to achieve. FOB’s can be very complex for the next generation if they don’t understand the business. Scattered holdings with too many people involved, cousins in different countries running their own kingdoms in silos, changing environment of business, etc. can often get too complex. A desire to have their Presence in Absence is present in most founders & for that good succession planning is a must. Steward leaders understand and start planning about their legacy early in life. They ensure that the best of education is provided, and values/sanskars of the family are transmitted through different experiences to the next generation. Attendance on Sunday for lunch or dinner wherein all family members are present with each one tasked to do something small to make the whole event significant is compulsory. Rotation of such responsibilities prepares them for success, failures and team work, family marriages, founder’s day at the factory/office, hosting customers at home, meeting senior bureaucrats, diwali puja in office and these are all direct/indirect transmission of the business values and culture of the family. In India marriages are a big affair and have a community-meet kind of environment. Hosts spend months of planning to give it their best. With it also comes a lot of social pressure. Yet it’s great learning to make it better or manage things within a budget. A founder entrusted the 2 sons with almost equal abilities to manage different business verticals. Both performed well & there was a critical decision point where one had to be chosen as the next leader. Then came an opportunity for a large family wedding & he put them to test in a social setting. Both were asked separately of their plans. One of them did what he felt was right, outsourced most work to professionals and did not pay much heed to the opinions & sentiments of of others in the extended family. He felt times have changed and an open bar with a separate counter for non vegetarian food was a must. The other one took a different approach – he asked for suggestions & incorporated a lot of the family traditions with a modern wedding. Alcohol & non vegetarian food which was taboo in their community was to be kept out. For some who wanted some of that he provided it in another venue before the marriage ceremony. It was clear that he would be able to lead the team & keep them together and undoubtedly he was chosen. He was seen as someone one who would keep the family values intact & be able to deal with multiple factions much better than his brother. Visits to the office, factory and market place are a part of the informal training. At times an internship or small projects also build a lot of pride and passion into the next generation. I recall my friend’s grin when he was doing an IT project and his grandfather offered him his chair; pride was mutual. On the chair he listened to the views of people with intense curiosity & was more than courteous in his answers (maybe a rub off effect ). He did a live demo of his project & had succeeded in addressing the elephants in the room so well. His sitting on the chair also had unconsciously signalled to others that he was the future Boss! Story telling & dinner table conversations often rotate around things which impart lots of learning. Questions are answered and clarified; also at times values are imposed with long term discipline in mind. One day the Patriarch was asked why he left the Mercedes for other members to come to the meeting whilst he went in a smaller car. He smiled to say that he wanted to reach the meeting on time & since he was alone it was more economical & faster in traffic to use the small car, after all it was a machine used to carry people from one point to another. The use of the right machine for the right purpose at the right time is critical and was a solid message to deliver to the next generation. If its a customer visit he will use the Mercedes as its the FOB & first impressions do count. The value of money and the problems that money brings if not used with wisdom are explained thoughtfully. With changing needs I have seen many families that co-exist yet give freedom of choice to the members. Lifestyle needs are different and yet staying together means so much automatic learning. In India we have KARTA – the head/custodian/trustee of the family, normally the eldest male who by seniority of age runs the show. Active ones can do much & the passive ones just let the opportunity pass. Lifestyle changes have different people wanting / having different desires. One wants to travel, the other buy’s solitaires and someone wants the best food. The Karta outlined a plan wherein all personal expenses were to be borne by respective personal accounts for lifestyle needs. At a family value proposition no one was allowed to borrow money for any lifestyle need. Any medical or educational need out of the ordinary was to be fulfilled with a majority vote through a family trust although the KATRA would have a VETO! Active ones, knowing that they are going to give up power & position, command control in the larger interest of the family for generations. They keep communication open, allow for peaceful co-existence of different people & ideas and have a balance of compassion & objectivity in decision making. They make way for the new generation by moving into the background pursuing their other interests like philanthropy, creative pursuits etc. They know when to HOLD & when to FOLD. Look at the Tata’s – Mr Ratan Tata planned succession objectively and got in Mr Mistry. He was groomed & on boarded well. Yet after a few years when it was felt that things were not moving in the right direction he deliberated and took the hard step of ousting him. Mr Mistry held on & then folded back. Now I hear he asked for the Tata Sons board to be sacked for non performance…let’s see what the future unfolds. Both in my personal view are good human beings and are working in the larger interest of the business house of Tata’s. What the future Unfolds or happens next only history will tell but I hope peace prevails in Bombay House. Stewardship demands a lot of sacrifice and putting others ahead of you. Succession is one such issue which can make or break the legacy of a Steward if not handled well. About the Author - Naveen Khajanchi is a practising Executive Coach supporting senior level leaders to transform and adapt to the current business environment. He has worked with organisations from start-ups to high-end real estate consulting. Today, he leads a search firm that helps top Indian corporations in their leadership hiring. Naveen has more than two decades of experience in Talent Acquisition and is also the author of Evolutionary leadership – A Holistic Perspective.

