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.

The fallout from the COVID health and economic crisis demands high-performing boards. In these turbulent times boards are under pressure as never before, as they try to juggle future direction with oversight and accountability. This period of uncertainty is unlikely to end soon, as we start to extricate ourselves from the health emergency, that has become an economic crisis, which may also lead to significant social and political upheaval. Now we have entered 2021 the spotlight is trained on boards. Questions need to be asked on are they up to the task in hand? How fit are they for the future? How effective are they, and can they move from self-protection and value preservation to a mindset of value creation that will successfully seize opportunities for their business? There are five factors that will enable boards to deliver true value in this crisis: Role Clarity Role clarity is the heart of an effective board. While most directors respect the separation of the roles of the owners, management and the board, and understand the need to adopt a ‘directors’ mindset’, not many are familiar with the big question: how will the board steward the creation of value by the company? This is a question that will separate the wheat from the chaff in 2021. It’s those directors that have clarity about how they will steward the creation of value and demonstrate this through their board and committee workplans, calendars, and be accountable for value creation in their board reviews who will be exemplars. Board Composition It’s always necessary to tailor the composition of the board to add value to the buisness. As part of this remember that each board seat has a ‘cost per seat’, which means every director and chairman should ensure that the contribution of each director exceeds their cost. Importantly, for the board to be fit for the future, it needs to adhere to the five drivers of diversity™: demographics, skills, experience, thinking styles and circles of influence. Boards need to constantly ask how fit is their board composition for the future? A good board balances past, present and future. The time for “Jurassic boards” populated with dinosaurs is over! It’s effective boards that understand diversity does not come at the cost of merit and that diversity without inclusion is simply a box ticking illusion. They also recognise and are well equipped to deliver value in their four lines of sight – oversight, hindsight, insight and foresight. Effective Board Processes Boards must have effective processes, for example, oversight and accountability, to ensure delivery on its past and present orientated roles. This is just as important on its future focused value creation roles of strategy and policy. There are a number of crucial board processes to focus on in 2021, which include: Assurance : have assurance, whether from unconflicted third parties and internally, that everything is in place to ensure that the board is exceeding oversight expectations. Director specific : many things have gone virtual since March 2020, including director recruitment, induction and engagement. Directors are missing the ‘coffee, corridor and cab’ conversations that are lost with meetings online. Boards need to ensure that their director specific processes of gap analysis, specification, selection, appointment, induction, review, succession planning and exit are not weakened by the move to virtual. Also, to be ‘fit for the future’ there needs to be particular focus on the selection, induction and review processes. CEO specific : the crisis has clearly revealed those “leading light” CEOs who have shined as well as the weaknesses of those CEOs who are “simply light”. This is driving increased focus by boards on robust, repeatable and objective approaches to CEO evaluation, performance, succession and transition. Risk and strategy : when the pandemic arrived too many boards were simply blind to critical business risks. They were also hampered by risk processes that were academic, impractical and in some cases simply unworkable. It’s effective boards that have started to challenge their understanding of risk and therefore their risk appetite. Many are demanding higher levels of board engagement in the inter-relation between risk, return and strategy in a Covid world. Relationships Boards can get caught up in a legalistic or process orientated approach which means critical human factors that drive board effectiveness – relationships and culture – are commonly ignored. It is effective boards that ensure their relationships support their role in stewarding the creation of value. By far the most critical relationship in the governance system is between the CEO and the chairman. In most instances one or the other will leave if this critical relationship is dysfunctional. However, the board must always look at the spectrum of its relationships and ensure those with management, between the board, with the company secretary and, in particular, with key stakeholders are effective to enable the success of the organisation. Culture Culture is an issue that many boards struggle with. We have identified three populations on the boards that we work with: The Jurassics : to them culture is the latest fad which will pass, like total quality management and mindfulness. The restless : they have recognised that culture is important, but