Good governance is more than you think . . .

Bill Alexander

Last week Wharton professor and family business advisor Bill Alexander presented a workshop on how family business executives can set up a board of advisors. This post isn't a blow-by-blow account of that presentation because that would be giving away the store--obviously, the High Center would like you to enroll in this executive workshop the next time it is given.

One point Bill Alexander made is worth mentioning and merits your attention: Yes, a board of directors or advisors can provide governance and help a family business leader accomplish your strategic and tactical goals. However, governance is about more than installing a board. Good governance also includes setting up family meetings for the family shareholder group. It requires looping in non-family shareholders. It means doing the necessary work to set up or to preserve a functional family business ownership group--before any outside director you hire steps into the picture.

Never bring in a paid outside director or advisor expecting them to right your vessel. If you have a dysfunctional family ownership group, you must take steps to get that ship sea-worthy first. If you have squabbling and in-fighting within your ownership team beyond what is reasonable and customary, you need to address that dysfunction before bringing in someone to oversee the rest of your operations.

You will do your family business a world of good by establishing a regular communication for non-family shareholders through constructive, focused family meetings and you'll be laying the necessary groundwork for a board of directors or advisors to help you realize your key objectives.