Private Company Directors

2019 Private Boards of the Year Announced

Six boards will be honored in June for excellence in governance.

By April Hall

The top private company boards this year have been instrumental in shepherding their companies through acquisitions, leadership succession and even a tornado.

The winners of the fourth annual Private Board of the Year awards — presented by Private Company Director, Directors and Boards and Family Business magazines — are Gold Eagle Co., Southworth International Group, Inc., Herschend Enterprises, DAI Global, LLC, Vermeer Corporation and Graybar Electric Company, Inc.

The awards honor private firms whose boards demonstrate best practices in structure and performance. Directors at these companies ensure that the interests of a variety of stakeholders — owners, employees and communities — are being optimally served.

The awards recognize fiduciary boards (those tasked with protecting shareholders, with the authority to vote on decisions that are binding for company management) as well as advisory boards (more informal boards that have no binding regulatory role, but often a significant strategic role). Awards were also broken into ownership structures, including family-owned, closely held and private-equity owned.

The awards will be presented at a dinner June 6 in Washington, D.C., as part of the seventh annual Private Company Governance Summit, a national conference focused on the unique governance challenges for owners, shareholders, directors and advisory board members of closely held, family-owned and private equity-owned companies.

Dozens of private boards of directors were nominated for the 2019 Private Board of the Year awards, but six stood out for their diligence, standards and outcomes.

Gold Eagle Co.

Advisory Board

Gold Eagle Co. provides automotive, marine and outdoor-power equipment maintenance products under a variety of brands. Armin Hirsch founded the company in 1932. His eldest son, Bob, joined in 1957 and his younger son, Rich, joined in 1968.

The company had a fiduciary board but converted to an advisory board in 2000. Current CEO Marc Blackman, Bob Hirsch’s son-in-law, says the company first had a fiduciary board, but the directors realized they didn’t understand the technicalities of running the required board meetings.

“We wanted feedback outside of ourselves — experts from other businesses — to provide different perspectives,” he says. The owners wanted input, not decision makers. “When they understood this, they went to an advisory board.”

Though they do not have a fiduciary duty, the Gold Eagle board does have influence.

For instance, Blackman says the Board was instrumental in assisting with and advising through the transition from second to third generation leadership a decade ago.  Gold Eagle has been fortunate to experience little familial conflict.  Still, both generations embrace the chance to run differences of opinion or strategies by the board members.  Blackman appreciates the support the board provides in every aspect of the company’s operation and future opportunities. 

Governance highlights include:

  •  Board advised to bring in a third-party consultant to help with succession.
  • Seven independent members from all disciplines, including marketing, consumer products, science and manufacturing consultants.
  • Board is used to provide input & helpful perspective when family members have differences of opinion.
  • NextGen advisory board with seven to eight high achieving young professionals in their 20s and 30s. Members, who are not paid, meet four times a year. The “reverse mentoring” board keeps company leaders up to date on fast-moving business changes, while giving the members experience in sitting on a board.

Southworth International Group, Inc.

Fiduciary Board/Family-Owned, $100 million to $350 million in revenues

Southworth International Group Inc. (SIGI) is a family-owned manufacturer of ergonomic material handling equipment such as custom lift tables, pallet positioners and dock lifts. The company, founded in 1890, was acquired by Lewis Cabot in 1977. His three sons now own the business.

SIGI’s board of directors has evolved over the 40 years that the Cabots have owned the company. Most recently, the board has added two independent members, taking it up to five independent and two internal members (the chairman from the second generation of the family and a non-family CEO).

“After speaking with my brothers, we decided that we wanted to enlarge the number of independent directors, and use this opening as an opportunity to rebalance the board to bring in some new experiences and skill sets that were aligned with our strategic plan and with the changes that are going on in the company,” says Tim Cabot, a shareholder and the board’s chairman. “We were very fortunate to be able to find two very qualified new board members through a formal search process.”

The board, he adds, “has the skills and experience that will help us over the upcoming period that we’re entering into.”

The board’s leadership has helped the company double its top line over the past five years. Several Chinese operations have been consolidated into a new operation in Wuxi, China.

“We have a very solid board, which is motivated to help the company, and I think the benefits of that are already being seen,” Cabot says. “It’s improved the discussion and engagement with management. It’s allowed us to do some things that we would otherwise not have done. It certainly helped our family — my brothers and myself — in terms of how we navigate our ownership issues, by depersonalizing it, making it a little bit more objective or clear.”

