Considerations for family businesses recruiting a non-executive director

Why should a family business recruit non-family talent, and in particular a non-executive director (NED)? The answer lies in three areas—fresh perspectives and breadth of experience, independent oversight and constructive challenge, and performance.

Independent research commissioned by the Institute of Directors found that the NED contribution added value to the firm with most believing the NED role improved profitability.

We have put together some questions to help you consider the type of non-executive director you need for your business and some interview questions to help you recruit the right candidate.

Considerations before recruiting a non-executive director

- Will they bring the skills and experience needed to fill the gaps to help the business (and family members) make the leap from good to great?

- Will they bring an impartial and objective viewpoint that family members do not/cannot?

- Will they be a safe custodian of our values and our wealth?

- Will they be approachable?

- Are they comfortable communicating with family members (including different generations)?

- Will we get on with them? How adaptable are they to our ways?

- Will they seek too much independence from the family?

- Will they nurture and develop the next generation? Do they have the skills and experience to help facilitate their success?

- Will they proactively start potentially emotional conversations and assist with collaboration among the generations?

- Will they support both retiring family members and, crucially, the business for its evolution?

- Will they ensure values and principles are passed to the next generation?

- Will they stay vigilant for any potential signs that the next generation might have plans that could undermine the brand and risk jeopardising future prospects?

- Will this person be made to feel like a family member, or will they always feel like an outsider?

- Will they be willing to stand up to the different interests in our family business and act with uncompromising independence when that’s needed in a way that helps us to balance the best interests of everyone with a stake in our enterprise?

- What might the career trajectory and the experience look like for this person coming in? Are we able to create the right environment for a non-family member to thrive?

Example interview questions for non-executive director candidates

- What is your experience of working with family businesses?

- What type of family business have you worked with; first generation or multigenerational; single business or diversified enterprise?

- By way of example, what type of non-financial performance measurements do you think could be included for the NED of a family business (and do these fit with the controlling family’s values)?

- What are some of the advantages and disadvantages of a family-owned business compared to other businesses?

- Why would you recommend working for a family business?

- In what areas would you expect the governance of a family business to differ from other types of business?

- What is your experience of forums and policies that allow for representation of both families and their businesses?

Are you considering a non-executive director career or seeking a non-executive for your board?

KPMG Connect on Board has been designed to help non-executive directors (NEDs), both aspiring and experienced, find roles. It also helps organisations seeking NEDs who wish to advertise NED roles.

KPMG created the platform to attract talented people from diverse backgrounds, but recognised this required a more inclusive approach to the recruitment processes, so everyone in business is represented both at board and executive level.

It’s free to use and allows members to convey the full breadth of their skills, experience, and career ambitions. It is supported by several organisations including, the Institute of Chartered Accountants in England and Wales, Confederation of British Industry, Institute for Family Business, Quoted Companies Alliance and several leading executive search firms in the United Kingdom who use the platform to search for candidates.

There is also guidance on the Board Edge page for those seeking a NED role in a family business or those considering appointing a NED to their family business board.

To join Connect on Board you need to submit a CV (in PDF format) showing a solid foundation of executive roles, any prior board experience (UK and/or overseas), thorough awareness of corporate governance issues boards need to comply with, and a deep business/sector understanding. Please note all candidates will be subjected to a verification process. Please register here.

Alternatively, if you know of anyone seeking a NED position for their boards, they can advertise roles (preferably remunerated) for free to more than 2800 candidates currently on the platform.

For more information please email: KPMG Connect on Board membership.