The survival and success of privately held and family owned businesses depends on many factors. One of the most significant factors is a board of advisors. Yet an American Family Business Survey reports that almost half the boards of these types of businesses meet only once or twice a year, over 60% don’t compensate directors, and a quarter of family businesses say their boards make no contribution all.
It’s very interesting and puzzling to me that so many businesses do not use an effective tool most US corporations utilize. Why do so many smart owners and entrepreneurs ignore a strategy that will give them long-term payoffs, and ensure the resilience and success of their business? They must know something that I don’t!
With apologies to David Letterman (I really miss David, do you?), I’m going to use his famous countdown list format to make my point. Here are my top 8 reasons not to develop a board of advisors: