Family businesses need boards too

Hi, I'm Dr. Natalie Bitatori, and today we are talking about boards in the sense of family businesses. This is such a contentious issue. Some people think it's terrible, some think it's good. I am team good. I think boards are always useful. Because I've been on boards, I see the value in boards. Even family businesses need boards. And I feel like the biggest hurdle with family businesses is, like, you're so protective. The business is like a whole other family member, and no one wants to share that information or have other people to know the information. But other people add value. So have a board. It's useful. And even before you have a formal board, start having board meetings as a family. Sometimes my dad jokes when we're having dinner, like, this is a board meeting or the whole board is here because we talk about work so much for the family, because we're all, like, involved. But it's helpful, I think, to have a family board, like a structure. So that's the first thing I would say, have a board. And when I say have a board, have regular meetings, have documents, take minutes, have a company secretary, have committees, if you can, if the board is big enough and do it regularly and take it seriously. All show up on time, all show up prepared, read the information, listen to what each other is saying, contribute, ask questions, do it like you would a real board. So I guess I was lucky that because my dad was on boards for other companies when I was young, sometimes he got to take me because I was working as his assistant in the early days of my career. So I used to get to go places, take notes, you know, give him reminders, follow up, schedule stuff. But I got to sit in some of the other company boards and I got to listen and understand. In our own family businesses, he'd always let us sit and listen or even ask questions in board meetings for the family businesses. But for external ones, of course, that's not right. But I could listen and see so he could bring his experience and I could see the value. So as chief of staff, one of the things that's my responsibility is to make sure that these board meetings actually happen. Everyone is there, Everyone is prepared. I can't say that we are the strictest and like the best governed board because sometimes with our schedules, we'll push it a week or do it another next week, and it's three months and two weeks. You know, it's not perfect, but we do have them. And it has been useful. And I think letting all the family members who are involved in the Companies show up and do their part and know who is speaking, who is responsible for what, who is doing, which role, ask questions, cultivate that environment that is open. It helps because everyone loves the business and cares about the business. But when a family, family businesses are much closer. I think all businesses are. Like, I'm very attached to my own personal businesses and also the businesses that I'm on boards for. Like, there's attachment everywhere. But family businesses have different dynamics, different history. So take it seriously and try it. Even if you feel like you're playing for train, pretend just like, let's all just show up and like, have a board meeting. Let's just do it. Call the meeting to pay attention, go through the notes, go through the minutes, you know, do things formally. It's, it's, it's. Sometimes it can feel funny if it's just you as the family members, but usually you have other managers or other directors and you can make it interesting and make it useful and do it properly. I think the second, second thing that I would say is important for family billboards is you as the family don't always know what is best or what is right. And I know that's a contentious thing to say, but hear me out. They are managers, they are staff. There are other workers in the company. And sometimes family members are not the ones on the front lines. You're not the ones dealing with customers every day or making the product or delivering the service. So there's people who have other opinions, who have other experience and other information that you don't have. So it is important to let the other managers come to the board meetings to speak up, to share their concerns, their challenges, their wins, their ideas, lots of. To cultivate that environment, what we even do. Because like with Simba Group, we have different sectors we work in and different companies. We let the companies watch each other, present, and let the other managers also give each other criticism or questions or suggestions. The hotel runs help with Telecom, Telecom helps with hotels with different companies. And you never know what the different brains or different perspectives will come up with, what they have experienced, what they're learning, what they're knowing. It's important that sometimes the family members are also quiet and listen because the managers are there. They know what they're doing. It's their job too. It's their job every day. They're showing up for your family business, for your company, and they have a lot of value that they add. In our companies now, none of us present as family members. The managers of each company is not A family member, they actually stand up and they do their presentation and they do all the board pack for their company. And it's our duty as the family on the board to ask them questions, to come understand, to make sure that we're informed and we are guiding them and we're holding them accountable. And we're making useful suggestions or introductions or bringing resources, and we make sure that it's a useful discussion. Because sometimes family members can dominate or like, think that they know everything and want to, like, power through with their vision or their strategy. This is the person, the CEO. This one is the chairman, that one is the head of finance. So they have to be right about this and no one can say anything. And I think that's the wrong attitude to take your junior staff. Yeah, they're junior from you, yes. It's not their company, but they work there too. They also have observations. They see the trends, they see the challenges. They have to be there when it comes. Customers are