Transitioning to a new CEO is always challenging. Doing so in a multigenerational family business is harder. But hiring the first non-family executive to run a family business may be the riskiest type of CEO succession. There are only a few ways for things to go right, but an infinite number of ways for them to go wrong.

Today, there are no more excuses to avoid a digital transformation. On the contrary, COVID and competition have highlighted its importance to a company’s growth, regardless of its size. According to Deloitte, for private companies, undertaking a digital transformation is essential to driving value, sustaining long-term business growth, fostering a culture of innovation, driving efficiencies, and ensuring better connectivity with internal and external stakeholders.

Boards are charged with helping companies grow and succeed while ensuring that risks are managed responsibly and effectively. As we reflect on recent trends and significant risk factors at the beginning of 2022, there has been a notable acceleration of risks that were once classified as “emerging.”

2021 was a year of tremendous growth and change for PDA – the appointment of my predecessor, Alan Aldworth, ushered in a series of major initiatives to fundamentally position PDA to realize its central mission and goals.

These initiatives included the following:

Environmental, social, and governance (ESG) topics have been around for a long time. Sustainability is ingrained in our social fabric and increasing in importance. Family businesses may wish to recast sustainability as an opportunity to improve efficiency and employee engagement. Preparing an annual business sustainability report with KPIs is one way to share the information with the board directors, management, and employees. 

Since the emergence of the COVID-19 pandemic in March, 2020 and the resulting disruption to retail, hospitality and other industries, and the more recent severe disruptions in the international supply chain, many businesses are experiencing severe challenges. And most directors of private companies know that when the company begins to experience financial distress, they need to be especially vigilant to avoid breaching their fiduciary duties of loyalty and care.

Internal investigations are a fact of business management and governance. Broadly viewed, there are two general scenarios for private board oversight relating to internal investigations: (1) oversight of management’s investigation processes, and (2) in limited, special circumstances a specific investigation might become a matter for more direct board oversight or involvement.

Private company directors are becoming increasingly aware of the importance of environmental, social and governance matters (ESG) to investors, financing sources and the company’s bottom line. The events of 2020 and 2021 heightened interest in ESG matters for all businesses. If your company thinks of ESG as a narrow, non-core activity that primarily focuses on philanthropy through corporate giving and volunteering – you are likely missing out on great strategic opportunities.

Just as the COVID-19 pandemic highlighted the need for executive leaders to be well prepared as crisis managers, it served as a reminder of the value of a strong board of directors as an ally in transitioning out of chaos. With diverse experiences, historical perspectives, and myriad insights, board members can be essential to a successful corporate crisis management plan before, during, and after the crisis for all companies, public or private.

When it comes to directors and private companies, we’ve seen the lists:

“I don’t need or want a board of directors!” This is the view of many owners of small to medium-sized companies. “I’m doing OK.” If your goal is to make your company more successful, working with a fully functioning board of directors will materially improve your chances for success. Operating as a resource, a coach, a big question decider, a risk manager, and the center of governance, your board can be a valuable asset for your company.

Private companies have been buffeted by upheaval on many fronts in the past 2-3 years: pandemic, inflation, stimulus programs distorting employment markets, supply chain disruptions, war, and other issues. These pressures have caused financial distress by some, acceleration of generational transfer by many, and sparked the decision to sell out by others. The use of well-qualified senior interim management professionals acting under the guidance of the Board may help bridge gaps that occur with rapid change, and this article explores the reasons why and how that may be done.

Chicago, IL (April 22, 2022) — "The" Private Directors Association (PDA), a national association dedicated exclusively to serving private company boards and directors with the mission of improving value, growth, and sustainability through private company board excellence, announced that Bank of America has become a PDA National Diamond Sponsor.