Effective governance involves people working together in a system, yet governance is too often approached in a purely legalistic or box ticking process-orientated way. Strong emotional and interpersonal connections, along with the culture this helps to create, make boards more effective and helps them to deliver good governance. In fact, effective governance demands three fundamental human characteristics that are the currency that keeps the system working well. They are trust, respect and honesty. All attributes of people! Additionally, it’s important to recognise it’s the dynamics of the group – the way that they interact and the way that power manifests in the social system that is our governance – that has an enabling or constraining impact on how well governance works. Therefore, boards ignore the human factors of the system that is governance at their peril. Challenges Due To Reduced Opportunity To Meet In-Person Unfortunately, the move to the virtual world, the growth in hybrid working and the challenges of meeting ‘in-person’ have made relationship building between those on the board increasingly difficult. This makes it harder to assess nonverbal communications and has reduced the opportunity for spontaneous ‘corridor’ or ‘kitchen conversation’ interactions where governance and other issues can be informally raised and advice dispensed. The Importance Of Emotional Intelligence It’s why directors are required to be emotionally intelligent today, so they generate good relationships with others on the board, and beyond. By being emotionally intelligent they are empathetic and have self-awareness when communicating; enabling them to build engagement, generate trust and respect, and provide leadership. For example, a chairman with emotional intelligence will evolve away from a traditional command and control style to a more facilitative leadership. This will see them construct and nurture a board culture of psychological safety, where bad news travels to the board faster than good, where directors have the courage to constructively challenge, and where it is fine not to have all the answers, particularly during these difficult times. Challenging assumptions is very important during a period of volatility, when decisions need to be taken quickly. Only then can the board have assurance that they are on the right path and governance is as it should be. Relationship Between The Chairman And CEO Due to the enormous impact it has on the performance of the business there must be role clarity and mutual respect at the foundations of the most important relationship in the governance system – that between the chairman and the CEO. To be a value adding relationship it needs to be one built on trust and where there’s candour and honesty on both sides, which is where emotional intelligence comes in. It’s those who operate with emotional intelligence who will reflect on how well the relationship is working, and take the opportunity to recalibrate, where required, to ensure that the rapport is an asset to the board and the organisation. Culture Emotional intelligence plays a very important role in helping the board to foster a positive company culture. This encourages healthy day-to-day attitudes, ethics, behaviours and ‘ways of doing things round here,’ that sets the foundations for real, tangible business growth. During these complex and uncertain times there are four pillars of culture that engender business success and good governance, all associated with the board being emotionally intelligent. 1) Agility and adaptability. To achieve this boards need to promote an entrepreneurial spirit which will help unleash the potential of their people to create new ideas to take the business forward. Boards need to engender a curiosity and fearlessness to inspire creativity, innovation and continuous improvement. As part of being emotionally intelligent boards must lead by example by demonstrating diversity of thought and ideas in the boardroom, so the rest of the organisation has the confidence to follow suit. 2) Resilience. To bounce back after setbacks and be in a position to deliver growth it’s emotionally intelligent boards that have robust, transparent and visible leadership, to help ensure engaged and empowered employees. 3) Moral courage. Building on from resilience it’s emotionally intelligent directors who are courageous in confronting reality and dealing with problems with integrity. They will create a culture of psychological safety to protect those employees who do speak up, and encourage them to do the right if sometimes difficult thing. 