shouting at them. They're the ones who have good ideas or know what's happening in the market or your competition. So take note of that and also listen and learn. The board structure for a family business is also useful for the outside voices. If you are a family business now that has directors that are external, that's also great. They will bring to you other ideas, other information. They'll challenge you in new ways, and the reason you've put them on your board is for that. So don't forget it. The last thing I would say about family businesses is be reasonable. I don't know why this is such a problem. Whenever we talk about family business, a lot of the questions I get are about conflict. And I say you have to be reasonable. And everyone thinks they're reasonable, but you have to be intentionally reasonable because it's hard when you work with family members. There's so much going on beneath the surface. You have a much longer relationship with this person. So of course there's been more ups and downs. There have been more obstacles. There are people you get along with better, the ones who challenge you in other ways. It's very easy to get your emotions back, to derail you from the meeting or from what's going on. I can't say my hands are clean on this one. I know there's one board meeting I was very disgruntled. I felt so undermined by one of our family members and what we had done. So of course I showed up for the board meeting like I had to, but I didn't say anything I sat there for four hours and I didn't say anything, which is irresponsible and immature. As a manager, as a senior person in management, in our companies, it's not that my opinion is so important, it's that it's not useful for me to sit in a meeting quietly like that. I'm not adding value. I'm not asked questions, I'm not challenged. I'm not encouraged or praised anyone or done anything. One of the managers texted me, madame, are you okay? It's unlikely to be so quiet. I'm like, I'm fine, but I was upset. And now I know better than to do that. That's why I'm saying, be reasonable. If it was any other situation, I would never do that in a board where I sit, like on a proper board, but because it's my family business, I could have a tantrum like that. It's not right. And I get that. And I think it's easier to get derailed in the emotional chaos when you're working with family. Yes, things get heated in boards or in meetings or with colleagues. It can get heated, but it's. I think you're more logical or you're more aware that you're in a formal situation. When you used to argue with your siblings, your parents, your relatives, your cousins, your who, it's easy to let that like trickle down or like leak out into the family business. So it's important to remember this is actually a family board meeting. Yes, it's a family meeting, but it's a board meeting. You need to carry yourself professional. You need to be serious about it. I did not have a full on tantrum. I was quiet. But I know other people who have argued on the board who have fought their physically, not physically, but like argued and refused and held the company up. How many stories do you hear about family businesses that have been ripped apart? The two brothers fought, they divided the company and now they're competing. Or this one stole the family's idea and started a separate business. Or they argued so much that they had to stall things and now they have lawyers or mediators or PwC has come in to help them. Like there's many different cases like this. I have friends who work for like Deloitte, PwC and those companies. You will not believe the things that they hear and say. Talk to your friends who are estate planners, who are lawyers. They know all these kinds of chaos. The father said, this one is the heir. Now these ones have refused to work. This one was announced that they're going to change this structure in the family business or when the heir, the founder, like the father, dies and then the son who is in charge has never done this or has never done that and has completely run down the company. You hear these stories and it's unfortunate. And I feel like if there was proper governance and structures in place, those kinds of situations wouldn't happen. That happened to one of our suppliers. We had to stop using them. The son who inherited the company was terrible. I think he had never worked in the business and when the father died, he just decided, oh, let me just take over. But it didn't work. And he upset all the managers and the people who knew what they were doing and the company just can't manage. So they lost us as a client and they lost many other clients. And I've seen this happen. And I think it's so easy when it's your family business to feel like you know what's best. You know about it because you've been hearing about it visiting the sites or the offices. You hear about it at home or the dinner table. You feel like you know it or you're close or you know best. It's important. Remember to be reasonable, remember to listen to other people, the managers, the directors, other external voices, also care about your business and also know about it and also have the board start there, make the structure, do the meetings and see how it grows from there. Our first board meeting was not as serious or as well organized as the ones we have now. And it's always been ups and downs for different managers or different structures, but at least we put in the effort to have them. And it makes me feel better because I know in our family business there's some level of governance, there's some level of accountability, of checks, of challenge, of questions, of criticism. And I hope we can continue to grow in this because that's the only way that our companies will continue to grow and will last beyond my father and beyond me and will be able to have a legacy and have an impact and continue to employ people and provide services. So you have to think about it as bigger than you and take a step back and be reasonable. I hope you found that useful. If you found this video useful, be sure to subscribe on my social media channels so you can get more information. I believe in you. I want you to succeed and I'm here to support you.