Family Businesses Benefit from Outside Directors
The governance of a family business can be more complex than that of non-family-owned private companies because of the central role of the family that owns and typically leads the business. In a family business, the management, the family and the ownership group all need governance—and outside oversight.
Professor Emeritus Robert Smiley shared his experiences and corporate governance expertise as a panelist at the National Association of Corporate Directors (NACD), Northern California Chapter event, “Driving to Future Success: The Role of the Outside Director in Family Business Governance,” hosted by UMPQUA Bank of Napa Valley on March 2. The NACD of Northern California serves the corporate governance needs of boards of directors and managers who run small and large businesses in the region.
Smiley joined Denise Mazzucca, director of tax at Macias Gini & O’Connell LLP; Caroline Bailey, chair of the Gallo Family Council and president of Premier Growth, USA; and Marlene Soiland, president and owner of Soiland Management Company. The panelists discussed the role that outside directors should take in providing independent oversight in family-owned businesses and any planned transitions of ownership.
“Outside boards really help,” explains Smiley. “Having an outside board means that management has to report to them quarterly and prove that they are applying best business practices.” Smiley has served on several family-owned and small business boards, including Delicato Family Vineyards and Cake Bread Cellars, and on the board of advisors at the Winery Exchange. He is currently on the board of directors for Sacramento Commercial Bank and Placer Sierra Bank.