4) Candour . It’s those organisations with an open culture where bad news comes to the board more quickly than good which can quickly focus on and solve challenges before they potentially become bigger issues. Ticking off a set of legal requirements is not the way to deliver effective governance. Good governance relies on positive relationships between those on the board and the culture they generate, which requires directors to have emotional intelligence. This enables directors to gain trust and respect on the board, and throughout the organisation, enabling them to deliver effective governance in today’s increasingly hybrid working world. Additionally, having an emotionally intelligent board is vital in helping businesses to navigate uncertain times and drive long term profitability. About the Author - John Harte is the Managing Partner at Integrity Governance and leads a global team that is focused on making boards more effective. A boardroom expert working with multinationals and SME’s, he provides practical, impartial advice to directors, business owners and CEO’s to help improve performance. He is a regular speaker and thought leader on board effectiveness, practical governance and business disruption. John grew up in a family business and his extended family run fifth generation businesses and he has also served as a board member, chairman and adviser to many family firms. He also worked within Mars, a globally recognised family business for the best part of a decade.

Volatility and uncertainty remain as the world emerges from the Covid emergency, with the war in Ukraine, disruption of supply and distribution due to sanctions, soaring inflation, the prospect of recession and murky geopolitics. For boards serious about navigating these challenging times they need to have a chair who takes the appropriate steps to ensure they remain an effective decision-making and value adding asset that drives long-term business growth. To this end, the chairperson must deliver: Role Clarity This is the foundation of an effective board. Good chairs clearly understand their role in helping the board to add value to the organisation, the demarcation of responsibilities between themselves and the CEO, and ensure each director is clear on their role in contributing to the work of the board. They also ensure board clarity on where their role ends and that of management begins. Any ambiguity and confusion over roles on the board, particularly in a volatile world, will have a negative impact on board effectiveness and decision making. Additionally, chairs should have clarity about the value they add in leading the board, which includes board composition, workplans and calendars, that reflect this value delivery. Agile Boards It’s critical that the chair understands the importance of agile and adaptable boards at this time of significant upheaval. Good chairs recognise that what worked well during the Covid crisis might not work so well today. Therefore, it’s vital the chair engenders an adaptable and agile board as their business navigates its way through these uncertain times. Future Strategy The chair needs to focus the board on future strategy – how the organisation can achieve its purpose during these uncertain times – by looking at new opportunities, rewards, as well as the risks. To achieve this they need to make future strategy live in the boardroom – not something the board focuses on once a year. Challenge Assumptions Boards can too often make decisions based on assumptions, which can be very damaging for their organisation. This is particularly the case when it comes to the interplay between the three critical elements of risk, strategy and return, which can too often be based on assumptions. It’s the role of the chair to ensure that assumptions are challenged to validate their relevance. Only then can the board have assurance that they are on the right path. Being challenging in this way is particularly important during periods of volatility. Emotional Intelligence In an increasingly virtual and challenging world there’s a need for adaptable, agile leadership. This requires the chair to evolve away from the traditional command and control style to a more facilitative leadership – one that embodies emotional intelligence. This sees chairs create and nurture a board culture of psychological safety, where bad news travels to the board more quickly than good, where directors have the courage to constructively challenge, and where it is fine not to have all the answers, particularly during these difficult times. Relationship With The CEO The most important relationship in the governance system is between the chair and the CEO, due to the enormous impact it has on the performance of the company. The foundation of this relationship (as I’ve already touched on) is based on role clarity that the chairperon is the leader of the board and the CEO is the leader of the business. If it’s to be a value adding relationship it also needs to be one built on trust and respect, where there’s candour and honesty on both sides. Forward thinking chairs reflect on how well this relationship is working and take the opportunity to recalibrate, where required, to ensure that the rapport is an asset to the board and the organisation. Appropriate Board Composition? It’s up to the chair to consider whether the current composition of the board is the right one to take the organisation forward and ensure it is fit for the future. This involves looking at their board through the prism of the five drivers of diversity™- demographics, skills, experience, thinking styles and circles of influence – and contemplate how well the current line up matches up. True board diversity is broader than any one of the five drivers™ and delivers wider perspectives, improved decision making and outcomes. With the rapid pace of change in the technology and digital worlds, and its impact on business, it’s important to recognise that boards need directors with the skills and practical experience in those areas. Only then can they realise the opportunities for their organisation. To be effective, the chair needs to: Embrace The Technology While ‘you are on mute’ was the term of 2020, most boards have now adopted processes and ways of working that demand the leader of the board is adept at using technology for meetings. Manage Reviews Of The CEO And Directors In crisis mode during the health emergency many organisations stopped undertaking reviews of those on the board. If they have not already done so, it’s the time to re-start them. Those on boards derive substantial benefit from a structured and systematic performance review at least annually, with clear accountability and follow up. As it’s the role of the chair to ensure that the board, CEO and even themselves are ‘fit for the future’, they must lead and manage the review process. Any review must deliver a 360-degree evaluation of those on the board. It’s the best way to find out if they have the capacity, capability and culture to deliver success for the organisation in the future. Once complete, these assessments might prompt the board to consider if a different director is needed to improve effective decision making and help drive business success. Planning For Succession To maintain business continuity undertaking succession planning for the CEO, themselves and board members, is a key focus for the chair. The chair and the board not only need to prepare well in advance for planned departures, such as retirement, but also unexpected ones, such as due to illness, or not being up to the task in hand, post review. This avoids the potential for disruption to decision making by the board, and reduces the risk when recruiting a new director. The succession plans for all on the board need to be reviewed annually, to ensure the right leadership team is in place, so it can achieve its purpose. Director Onboarding The chair needs to take the lead in the planning and implementation of a thorough induction for new starters to the board. This involves a bespoke “journey of learning” that should unfold over 18-24 months. It must include formal governance and company specific governance training, organisation, customer and sector experiences, and an effective buddy system. Taking this approach helps to ensure that new directors make a valuable contribution to the board as quickly as possible – vital during challenging times – and bring the onboarding process into the 21st century. It’s no longer acceptable to dump a pile of reading material on a new director and expect them to hit the ground running. By taking these important steps chairs will ensure their board continues to be an effective decision-making asset that drives business growth during these volatile times. Those chairs that require a 360-degree review and / or training to help them deliver effective boards, or support with wider governance matters, should contact our highly experienced team. About the Author - John Harte is the Managing Partner at Integrity Governance and leads a global team that is focused on making boards more effective. A boardroom expert working with multinationals and SME’s, he provides practical, impartial advice to directors, business owners and CEO’s to help improve performance. He is a regular speaker and thought leader on board effectiveness, practical governance and business disruption. John grew up in a family business and his extended family run fifth generation businesses and he has also served as a board member, chairman and adviser to many family firms. He also worked within Mars, a globally recognised family business for the best part of a decade.

