From time to time, we’ll post Bea Wolper’s “A-Z Keys to Family Business Success” followed by a question from one of our members on the topic – here’s B:
B – Board of Directors. This is the statutory group of people who make decisions about the direction and long term strategy for the company. The composition is usually your key family owners and managers.
Question: Is a Board of Directors the same as an Advisory Board?
Answer: No! An effective Advisory Board can provide non-binding but informed guidance. In contrast, a Board of Directors has formal legal authority over a company and a fiduciary duty to stockholders.