Once a family determines the role of a family director, a family can then determine what qualities a family director should have. After that, the family can develop an evaluation process to check for those qualities, and agree upon a selection process for family directors.
A family director needs to be able to do several key things:
- Have strong working relationships with family members.
- Understand the family and business strategy.
- Represent the interests of all family members, not just the interests of a single branch or individual.
- Be part of the family governance process to ensure that he or she understands the will of the family when voting on board matters.
- Have enough business and financial education to be able to understand the dialog at board meetings, and interpret the financials.
A family may have many more expectations of their directors, but these are some of the key items.
Once a family determines the expectations, they need to determine how to develop the desired skills in individual family members. There are classes, conferences, webinars and other experiences in which a family director candidate can participate. A few families that I work with have started to build, as part of their family strategy, a development and education committee to help guide individuals along their development path. The development and education committee can help the family define expectations for all roles, including family director, and create a process by which to support individuals in their efforts to become qualified for a role.
Some of the tools that a development and education committee can use to help individuals become director-ready are:
- Psychological assessments to determine baseline strengths and weaknesses
- Role expectationsIndividual development plans
- Curriculum development and delivery
- 360-degree evaluations
The development and education program can also be used for development for other roles as well, such as family council chair, family employee, standing committee chair, family council member, and next generation development.
The development and education committee acts in an advisory capacity to ensure that the individual is working towards his or her goals, and offers support and accountability on a weekly, bi-monthly, or monthly basis, depending on the immediacy of role placement.
One of the final tests of readiness is an evaluation. An evaluation will comprise of both subjective and objective criteria. The subjective criteria measure expectations. Does the individual have trust of the family? Does he or she act with integrity? Does this individual represent the whole family in all of his or her actions, not just the interests of a branch or individual?
The objective criteria are easier to measure. Did the individual complete his or her development plan? Did he or she attend the recommended classes and conferences? Can the individual demonstrate knowledge of the board financials? The development and education committee may be better placed to measure these objective expectations than the family as a whole.
Finally, the development and education committee combines the subjective and objective measures into an overall evaluation and reports back to the family on the candidate’s readiness for the role of family director. The family then needs to decide on how to select the qualified candidate. Are the qualified individuals nominated and then a vote is cast? If a family has a voting trust, will the voting trustees review the evaluation completed by the development and education committee prior to making a selection? Will the individual be nominated by the nominating committee of the board after seeing the evaluation results? There are many ways to vet and vote on qualified family directors. In fact, many families have the voting process already determined, and the challenge is to bring only those individuals who are qualified forward for a vote.