Family-owned businesses are significant creators of wealth, employment and opportunity in our communities. A successful family business can continue to thrive for generations, but the nature and complexity of many such organisations demands effective governance to enable sustainable intergenerational value creation. Additionally, the pandemic has created uncertainty that reinforces the need for boards to be fit for the future and be well equipped to successfully seize opportunities for their business. Good governance is at the heart of this. Role Clarity Good governance starts with role clarity on the board. Unfortunately, the separation of roles of the owners, family, management and the board can sometimes become blurred in a family run organisation. Passionate owners and family members can be tempted to get involved in many aspects of the business, from decision making on the board to day-to-day management. It is family boards that have a clear understanding of how they will work to add value to the company that will be most effective. In particular, in helping to steward the creation of value and demonstrate this through their contribution to the board. Diverse Board Composition The board of directors at a family business has to be able to see the “wood for the trees” and this is where separation from the day-to-day management of the organisation becomes critical. The recruitment of external directors that can bring the perspective of distance, additional skills, different demographics, experience, thinking styles and circles of influence can add significant value to the boards of family run firms. Recruiting incompetent directors or directors that are friends or family but simply don’t have the skills, perspective and calibre to be effective is one of the most common and expensive mistakes that can be made. Effective Processes Good boards have four lines of sight and enact effective processes to ensure that each perspective adds value: Oversight : Boards at family-owned businesses must have processes in place to ensure effective oversight and accountability. Insight : Effective boards understand the company, the financial engine and competitive edge of the organisation and the external business environment. This insight drives a more objective and enabling assessment of performance and strategy. Foresight : The ability to anticipate, to see what is coming and the future forces that will impact the competitiveness and sustainability of the business is critical to effective understanding of risk and development of strategy. Hindsight : Effective boards can bring significant company and family knowledge, the hindsight to remember previous initiatives and reflect on the good, bad and ugly learnings from the past. Additionally, the board has a critical responsibility for ensuring proper processes are in place to review the leader of the management team, the CEO – a role that has been under huge pressure during the pandemic. It’s essential that there are effective processes in place to evaluate their performance, succession and transition. Boards at family businesses must also ensure the processes for selection, appointment, induction, review, succession planning and exit of directors remains effective, so the board remains fit for the future. Strong Board Relationships Relationships between board members, the board and the owners of a family business as well as the management team, particularly the CEO, must support the creation of value. Ideally boards will leave the family baggage out of the family business and, in particular, the boardroom. Boards must also have good relationships with management, with the company secretary and key stakeholders. The most important relationship in the governance system is between the chairman and the CEO. It must be built on honesty, candour and should be a relationship where the chairman and CEO are friendly but never ever seen as friends. Culture A good culture aligned with the values of the family and the business is critical for a successful organisation. Effective boards recognise that they are both custodians and shapers of the culture at their business. Custodians take the valuable and good parts of the culture forward to future generations, while shapers evolve the culture to remove elements that are not fit for the future. Governments, employees and regulators are all increasing their focus on culture. The role of the board in building culture is important with the risk that directors will become increasingly liable for poor company culture, which can lead to misconduct and damage to the reputation of the company, the family owners and the board. Family businesses are different to other businesses in a number of ways, but one thing that is not is the importance of delivering good governance. Doing so can add significant value and help any company better navigate the minefield that is business. Boards at family-owned organisations must therefore sweat the governance to ensure they are effective and fit for the future. This requires role clarity, the right skills and diversity on the board, having effective processes in place, strong relationships, and a good culture aligned with the values of the business. About the Author - John Harte is the Managing Partner at Integrity Governance and leads a global team that is focused on making boards more effective. A boardroom expert working with multinationals and SME’s, he provides practical, impartial advice to directors, business owners and CEO’s to help improve performance. He is a regular speaker and thought leader on board effectiveness, practical governance and business disruption. John grew up in a family business and his extended family run fifth generation businesses and he has also served as a board member, chairman and adviser to many family firms. He also worked within Mars, a globally recognised family business for the best part of a decade.

