The market is getting more competitive overall, so we are seeing Family Enterprises more clearly defining a Board member's role...
CHICAGO (PRWEB) October 20, 2017
Linda C. Mack, founder and president of Mack International, the premier retained executive search and strategic consulting firm serving family office and wealth management clients, was a featured luncheon speaker at the Kellogg School of Management on September 12. The four day session, held at Northwestern University’s Evanston Campus was entitled Family Enterprise Boards: A Program for Current and Prospective Directors. Participants included current family and non-family board directors, executives, trustees and chairs of family controlled firms, as well as family member developing themselves for future roles as board members in their enterprise. The agenda included a distinguished group of noted faculty, experts and thought leaders who participated on panel discussions and shared individual presentations. A wide variety of topics of interest were explored in depth on issues that affect current and emerging board members on how they might effectively manage their pivotal role within these unique organizations.
Linda’s session was titled: The Role of the Search Firm in Identifying Directors for Family Enterprise Boards. Objectives for the session included defining the ideal profile for an independent director, assessing culture fit within the family enterprise and exploring the advantages and risks of bringing on directors who come from other family companies. “Independent directors play a pivotal role in effectively contributing to the growth and success of the family enterprise,” said Linda. “They provide the essential function of bringing objective expertise and counsel to the family. This insures the board’s work aligns with the values and long-term growth of family enterprises, so it is imperative to be strategic when making this decision.”
The session focused on trends, challenges, best practices and the role of outside advisors when recruiting independent directors to family enterprise boards. According to Linda, one of the major trends is the increase in a more professional and sophisticated approach. “The market is getting more competitive overall, so we are seeing Family Enterprises more clearly defining a Board member’s roles and responsibilities, performance expectations, success metrics and compensation plans prior to appointing them.” In addition, Linda discussed the increasing trend toward using incentives and more formalized governance.
Recruiting members with the commensurate skill set is an ongoing challenge. Linda emphasized that finding a candidate with the proper experience and expertise is difficult but it’s not the only issue. “Yes, it’s a challenge to identify and access the universe of potential candidates, but once we find someone with unique qualifications, we consider them as only making the first cut. Determining “culture fit”--the personal characteristics and attributes required to be effective as an independent director of a particular family enterprise --that is 95% of the equation. At Mack International we consider that paramount for success.” Linda shared best practices for recruiting high-impact independent directors and the first step is defining the business strategy and requirements for success. “Before you start, you need to have clearly defined what the end game looks like and what it takes to get there in terms of the composition of the Board.” Linda explored the selection and assessment process and the crucial nature of onboarding. “It’s not enough to identify and recruit the right director. You need an effective onboarding process that is designed to ensure their success.”
Linda addressed key objectives and principles involved in director compensation. “There are really five drivers to consider when designing a proper compensation package. The competitive nature of the market, size and complexity of the business, the role of the director, and family philosophy are all important components…and if incentives are used, individual contribution and performance must be taken into account.” According to Linda the best compensation practices are integral in recruiting, engaging and retaining directors.
Linda concluded the session discussing the benefits of using an outside professional to help families define their needs, identify the universe of potential candidates and help recruit/assess them to get the right board member. “The value of an independent consultant in both the search and compensation design cannot be overstated. The risk of appointing the wrong individual as a board member is very high.”
Justin Craig, Director of the Kellogg Center for Family Enterprises forwarded participant feedback describing the program as “informative” “inspiring” and “intense.” Linda’s session in particular was referred to as “high energy” and “impactful.” “The conversation with many of the attendees continued well after lunch,” said Linda. “It was a privilege to share some practical insight with a remarkable group of successful family business people.”
About Mack International LLC
Mack International is the premier, boutique retained executive search and strategic management/human capital consulting firm serving national and international clients in the family office, family business enterprise and the wealth management industries on national and international basis. Founded in 2002, the firm has achieved an exceptional track record of success as evidenced by its unmatched industry expertise, in-depth market knowledge and unparalleled track record of success. Founder and President, Linda C. Mack has established proprietary methodologies such as the Mack 360© and is credited for having coined the term “expert generalist” in the industry.