In the modern-day realm of family business, it is increasingly common for leadership positions to be filled by individuals who are not family. Like most leadership positions, the benefits of the job make an offer hard to turn down. Responding to the offer depends on how the non-family member perceives the dynamics of a family business.
If you are a non-family member and have been offered a leadership position in a family business, you must ask four important questions when deciding whether to accept or reject your offer.
What does a non-family member leadership role entail? In general, a family business leadership role involves all of the normal responsibilities of a CEO of a public company, in addition to the unique responsibilities of a family business CEO. The benefit of working for a family business is that you may not experience the extensive pressure from shareholders to be immediately successful. Instead, the familial values inherent in the structure of a family business have a greater focus on long-term stability and success. However, beware of the potentially personal and political family business environment. In this leadership role you may have to adopt the character of a mediator and guide to resolve problems among family member employees.
Who will a non-family member leader work for? Even though your position is for a leadership role, it is important to understand that certain family employees, regardless of their title, may play a significant part in your daily work life. However, keep in mind that a CEO’s primary purpose is to work for the Board of Directors, not just any family member employee.
What is the composition and role of the Board of Directors? Like all businesses, the Board of Directors play a significant management role. A family business Board of Directors may consist of only family members, or a mix of family members and non-family members. It is essential to know who is on the board, how they came to be part of the business, and what they expect from you.
What are the key family values of the business? Accepting a leadership role in a family business means you are also accepting the family, their values, their unique culture, and their specific business goals. If a non-family member leader shares different values than the family business they are responsible for, then the business is likely to fail. Accordingly, in order to fully understand a family business’s values, you must speak with a diverse array of family employees before deciding whether to accept or reject your offer.
Moriah Dworkin concentrates her practice on corporate governance and mergers and acquisitions. She has experience drafting and reviewing corporate formation documents and licensing agreements for startup companies and large corporations. Moriah can be reached at email@example.com or 206.757.8359.