In today’s turbulent world undertaking board reviews is a vital part of good governance practice. As well as enabling performance to be assessed they provide an opportunity to move beyond basic compliance to pose the standout question “how fit is the board for the future?” Unfortunately, reviews of the board and individual directors are too often undertaken as a tick box exercise. They are viewed as yet another task to strike off from the governance to-do list. When implemented effectively reviews are far more than about compliance. They offer the opportunity for reflection, assessment and questioning of whether the board and its performance are fit for purpose. Best practice reviews are those that focus on powering performance and are undertaken regularly to prompt a periodic re-examination of how fit for the future the board or director is. After all, funders, investors, donors, regulators, the chairman, and in fact all directors, want to have assurance that the board has the capacity, capability and culture to be effective, with best practice governance processes in place. This includes having confidence that the board is adding value while effectively meeting their objectives. This poses the question – how can you be certain that the board as a whole, along with individual directors, are operating effectively? The answer is to commence an assessment to be aligned with the values and purpose of the company, which are firmly embedded as a robust, repeatable value adding process that they – the board – lead. It simply can’t be a token effort to justify putting a tick in a compliance box. The next question is how can board and director reviews that power performance be effectively delivered? Prior To A Review – Understand The Context Before any review it is vital to know the context of the board, organisation, leadership and sector. Also, consider the desired outcomes you want the process to deliver, the value it will add to the company, board and each director, that will aid the organisation to meet its objectives. Stage One: Gather Data The first step of the evaluation process is to review the relevant documentation. This requires examining documents about board establishment, function and processes. This information gathering should include board papers, agendas, minutes, workplans, committee charters or terms of reference. When appraising individual directors it needs to consist of documentation relating to their appointment, induction and development. The documents examined should also include the strategic, business and development plans, along with data obtained from any previous reviews, key performance indicators, cultural assessment or third party evaluations. The insight provided from this wealth of information enables directors to gain a better understanding of the review history of the board or individual, and assess how the board has handled the recommendations from previous evaluations. The next phase involves online surveys being generated and forwarded to all on the board. These must be personalised, reflecting the purpose and strategic objectives of the business and an assessment of the behaviours, skills, knowledge and impact of the director or board. If an individual director is reviewed these surveys must also be completed by their direct reports. It is imperative that the survey contains questions that identify how effectively the board is operating, which should highlight the non-value creating work of the director being evaluated, along with those on the wider board. Typically called the “white noise” of the board this non-value creating work saps productivity, frustrates participants and wastes time. As part of the online survey all participants should confidentially rate every area of the director’s and the board’s performance, and also raise any development needs. It’s experienced board reviewers who have a stable of tailored and generic questions that allow a balance of survey tailoring and customisation, according to the goals of the review. Surveys on their own are not enough. Interviews must be carried out post surveys to put flesh on the bones of what has been fed back, and provide a psychologically safe and confidential opportunity for issues that could not be effectively covered in online surveys to be explored. It’s an approach that delivers considerable value and quality assurance. However, interviews need to be managed by a trusted interviewer who is experienced in board dynamics and effectiveness. While it is time consuming to gather data in this way, it’s the best approach to acquire a comprehensive collection of qualitative and quantitative data to deliver a 360-degree performance review. The board can then move beyond specifically assessing performance against key performance indicators, to evaluating behaviours and ways of working. It also provides an opportunity for an objective review of achievements, behaviours, development needs and deliverables, which helps to power the performance of those on the board. Additionally, by taking this approach, you lessen the risk of an emotional, personality direct assessment, by infusing rationality and objectivity. Any evaluation must be candid, impartial and strictly confidential with the “psychological safety” of the director paramount. This can result in confidential and sensitive