Producing more than 30 per cent of GDP, family businesses are the lifeblood of the UK economy. But don’t go in with your eyes closed, warns Thayer. “There are particular challenges involved in running a family firm and being the only outsider can be tricky.”
So what should you expect” As a non-executive director, one of your biggest roles – and challenges – will be succession planning. “Family members tend to bicker over who will take over the reins and when,” she says. “As a non-exec, it’s your job to referee that process.”
“Get an independent consultant to put all likely “heirs” through their paces and assess experience, potential and commitment. Supervise the process, ensure it’s fair and make sure you keep family members in the loop.”
Thayer points to a family squabble that took place in the ranks of an £8m-turnover food business. The founder’s son and his granddaughter were both vying to take over the business. The son was the reliable choice – he was in his fifties and had been working at the company most of his life. The granddaughter was the wildcard – she was in her early thirties and was chomping at the bit to break into new products and markets.
“The founder faced the same predicament as the Queen – Charles or Will?” The family tried to thrash it out among themselves which causes tension, heated arguments and a stressful six months. A non-exec director could have prevented all that.”
Non-execs also need to be able to manage the expectations of family members. “The owner of a £15m-turnover clothing firm assumed his 22-year-old grandson would join the business as soon as he’d graduated from uni,” says Thayer. “But the grandson had zero interest in being involved. The family hadn’t prepared for anyone else to take over the firm. It was the end of the line and they had to sell up.”
A non-exec’s role would involve carving out a five-year business plan and speaking to all potential successors. He or she would also have to try and wipe out nepotism: "During an economic downturn, there’s a tendency in family firms to try and save money by culling anyone who doesn’t have the same surname. An independent non-exec would ensure that employees are assessed on their competence – not their blood.”
Interested in becoming a non-exec director of a family firm” Check out this event on 29 April.