BOARD OF DIRECTORS – INDEPENDENT DIRECTOR

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WHO ARE INDEPENDENT DIRECTORS?

MEANING OF INDEPENDENT DIRECTOR IN FAMILY BUSINESS

  • An independent director, also known as an outside director, is a director/member of a board of directors who does not have any material or financial relationship with the organization or its related persons. Independent Directors, charge a sitting fee, a remuneration, for attending the meetings.
  • A non-executive director is a member of the Board, but who is not employed with the company. An independent director (a member of the Board) who does not own any shares in the company.

WHAT IS THE ROLE OF AN INDEPENDENT DIRECTORS IN A FAMILY BUSINESS?

Independent directors are highly experienced, qualified, and visionary. They act as a Virtual CEO and provide strategic direction to the family business.

THE ROLE OF AN INDEPENDENT DIRECTOR:

  • Improving corporate credibility
  • Enhance governance standards
  • Risk management

Independent directors play an active role in various organization committees set up for good governance and are also part of the Virtual Family Meeting of the family business.

Outside directors are more objective and bring about a paradigm shift in the management of a firm. independent outside directors to boards help in adopting best management practices and also maintain accountability and objectivity.

The independent director can think holistically and guide the company strategically and professionally. He can rise above the interests of the founders, CEO, investors, large shareholders, and venture capitalists. The independent director should bring a fine balance at the board level.

REASONS FOR HAVING INDEPENDENT DIRECTORS ON THE BOARD OF A FAMILY BUSINESS

  • Independents are impartial, objective, and professional who look independently at the family business and the shareholders’ interests
  • Independent Directors bring a deep focus to the family business and the industry.
  • Independent Directors have considerable experience and expertise to provide growth platforms to the company while minimizing risk
  • Independent Directors are most effective in conflict resolution among family members and serve as a bridge between the family and the management
  • Independent Directors can mentor the CEO and enable building a great executive committee for managing the family business on a day-to-day basis

NILESH ARORA

Nilesh Arora is BTech. (Mech), IIM – Ahmedabad Alumnus, Certified Corporate Director, Certified Management Consultant, Certified Six Sigma Expert having more than 20 years of global experience in the field of Strategic Management, Family Business Management, Operational Excellence and Business Excellence.

As a Global Family Business Coach and Advisor to many Family Owned Businesses (FOB’s) he has assisted more than 100 families and 250 organizations to date across Africa, Middle East & Asia (AMEA) in manufacturing as well as service sector, enhancing their revenues and equity value.

Specialities: Family Business Advisory, Succession Planning, Entrepreneurship, Business Coaching, Business Excellence, Lean Operational Excellence

ADDVALUE has been operational in India, Kenya, Uganda, Tanzania, Rwanda, Ethiopia, Nepal, Thailand, UK, Canada, Australia, Madagascar, UAE, Saudi Arabia, Bahrain, Nigeria, Ghana, Bangladesh, Sri Lanka etc. ADDVALUE was recently conferred the “BEST PERFORMING CONSULTING ORGANIZATION” award by Government of India.

For more details about Board of Directors, Independent Director please send us your queries on: info@valueaddedcoaching.com or Call / Whatsapp: +91 9824009792

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