issues being identified as part of the review. Information such as this needs to be carefully considered when it comes to determining the insight to make public at the reporting stage. It’s essential confidentiality is respected. It is important to note that while some boards propose a board meeting observation as part of their review process, this significant investment in time and expense is of questionable value when the attendance of an observer will often alter the behaviour of the board. Stage Two: Reporting Once the data gathering is complete it’s time to present the findings to the board. Such a report will identify any divergence between the directors and the person being evaluated regarding their performance, as well the board as a whole with their performance in meeting their boarder objectives. This enables the board to spot strengths and opportunities to improve performance and personal development. This report brings clarity on deliverables moving forward, which could include training to aid upskilling, for example, or additional mentoring. It’s an approach that ensures both the director and the board are aligned with the company values and strategy. Reporting in this way ensures that there is no ambiguity and confusion over the roles of directors, which can have a damaging impact on board effectiveness and decision making. Instead, directors will have clarity on what their role entails and the value they need to bring to the board, which is critical in today’s volatile world. Stage 3: Follow-Ups & Accountability Accountability is where the review process commonly goes wrong, because too many boards implement a review then don’t have follow-ups. Regular “pulse checks” based on the feedback from the assessment must be undertaken throughout the year by the chairman and the board to guarantee progress and a strong performance, whether this is for an individual or the board as a whole. Waiting to have a formal review twelve months later is not conducive for an effective board. New Director? As well as help the board to clarify how to better support a director to improve their performance, an assessment may encourage them to replace the individual with a new director. This may be the best way to ensure the board has the best person in place to assist them in driving long term business success, and that the organisation effectively delivers on the business strategy. It’s why there has to be a succession plan in place for such an eventuality. An effective review is a vital part of the selection lifecycle of a board member, which includes succession planning, appointment, induction, review, development and a successfully planned exit. Independence And Credibility Of The Assessor It’s often assumed by directors that the company secretary or the chief counsel are well placed to lead the review process, because of their superlative legal and governance knowledge. However, they often lack the depth of insight into the dynamics and culture on the board. Very few professionals really understand the construct of the board, let alone how to spot opportunities to improve board effectiveness. Careful research is therefore required to source an assessor suitably qualified and experienced for the task. Doing so ensures whoever undertakes a review of the board or a director is trusted and respected. For optimum results with board and director reviews it’s vital that those undertaking them are independent and impartial, and not conflicted by recruitment or other consultancy roles with the board. There must be no agenda or the evaluation process won’t be objective or of value, and the performance of the board will not be optimised. The best solution is to bring in a highly experienced, independent third party assessor with a strong track record in effectively reviewing directors and boards, to ensure a valuable evaluation process that drives board performance. In Summary Undertaking reviews that power the performance of the board, and individual directors, is a very important part of the governance process. The way forward is not a hasty review of KPIs and past performance to tick a governance box. The entire process demands a long term commitment by the board to deliver thorough qualitative and quantitative data gathering, an effective reporting process and regular follow-ups, along with appropriate support. These should ideally be led by a highly experienced, independent third party in implementing such reviews. It’s an approach that will optimise individual director and overall board performance, which will help to ensure long term business success in these challenging times. About the Author - John Harte is the Managing Partner at Integrity Governance and leads a global team that is focused on making boards more effective. A boardroom expert working with multinationals and SME’s, he provides practical, impartial advice to directors, business owners and CEO’s to help improve performance. He is a regular speaker and thought leader on board effectiveness, practical governance and business disruption. John grew up in a family business and his extended family run fifth generation businesses and he has also served as a board member, chairman and adviser to many family firms. He also worked within Mars, a globally recognised family business for the best part of a decade.