just don’t understand, or know what to do or how to deal with culture as a board. The effective enablers : these are directors that not only recognise the importance of culture but actively engage in shaping and directing it. Which of these characterisations best describes your board? Effective boards acknowledge that they are responsible as custodians of culture – keeping, protecting and nurturing the good things, the ‘assets’, in company culture. Secondly, boards need to address where the culture is not appropriate and needs to change to meet current, let alone future expectations, and be ‘fit for the future’. This makes it vital that the board acts as the “shapers” of the culture. Effective boards enact their role in culture by inspiring it, ensuring alignment, demonstrating authenticity by both reflecting and demonstrating the behaviours implicit in the culture, while guiding, encouraging and assuring themselves about it. The impact of the pandemic has demanded three key success factors for effective boards – adaptability, courage and candour. For evolutionary success adaptability is key, and this is now demanded of our boards and businesses as we navigate the COVID age. Today is also the time for directors to be courageous in confronting reality, plus the need to evolve to ensure success. Finally, a culture of bad news coming more quickly to the board than good news is critical for candour, accountability, honesty and success. Most directors are aware of the consequences of poor culture, from misconduct in financial institutions through to the debacles where there was a major disconnect between the behaviour that was promised and what was actually delivered in organisations. As a result, governments globally are increasingly looking at legislating to make directors liable for company culture, something that further amplifies the need for directors to take culture seriously. The challenges organisations face today demand effective, high-performing boards and individual directors. Those that are lacking in any one of the five drivers of board effectiveness will struggle and will endanger the future long-term success of the companies they lead. During these tumultuous times boards must urgently consider these five factors if they are serious about surviving, thriving and driving 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.

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.

Nottinghamshire-based large format print business, Prosign Print and Display, is celebrating attaining not one but two prestigious ISO quality marks. Going through the accreditation process was hard work, but the results speak for themselves. The company can now proudly boast to having both quality management standard ISO 9001 and environmental standard ISO 14001 - a huge achievement for this family run business. It was supported throughout the certification, by ISO specialists IMSM. Prosign, based in Moorgreen, specialises in large format printing, point of sale material, packaging, exhibition and signage, and has more than 25 years’ experience in the field. Steve Hardy and his son Connor are Directors, while Steve’s wife, Angela, is Office Manager, heading up a team of 13. The company has a number of high profile clients, including Rab, Lowe Alpine, Canon, Rolls Royce, Jet2, Oakley, Arai, Alpkit and Slimming World. Although it works directly with customers, it also offers a trade service to other printers who lack the equipment or knowledge of Prosign; its USP is to take difficult, or seemingly impossible, projects and turn them into fantastic printed material. “It was my own passion for the environment and a desire to prove to myself that we were good enough that was the driver in getting the ISOs,” said Steve. “We have always had this sustainable approach, and constantly try to direct clients towards greener print options." “Now we have achieved the certifications I can look back and see the huge benefits that it has brought to our business. ISO really does make you think about what you are doing and helps to change your mindset, which can very often get stuck in ways that you have just become accustomed to." “We refer to the ISOs in all our marketing, and we bring it up with new customers as a reason why they should use us. It is an excellent sales tool!” New ways of working have been introduced, thanks to ISO. For example, supplier orders have been consolidated, so Prosign now purchases more from one supplier, which cuts the number of daily deliveries, sometimes from four down to one. This not only reduces emissions but also to reduces the amount of downtime needed to unload one lorry compared to unloading four lorries coming from different suppliers. Steve said: “We learnt that just because we have done something for so long and it works well doesn’t actually mean that it can’t work better, and ISO has helped us to identify these areas." “We are now proudly flying our ISO flag very high and can confidently show that we are a company which cares not only about the quality that we produce but also about our environment, and the ways that we can help and advise our clients on reducing their environmental impact.” Steve said IMSM had been instrumental in helping Prosign through the ISO process and now the ISOs are in place, their management and continuing conformance, is straightforward and also critical in keeping the business on track.