Governance highlights include:

  • Four standing committees (audit and risk, human resources oversight, innovation and technology, and governance), which are all chaired by independent directors with formal charters.
  • In-depth onboarding for directors, including orientation, a full day of training with management to orient the board to Southworth’s products, processes and financial status.
  • Annual review of the strategic plan facilitated by an outside consultant and led by the executive management team.
  • Using objectives it requested from shareholders to guide decision making.

Herschend Enterprises
Fiduciary Board/Family-Owned, $350 million to $1 billion in revenues

Herschend Enterprises, which runs theme parks and other tourist attractions across the United States, has had four non-family CEOs in 27 years. The company, founded in 1950 with a single cave tour in southwest Missouri, is now the largest family-owned U.S. themed attractions company.

Herschend has a fiduciary board that has been majority-independent since its founding in 1971. The company is currently led by non-family CEO Andrew Wexler, the fourth non-family CEO since 1991.

The board believes in total transparency, opening board meetings and dinners to stockholders.

Lead shareholder director Chris Herschend says the board helped the company right out of the gate. As a destination business (a cave tour in the Ozarks), the company was deeply affected by the oil embargo of the 1970s.

The board was supportive enough to let the company explore ideas, but wasn’t afraid to be a hard “no” when necessary. That independence continues today.

“I would do anything for the Herschends, and I’m not a Herschend,” says Chuck Bengochea, former CEO of Honey Baked Ham and an independent board member for about 10 years. But that admiration and affection does not hold him back from being a strong board member.

“If you love somebody, you always want the best for them, not what is easy,” he stresses. “Nobody walks on water and we all make mistakes. I love them enough that if I think what they’re doing is wrong, I tell them.”

As for compensation, the board has proved that money is not its primary motivation.

The board’s compensation is based on the value created by the company over the time directors are on the board, Bengochea says. However, the board felt the company was so profitable that they may have been getting too much of the credit, so to speak — their paychecks were growing too much.

“We hired an external firm to give us a lot of industry data and we targeted to be paid at the mid-point” of comparative boards, he says. The directors voted to decrease their compensation.

Governance highlights include:

  • A perpetual search for quality board members rather than waiting for directors to announce they are stepping down.
  • Three committees (governance, compensation and audit) that are able to pivot when issues change, e.g., shifting from ride safety at parks to active shooter drills and possible terror threats.
  • Multifaceted self-evaluations that allow directors to rate themselves and other directors. Also, 360 evaluations every few years that allow shareholders and management to weigh in.
  • Deliberate director onboarding, giving new directors a chance to get “the lay of the land” before being put on the spot at a meeting.

DAI Global, LLC
Fiduciary Board/Closely Held or Employee-Owned, $350 million to $1 billion in revenues

DAI Global, LLC, is an international development company, working with hundreds of developing nations in areas including natural resources, trade and climate change.

Although the board converted from advisory to fiduciary in the 1990s, the current chair, Betsey Nelson, joined the board in November 2011 and really amped up the company’s governance, making it more like a public company board. Nelson is a strong believer in private companies having strong governance practices and doesn’t take positions at firms that see the board as “window dressing.”

DAI, Nelson says, embraced good governance “wholeheartedly,” as she instituted evaluations and focused on board refreshment.

The company wanted to grow organically, and the board encouraged management to be inventive and innovative, says DAI CEO Jim Boomgard. The previous board, he says, would have “pooh-poohed” that plan.

Nelson, who has an M&A and Silicon Valley background, met with officials from a prospective acquisition before DAI committed to the deal. The acquisition went well and has become the foundation of DAI’s European business.

Governance highlights include:

  • The “Board of the Future” initiative, launched shortly after Boomgard became CEO in 2009, which culminated in an action plan that included refreshing the board more frequently and bringing in fresh leadership.
  • Six of the seven board members are independent.
  • Formally chartered committees are chaired by independent members.
  • The board holds “brown bags” with employees to answer any questions they may have.

Vermeer Corporation
Fiduciary Board/Family-Owned, more than $1 billion in revenues

Vermeer, a third-generation-led family business, has weathered many storms, literally and figuratively.

The Pella, Iowa-based company that makes construction, earth-moving and agricultural equipment, experienced a family rift in the 1970s that the board couldn’t prevent, though it did protect the company. In the '80s, the board worked to bring the family back together and the board added their first two independent board members. About 10 years ago the family decided to make the board “plus 1,” meaning there would always be at least one more independent member than shareholder members.

