In most privately owned family businesses, the chairman of the board is a family member. But for some family ownership groups, an executive from outside the family is the best choice for the chairman's job. Several multigenerational families, for example, have found that a non-family chairman can best manage the boundaries between the family and the business, while meeting the needs of both.
“The independent chair brings a broad perspective that the board is working for the shareholders who elect them,” says Ann Pelham, a director of Canal Insurance Co., Greenville, S.C. “If the company is not providing a return for the shareholders, then the board isn't doing its job.”