Family firms are the engine room of the national economy and those running them are passionate, motivated and entrepreneurial in their outlook. Family firms are also different to their non-family counterparts who may be driven by short-term financial performance, the need to stimulate growth, better shareholder returns and performance in line with monthly, quarterly and annual targets. Financial performance of all businesses is crucial to long term sustainability but it is not uncommon to find different values permeating family firms and their strategic direction. It is not always about financial performance or profit growth. Family firms are recognised globally for their long term view, the stewardship or the custodianship of the firm for generations to come, so as part of the Family Business United 2022 National Family Business Survey, we looked into the key drivers of family businesses today. The key drivers for UK family businesses are: To be seen as a good employer and somewhere people want to work To protect the business to ensure it is profitable and sustainable going forward To manage reputation and brand To provide and safeguard jobs in the wider community To pass the business on to the next generation in a better state than when it was taken on To be philanthropic and support causes that reflect our underlying family business values To act as custodians of the business for future generations To become sustainable environmentally and meet our net zero ambitions To make sure the business does not fail under our watch To create a business that attracts the next generation of family members As Paul Andrews, Founder and CEO of Family Business United explains, “Performance over the long term is important for the sustainability of the business but for many family firms it is also about people, family and non-family alike. Family firms are driven by their leadership teams and providing the right environment for them to work together and being seen as a good employer, an employer of choice, is clearly very important to them. Many family business owners have their family name above the door too and it is not surprising that managing reputation and brand is close to the top of the drivers for them, as their name, the family and the business are so intrinsically linked.” “Family firms are at the heart of communities the length and breadth of the country and their impact should not be under-estimated. Not only do they provide sustained employment, generate income and create wealth, locally, regionally and nationally, they are hugely important in terms of the communities in which they operate.” “Family firms donate to local charities, support grass roots sport, provide support to different sectors of the local population, care for the environment and make a difference on so many levels. It is some of these actions that contribute to the culture of family businesses and help to attract, retain and provide opportunities for their staff too. Family businesses matter and it is no surprise that being seen as a good employer and a business that people want to work for is top of the list of drivers for those running businesses today,” concludes Paul. As Lyn Calder, Edinburgh Managing Partner & Head of Family Businesses at AAB, sponsors of the 2022 Family Business Survey adds, “Family businesses are important in so many ways and are the very heart and soul of communities across the country. It is their values, purpose and culture that stands them apart from other organisations and becomes a great way to recruit staff for their businesses. Working with family firms we regularly have conversations about the long service of staff, many serving in excess of 20 or 30 years, and it is also common to see generation of families having worked for the same business, increasing the links between local families and local family businesses.” “Family businesses survive for many generations too and as we have seen in the past couple of years during the pandemic, they have looked after their staff and placed staff health and wellbeing firmly on the agenda. People are what make family firms and those that have survived for generations continue to adapt and evolve over time, developing best employment practices and focusing on their brands too." "Family firms are so important in so many ways and it is their forward-thinking, long-term approach and core values, governance and communication that help them stand the test of time. We work with some great family businesses and see the drivers identified by family business owners across the UK as important on a regular basis. They are a real point of difference and can provide significant competitive advantage to family businesses too and given the current challenges with recruiting staff, are likely to become more important as a differentiator as the war for talent continues,” concludes Lyn.

In a family business how do you deal with someone wanting to cash in their shares and how do you value them? As family businesses pass through the generations there is a tendency for the shareholding to become more dispersed as more family members own shares in the business. Obviously, with a more disparate shareholder base there are potential issues in terms of communication but the bigger issue tends to focus on the value of the shares and the ability of an individual to sell them. As Howard Hackney, one of the leading family business consultants in the UK explains, “It becomes more important as the business goes from one generation to the next, that there are mechanisms in place to allow the next generation who do not want to be part of the family business, or own shares in it. Having the right mechanism to ensure that the shares can be sold is essential if the shares are to be traded and have the ability to remain within the existing family bloodline first and foremost too.” Buying and selling shares in a family business can be a fraught affair but with a degree of planning and an open communication forum, measures can be introduced to ensure that this challenge can be addressed. In the first instance, the family needs to determine some ‘ground rules’ and sign up to these as a protocol, ideally incorporating them into the underlying shareholders agreement for the business. Key questions that need to be asked include: Who can own shares in the family business? Who cannot own shares in the family business? What does the role of a shareholder entail? How do you become a responsible shareholder? When disposing of shares, are there preferential purchasers? How do you value the shares in the family firm? When can you buy and sell shares in the family business? Each an every family has a unique dynamic which needs to be factored into the debate but the point about who can own shares in the family business needs to be give careful thought and consideration. Many families take the view that the shares need to be retained within the family descendants of the founders and exclude husbands/wives/civil partners from being able to own the shares in the business in order to protect this aim. Another consideration is the underlying objective of the shareholders in the family firm. Once a business has transitioned past the third generation, it is often stated that the family see themselves merely as custodians of the