The economic headwinds of spiralling energy costs, high inflation and increased interest rates will probably lead to a recession in many markets. As the global economy recovers from the pandemic, there are lingering issues with the global supply chain, a potential resurgence of Covid in the northern winter, along with the risk that the ongoing conflict in Ukraine could escalate. All this means volatility is set to be the ‘new normal’ as we enter 2023. This places tremendous pressure on organisations, particularly the CEO, to lead and manage the business, and deliver all-important growth. However, the CEO should not be left alone to devise all the answers. To secure the long-term success of their organisation the board needs to effectively support the CEO during these challenging times. The question is how? Clarity On Board Roles Clarity on the where the role of the board stops and that of the CEO begins is essential for an effective board. Ambiguity and confusion over the roles of the CEO and board directors, particularly in an unpredictable world, will have a negative impact on decision making and board effectiveness. It’s the role of the chair to provide clarity in this area and facilitate the discussion where the boundaries between board and CEO are unclear. An Enabling Board Culture Effective boards have a culture where bad news comes to the board more quickly than good, where there is constructive challenge and where the boardroom is a safe place for a CEO to say that “they don’t know”. It’s important for boards to consider whether their culture is an asset, enabling leadership and collective wisdom to help the CEO navigate through a complex set of circumstances. If the culture of the board is not enabling then the board may struggle to support the CEO in these difficult times. Board And CEO Only Time The role of the CEO is often a lonely one, it’s imperative to create the time and space for dialogue between the board and the CEO, with no other management present. It’s a tremendous opportunity for the CEO to share what’s on their mind and access the collective wisdom of the board. It is also an opportunity for the directors to consider how they can best support the CEO. This CEO and board only time allows the CEO to cover the successes since the last board meeting, the issues that are developing, what’s keeping them awake at night and canvass areas where they need advice, challenge or validation. This needs to be a regular board meeting agenda item. However, for the best advice, the board must comprise of a diverse group of directors. Board Diversity It’s widely recognised that diverse boards are more effective than those that aren’t. Therefore, the board needs to consider whether its current composition is the right one to support the CEO and take the organisation forward. To effectively do so they should look at their board through the prism of the five drivers of diversity™ – demographics, skills, experience, thinking styles and circles of influence – and contemplate how well the current line up matches up. True board diversity is broader than any one of the five drivers™ and delivers wider perspectives, improved decision making and outcomes. Have relationships That Are Fit For Purpose Trust, respect and honesty are three fundamental currencies that enable effective relationships between the leader of the management team, the CEO, and the board of directors. These currencies are vital when it comes to the most important relationship in the boardroom, between the chairman and the CEO, because of the enormous impact it has on the performance of the organisation. As well as having role clarity at the foundation of the relationship – that the chairman is the leader of the board and the CEO is the leader of the business – to be a value adding one it must be built on trust and respect, where there’s candour and honesty on both sides. Smart chairmen must reflect on how well this relationship is working and, where appropriate, recalibrate it to ensure that the rapport between themselves and the CEO is an asset to the board and the business. Agile Boards The pandemic underlined the importance of boards being agile. Agility and adaptably remain key today for those boards that are serious about supporting the CEO in responding to new challenges in a way that will ensure the long-term success of their organisation. Challenge Assumptions With the interplay between the three critical elements of risk, strategy and return commonly based on assumptions at board-level, the board must ensure that any assumptions, from the CEO or any director, are challenged to validate their relevance. Only then is it possible to have assurance that the right path is being taken – something that is particularly important when quick decisions are required during periods of volatility. Future Strategy Making sure future strategy is live in the boardroom, and not something to focus on once a year, is vital for any organisation to ensure it successfully navigates its way through these challenging times. Therefore, the board must keep the focus of the CEO on future strategy – how the organisation can achieve its purpose – by looking at new opportunities, rewards, as well as the risks. Review The CEO One of the most important roles of the board is in ensuring the CEO has the right skills and mindset to lead the business forward. As we enter 2023 it’s critical to have in place a CEO who is fit for the future. To ensure this the CEO needs to be regularly evaluated – a basic board hygiene process. At the conclusion of any review process there must be clarity, not only on the performance, but on the next steps in personal development for the CEO, with deliverables agreed by all parties. These can then be revisited and reviewed regularly to check on progress. After the Covid health emergency it’s time for boards to step up again to support the CEO during a new period of volatility. By doing so they will effectively assist the CEO in ensuring their organisation successfully navigates its way through a turbulent 2023 and experiences long-term growth. About the Author - John Harte is the Managing Partner at Integrity Governance and leads a global team that is focused on making boards more effective. A boardroom expert working with multinationals and SME’s, he provides practical, impartial advice to directors, business owners and CEO’s to help improve performance. He is a regular speaker and thought leader on board effectiveness, practical governance and business disruption. John grew up in a family business and his extended family run fifth generation businesses and he has also served as a board member, chairman and adviser to many family firms. He also worked within Mars, a globally recognised family business for the best part of a decade.