What qualifications do you think IDs in family firms need in order to add value for
shareholders and stakeholders?
An independent director of a firm is supposed to posses personal and professional ethics.
They should be persons of integrity who are ready to uphold the business code of ethics. In
this regard, they are supposed to posse’s good communication and rapport with their
customers. It’s through the better ethical skills that the shareholders may be motivated to take
part in the business affairs of the company.
Secondly, they should be persons with extensive business experience on how to run a family
firm. In this sense, a person should at least have at least 5 years’ experience to qualify for this
position. This is because, in regard to its daily task a person who has an extensive
qualification may be able to convince other shareholders and stakeholders on what to do
regarding the dos and the don’ts of the organization towards a profitable margin.
Thirdly, IDs should posses’ appropriate skills and relevant experienced in fields relating to
management, sales, marketing, administration and law etc. it’s through possession of such
skills that the ID’s is able to strategize towards increasing the shares and sales of the firm.
This is because all such fields are related with the firm’s key agenda.
Fourthly, the IDs should be technical oriented. This implies that they should be able to
command the fundamental digital market through better literacy in the same field. Family
firms rare usually based on critical digital enhancement, especially because of advancement
in technology. Therefore, the said persons should be fit in using technology for marketing and
business day to day duties.
Fifthly, they should neither be members of the family nor should they be related to the family
and other members in any way. This is because once the ID is not related to the family
members, they will be able to make independent decision which will suit the betterment of
3
the family firm. Its through this independency of the Independent directors that the family
firms can be able to be directed on what to do and what not do base on direct consequences of
the dire issue. Through this the ID can be able to accept suggestions from shareholders who
are only going to add value to the organization without any favors.
Lastly, the IDs should possess boardroom experiences on how to defend their statements
especially when it comes to board meetings aimed at accepting contracts or new shareholders
in the company. This will make them to evaluate the possibility of selecting a certain
shareholder with key influences based on their previous track records. As a result, this will
result into an improvement in shares sold and as a result to flourish of the business.
Should regulators give IDs in family firms more power?
The question of whether IDs should be given more power or not depends on so many views.
To begin with, it’s a ruling current governance system which allows every family firm to
have an independent director. Therefore, in my views the regulators should increase the
power of the Independence directors of the family firms.
First, its through this that the mandated preparation of the IDs can be revealed. Many family
firms are fond of oppressive the independency of the IDs especially when it comes to making
personal decisions based on the corporate issues of interest. Therefore, once this IDs have
been given more power, they may be able to stand as independent in making firm decisions
without any manipulative influence from the other directors of the firm.
Secondly, due to the fear of the minority shareholders been expropriated. It becomes
necessary that the IDs should be guaranteed with power so as to defend the shareholders who
may not be well-off in terms of their shares in the company. Such minority employees are
normally at the risk of been banned and misused by the firm. It is through the power given to
4
the IDs that such minority shareholders can be granted with freedom to participate in the
affairs of the
Firm without any fear of been kicked out.
Lastly, to enhance an increased number of IDs in family firms, once the Ids are given more
power, they will be able to push for an increase in number of IDs in a firm. This will ensure
that they share the work which is available in the firm. Most of the firms have a greater task
but less personnel to initiate the duty. Therefore, its necessary that the IDs be given more
power to facilitate their independency in the corporate governance practices
References
Dieleman, M. (2017). A Place in the Family: Corporate Governance Practices in Family
Firms. SAGE Publications: SAGE Business Cases Originals.
5
http://sk.sagepub.com/cases/a-place-in-the-family-corporate-governance-practices-in-family-
firms
Islam, M. T., Rahman, M., & Saha, S. (2020). Corporate governance reform and
overstatement of compliance: Illustrations from an emerging economy. Business Strategy &
Development, 3(4), 648-656.
https://onlinelibrary.wiley.com/doi/abs/10.1002/bsd2.129