business for the future generations. As Howard continues, “if this is the case, clear rules regarding the sale of shares is important, and one measure that needs to be discussed is the priority for the sale of the shares, possibly along the lines of the same bloodline first and foremost before opening it up to the other family shareholders, the broader family and even, resources permitting the company to buy them back.” “This is a complex area and needs to be discussed and agreed to ensure that there are no disagreements down the line. Any policies need to be clearly documented and agreed to ensure future clarity and understanding to enable the family to continue harmoniously as a family, in business together, and as shareholders too,” continues Howard. Agreeing on a formula that can be applied to value the shares is also a sensible thing to do as it becomes clear to all what the shares are worth. “It is also worth agreeing a timetable of when shares can be offered for sale to minimise any disruption to the family and the business, with some families agreeing, for example, that shares can only be offered for sale at the end of every third year of trading,” concludes Howard. Clearly, the issues surrounding share ownership and share valuation in a family firm are not simple issues but they cannot be avoided as someone, at some point, is going to want to sell their shares and agreeing a protocol will help to make sure that the process is as smooth as it can be. "The alternative, disruption, potential disagreements between family members and the likelihood of significant legal fees too. Remember, it is better to bequeath your wealth and not your problems so addressing these issues before they come to the fore is key."

What makes family firms succeed where others fail? Here we take a look at what the family business community think is important and increase their chances of success too. At Family Business United we are fortunate to be able to get ‘up close and personal to people working in their own family businesses and over a period of time this has afforded us with opportunities to really understand and appreciate their concerns and challenges. Summarising the thoughts of family business owners across the UK it is evident that there are essentially ten things that need to be addressed and considered on a regular basis, something that successful family firms do regularly, be it formally or informally. Areas that all family firms need to be mindful of include: 1. History Does Not Guarantee A Future. Family firms across the UK are not prepared to rest on their laurels and clearly understand the need to be profitable and successful in business first and foremost. Time and time again the message was clear, history and heritage are important and the fact that there is a family story builds loyalty and trust, especially when supplying products and services, but it does not guarantee a future. Successful family businesses, like other successful firms, understand the need to focus on margin, profitability and good service above all else. In addition, family businesses are prepared to evolve over time and recognise that to continue as a sustainable business for the future they need to remain current and relevant too. 2. Recognising The Need To Embrace Change. Family businesses recognise the need to change, not for changes sake, but taking into account new technology, changing tastes and fashions and the needs of their customers. 3. Family Firms Invest For The Future. Family firms do not shy away from the need for investment, be it in new machinery, new premises, new systems or new business opportunities. We have seen some incredible new developments in family firms that are looking ahead, planning for the long term with business plans taking them further forward, ideally for generations to come. 4. Communication Is Key. Not just from a family perspective but to ensure that all stakeholders are aware of their responsibilities in driving the business forward. Examples included annual events, monthly meetings and extended family gatherings to include the younger generations who were being introduced to the family firm. Communication is essential to minimise misunderstandings and to share values and visions for the future to ensure that there is a collective buy-in to where the business is going too. 5. No Room For Complacency. Focus on the future, build a better business but be aware of what the competition is up to is again a key insight from the UK family business community. The focus on the business also appears to be stronger and more important for those businesses that had been around for longer, with the current generations feeling the need to continue to grow and build a business, and not be held responsible for things coming to an end. 6. Business Comes First. Obviously family is important in the context of family business but it is readily apparent that business comes first. Without a successful business there is no family business and as such there is a strong mandate for business first and foremost. 7. Social Media Is Here To Stay. There may have been some resistance amongst the older generation to the field of social media, especially in cases where it is the family name above the door, but there is widespread recognition that social media is here to stay, needs to be embraced and has to form an integral part of the family business marketing and communications strategy. 8. Continuing Education For Stakeholders. Clearly, the interaction of the family with the business is important but there is also a realisation that the wider family, those not currently involved directly, shareholders and the younger generations need to be educated, informed and kept up to date. Various methods of governance are being embraced to make this happen and it is reassuring to hear how the processes that are being adopted vary from firm to firm, recognising the uniqueness of each family and each business too. 9. Honesty Is The Best Policy. We hear lots of stories as to how various family firms have evolved over time and again it is clear that some have experienced tough times but it was then that the family pulled together, the staff loyalty shone through and the key to success was honesty – with staff, stakeholders and the family themselves. Family firms are not immune to difficult periods in their journey but have a resilience that is palpable when the ‘chips are down’ and have an incredible response mechanism to focus on what needs to be done in order to make it through. 10. Staff Loyalty Is Incredible. Time and time again family firms discuss their employees with many having been with them since leaving school. Numerous firms recounted stories of numerous generations of families working for them and in all it is clear that they consider their workforce to be an extension of their family, part of their very essence as a family business and a powerful differentiator from their non-family counterparts. Family firms are the underlying engine room of the UK economy and the backbone of communities the length and breadth of the country and those that embrace the need to change, for the right reasons, and are continually striving to improve and evolve to meet the needs of their customers are best placed to survive for generations to come too.