The board has been very active in the company’s success. There are two very strong examples.

In July 2018, a tornado ripped through the Pella, Iowa, Vermeer headquarters. “The Vermeer Mile” is home to manufacturing facilities, offices and even a daycare for employees’ children.

The company had an extensive tornado plan that had been reviewed thoroughly by management and the board and included tabletop exercises. As a result, there were only a few minor injuries and no deaths. In addition, manufacturing was up to full power in just a few weeks.

The economic downturn of 2009 was also a watershed moment for the company.

While most companies pulled back on manufacturing and found themselves with a glut of inventory, Vermeer had adopted lean manufacturing practices and had not overproduced prior to the recession, says second-generation family member Mary Andringa, the current chair of the board who was CEO at the time.

Other companies were making significant layoffs, but Andringa says she didn’t want to do that. “The company and board were focused on how we could keep our talent,” she says. “We got the OK from the board and shareholders that if we could just break even, we could keep all of our people.”

The board agreed and the company suspended manufacturing, focusing instead on R&D for the year.

“We were able to start manufacturing up the next year without losing a single employee, which would have resulted in having to train new people,” she says. At the board’s suggestion to strengthen the company for the future, Vermeer acquired an brokerage sales site at that time.

Since the 2009 downturn, Vermeer sales have tripled in volume.

Governance highlights include:

  • Attention to enterprise risk management that predicts and plans for challenges the company may face.
  • Mandatory retirement from the board at age 70.
  • A board chair position that is responsible to set the board agenda and encouraged to challenge the issues facing the board and management.
  • A detailed, written shareholder director qualification and development process for potential interested shareholders.


Graybar Electric Company, Inc.
Fiduciary Board/ Closely Held or Employee-Owned, more than $1 billion in revenues

Graybar is a distributor of electrical, communications and data networking products and a provider of supply chain management and logistics services. It primarily serves the commercial market and the commercial, institutional and government market, as well as the industrial and utility markets.

Employees purchased the company in 1929, and it remains 100% owned by active and retired employees with a consistent share price of $20. Shareholders have earned consistent quarterly cash dividends as well as occasional stock dividends. The company has provided a minimum cash dividend of 10% every year since 1929. Because of the large number of shareholders (more than 8,000), the company must file Form 10-K with the SEC (to provide a comprehensive overview of the company's business and financial condition, including audited financial statements), even though it’s a private company.

With more than $6.6 billion in revenues, Graybar is an outstanding business. Still, it faces digital disruption, as does any industry. The board is instrumental in helping the company adjust to that disruption, says Kathleen Mazzarella, chairman, president and CEO.

“Our big investment right now is really about balancing the digital transformation of the supply chain, so we’ve been trying to take a leadership role in the industry to talk about the fact that distribution is primarily a people-to-people business, not a B-to-B.

“It’s a people-to-people business enabled by technology. From our perspective, not only has our market performance been strong, we really pride ourselves on making sure that we try to help the industry as a whole.”

The board has also refocused succession efforts, says Matt Geekie, senior VP, secretary, general counsel and board member, to “ensure that we didn’t simply, as sometimes occurred in the past, take on someone who is most senior in the organization and make them a board member, but have a true set of criteria by which we judge up-and-coming leaders in the organization to ensure that they might be worthy of becoming not only an officer, but then maybe later on a board member of the corporation.”

Geekie says given the number of committees and the “robust” discussion and contributions of all directors, the board does not suffer without independent members.

“Our processes have worked,” he says, “and we have weathered everything that has come our way since the company became employee-owned on Jan. 1, 1929. It really came down to the question of what value/purpose an independent director would have in our environment.”

Governance highlights include:

  • An annual board evaluation, with the assistance of a third-party consultant, that evaluates the board as a whole as well as individual members.
  • Board members must complete continuing education outside the organization (e.g., Harvard, Kellogg, KMPG, American Management Association, NYSE) at least every other year.
  • The board adopted part of the New York statute called the constituency statute. The board must take into consideration what’s in the best interest of five constituencies: employees, shareholders, customers, suppliers and the communities in which the company operates.
  • Each director is expected to visit at least 10 of the company’s branches each year to stay in touch with operations and understand the scope of the business.

Directors Record