Why should you form a board of directors?

Most family businesses of any meaningful size already have a board of directors. If the company is organized as a corporation, a board is required. Yet most of these boards are made up exclusively of family members. If the CEO is non-family, he or she may also serve as a director. Is this the best we can do?

One notable trend in American business over the last two decades has been the pressure on public companies to upgrade their governance practices by having a majority of independent directors. Many private companies, including family-owned businesses, have quietly been doing the same. There are a number of reasons, both material and cosmetic. Why consider it? Why not?

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