One of the main functions of a family business structure is to guarantee its continuity. To do this, it is necessary not only that the business performs well in the market, is competitive, expansive, and profitable but that the owners respond in a united and harmonious way to the challenges posed by the business and the family. These are the two aims of continuity in one action: survival of the company within the market and preserving the patrimony within the family. In this context, studies reveal that a significant part of succession failures in family businesses are due more to family conflicts and discrepancies than problems that are strictly business related. As we know, the family business has obvious advantages derived from essential family values. Still, it also has dangerous traps rooted in the confusion of family life combined with a company's strategic direction. Implementing such processes in a family business is both complex and free of setbacks. In many cases, success can be achieved if two necessary conditions are fulfilled: First, all agreements must be consistent with the "Shared Dream" (their concept of the future together), and every single member of the family's dream must be compatible with the collective one. Secondly, all decision-making within a Family Council should be based on "consensus," which, unlike "unanimity," when well-driven, enriches the debate, increases group commitment, and offers the possibility for everyone to be involved in deciding key issues. But this is only possible through creating a dedicated space for conversation about family and heritage issues based on effective communication, mutual respect, and recognition. Some families with advanced governance structures that integrate a next-generation own forum create inter-generational dialogues between the current leaders and the proper and mature next-gen members about the future of the family business, having well-organized sessions and addressing issues related to family governance and legacy. Family ties and emotional bonds between family members can be an important element of strength that brings unity to a company. However, many times, the exact opposite can happen. Envy, differences, underlying conflicts, and resentments often present in family relationships can be highly destructive to family companies. How a family company handles disputes will determine how the family and the company can be strong and healthy and relates to each other is an important part of family culture. Family rivalries will eventually deteriorate relationships, dialogue, trust, commitment, and enthusiasm for the business venture. It is important to emphasize the need to define a methodology enabling members to affront and solve conflicts that will inevitably be part of the family business routine. Avoiding or ignoring disputes is not an alternative that will provide long-term solutions. However, opportunities can be gained by exchanging opinions, allowing for better content, ideas, and family business strategy. But what about the next generation? Do we need to involve them in our decision-making process for the future of the business? Yes, and no. Depending on the grade of maturity of the next generation, the leading generation can manage to shape a forum by adding and separating the functions of the family and the company leadership, which help to strengthen the role of the Board of Directors of the family business, focusing it efficiently on their responsibilities as administrator of the company strategy. When is the best moment to get the next generation involved in this process? This question usually arises when leaders decide to start implementing a family governance structure process. For many families, the correct answer is always "Whenever the current lead generation is ready." It is only possible to generate a solution that prepares the future owners as the next leaders if the current ones are clear about the objectives and rules of engagement for the next generation. The best value a family business can deliver to its family members is educational training for current and future owners. In-company courses can be designed exclusively to improve the group skills and knowledge needed to be responsible in their roles in areas not covered by the formal education that family members could have received in their university or high-level studies. This training can include (but is not limited to) issues related to the economy, finance, company-exclusive know-how, human relationships, and communication skills, among many others. On top of that, to generate the necessary conditions and safe environment for the establishment of conversations on specific issues related to the transmission of the family inheritance, the participation of both (leading and future) generations in training sessions helps to confirm that the family wants to indeed continue with this heritage in the future or, in the worst case scenario, lead solutions for those who don't want to keep going on together. About the Author - Guillermo is an Affiliate Senior Advisor at Cambridge Family Enterprise Group and founder of director of Exaudi Family Business Consulting. He is a lecturer, educator, author, and expert advisor on family governance, strategic succession planning, generational transition, and conflict resolution. He is an FFI Fellow, former FFI board member. Guillermo is the recipient of the 2015 FFI International Achievement Award. He can be reached at He can be reached at gsalazar@cfeg.com.

