A third generation family enterprise hired a non-family executive as CEO of their operating company. The shareholders and the Board of Directors wanted assistance in defining the roles and responsibilities of each of the entities with reference to the others.
Relative Solutions’ Direction:
Relative Solutions met with the shareholders, the executive committee of the Board, and the CEO to assist them in defining the challenges they were facing. We found that the presence of several family Board members as high level executives seemed to complicate the family’s thinking, since the CEO would both evaluate them and have them evaluate his work. Further, since the Board and the executive management team originally had many of the same members, the change in leadership also meant a change in membership and roles for the individuals in the enterprise.
Over several months, Relative Solutions teamed with a representative shareholder group and the Board to rework roles and responsibilities. We clarified linkages between the entities, as well as the responsibility of each to the other. The comfort level of the CEO, the Board, and the shareholders increased, and the Board was able to conduct performance reviews. Additionally, Relative Solutions coached the CEO and the Board on the intricacies of the relationship system between a family and a non-family CEO.