Why Should You Form a Board of Directors – for a Family Company

One notable trend in American business over the last two decades has been the pressure on public companies to upgrade their governance practices by having a majority of independent directors. Many private companies, including family-owned businesses, have quietly been doing the same. There are a number of reasons, both material and cosmetic. Why consider it? Why not? There are many good reasons to consider forming a fiduciary board (as opposed to an advisory board) with one or more outside independent directors, and also a few negatives. How well a family understands both, and moves forward, can have a dramatic and material long-term effect on the success of their enterprise.