JCB has launched the biggest-ever fundraising drive for the NSPCC in its history – with a target of £2 million. The appeal will culminate in 2025 when JCB celebrates its 80th anniversary – and 40 years of support for the UK’s leading children’s charity. It was through Carole Bamford that the NSPCC originally became JCB’s nominated charity, with millions of pounds raised over the years. Today Lady Bamford said: “The support JCB employees give to the NSPCC makes a real difference to children in our communities. The Appeal is already off to a wonderful start, and I know everyone will rise to this challenge. Most of all I want everyone to have fun as we raise money for this most deserving of causes.” The NSPCC appeal was launched at the World HQ in Rocester attended by school children from the nearby Dove CE Academy. The NSPCC helps to keep more than a million children safer through its work with schools, national helplines, and specialist centres such as Carole House in Newcastle-under-Lyme, which was named in honour of Carole Bamford. Lloyd Butcher, NSPCC Senior Corporate Partnerships Manager, said: “We are extremely grateful to JCB for launching this appeal to raise £2million in two years. The funding will support our local services for children and families in Staffordshire and beyond. JCB has been a significant supporter of the NSPCC for nearly 40 years and we’re incredibly thankful for their support.” JCB Commercial Hydraulics Buyer Jessica Thompson, of Uttoxeter, is already planning three events in 2024. She said: “The NSPCC raises money for something that is close to everyone’s heart and I have volunteered to help in any way I can, in order to help raise money for this important cause.” Hywel Phillips, of Eccleshall, near Stafford, who works at the at the JCB World Parts Centre in Uttoxeter, is aiming to run in the 2024 London Marathon to raise money for the Appeal. He said: “I am proud to be part of the two-year fund-raising drive. The more sponsorship I get and the more I encourage others to fund raise, the more motivation I will have to complete the marathon.” The appeal is already off to a flying start with this Thursday’s JCB Lakeside 5 and Fun Run kicking off the fund raising. It will be followed by the JCB Sportive cycling event, a Three Peaks climb, a bake-off competition and a football challenge tournament. The JCB Championship at the Golf & Country Club this summer promises to be the headline fundraising event of the Appeal.

We are delighted to announce that Joseph Barsby of G Seller has been included within the inaugural Family Business United ‘Family Business Top 100,’ which recognises the exceptional contribution of individuals and their work within a family business. Recognition in respect of: Inspirational Leader Next Generation Champion of Change & Innovation G. Seller Funeral Directors and Memorial Masons, has been established since 1910 and has been passed down through the generations. Joseph is the Managing Director and leads a business that is proud of their heritage and well respected name in the local community for caring for families when they need them most. Today, they are still committed to providing the highest levels of bereavement care to every family they have the privilege to serve. Joseph took over the helm from his father and since doing so has overseen the rapid growth of the business, investing in new developments to truly enhance what they offer to the families that they serve. For someone so young to be in such a position and to deliver the level of care, kindness and compassion is incredible and he oversees a team of people that truly go above and beyond their role on a daily basis. "Joseph is an inspirational leader who cares, pushing boundaries and ways of working to constantly take what they do to the next level of service and to many is an industry leader. He is committed and passionate about the work he does in the industry that he works, dispelling myths and introducing innovative ways of sharing their story. Joseph truly deserves his place in the Family Business Top 100."