By Dan Beenken

Succession planning is such a vital part of all family businesses that we are devoting a regular column to it. In the first articles about retirement, I spent time discussing ways that the current generation can find ways to begin the process.  

I want to turn to a specific item on the checklist that I see as vital for a family to move from generation one to generation two (or generations three, four or five, for that matter). As a family moves from centralized decision making by the founder to a process that has more complexity and involves multiple siblings or other family members, an outside, objective advisory board is critical.

Before I get into this concept any further I want to make one thing clear: an advisory board is NOT your boss. They aren’t there to tell you what to do, but rather to ask questions and give their own advice and first-hand experience.  

For my purposes here, I will refer to all boards as “advisory” boards, though we will delve into the pros and cons of fiduciary versus advisory at some point.

The benefits an advisory board are numerous, but just to hit on a few:

• Gain specialized outside expertise in areas you aren’t familiar with
• Provide an objective third party for sibling rivalries – I mean sibling discussions
• Challenge you with questions you don’t take the time to ask yourselves
• Allows you to take time to think “On Your Business”
• Objective feedback on new ideas and strategic decisions
• Support and Motivation

In my next post I’ll talk more about how to actually create one and the steps to take.